Haynesville natural gas production is hitting record levels as private operators push output higher, intensifying a supply overhang that continues to pressure Henry Hub pricing, UBS strategists said in a note on Wednesday.
UBS analysts, citing the Energy Information Administration's August Short-Term Energy Outlook, said Haynesville production averaged 16.1 billion cubic feet per day in Q2, a 3% increase over the quarter.
Projections indicate that growth will persist, with volumes reaching 16.6 Bcf/d in Q3 and 17.1 Bcf/d by Q4. The EIA forecasts further expansion into 2027, estimating a 9% increase over the year to 17.8 Bcf/d.
UBS analysts said that this sustained volume growth remains the primary driver behind the persistent gas supply surplus that has weighed on both front-month and 2027 Henry Hub price forecasts.
However, despite the broader surge in supply, the landscape of drilling activity is shifting. UBS said that though publicly traded E&P companies such as Expand Energy (EXE) are projecting flat volumes for H2 2026, private operators are the primary engines of the current growth cycle.
Haynesville's rig count rose to 56 last week, the highest level since May 2023.
The surge in drilling comes even as Apex Natural Gas, the basin's most active operator, began paring back operations.
UBS said that after peaking at 14 active rigs in June, Apex's activity dropped to 13 in July and further to 10 in early August. Meanwhile, Adamas has increased its presence, averaging six active rigs in Q3, up from four in H1 2026.
Public operator Comstock Resources (CRK) is maintaining a nine-rig program and expects volume growth in the second half of 2026, largely fueled by development in the emerging Western Haynesville.
However, the energy firm's management signaled that future activity remains sensitive to market conditions, noting that drilling programs could be dialed back if natural gas prices continue to weaken.
UBS said that despite the upward trend in production, regional basis differentials have tightened significantly over the past two months.
The prompt Columbia-Gulf Mainline basis differential narrowed from roughly -$0.40 per million British thermal units in July to -$0.32/MMBtu in August, while the Winter 2026/27 basis strengthened to about -$0.21/MMBtu.
UBS analysts attribute this resilience in pricing to robust demand from the liquefied natural gas sector. LNG exports have averaged 17.6 Bcf/d over the past week.
Though Freeport LNG is currently processing about 1.4 Bcf/d, below its typical 2 Bcf/d capacity, market participants expect maintenance at the facility to conclude by the end of the month.
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