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Rising Gulf Coast Gas Costs to Support Higher US Prices, TPH Energy Says

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Henry Hub natural gas prices are expected to rise toward $4.5 per million British thermal units by 2030 as Gulf Coast supply costs increase, TPH Energy Research said in a Monday note.

The firm expects tightening storage levels in 2029 to narrow the spread between US and international gas prices to about $1.50/MMBtu, potentially reducing liquefied natural gas exports by 5 billion cubic feet per day by 2030.

TPH said the Western Haynesville basin will play a larger role in Gulf Coast supply balances over the next decade as output from the core Haynesville declines structurally.

The report forecasts more than 4 Bcf/d of supply growth from the Western Haynesville by 2040 to offset weakening production from Haynesville proper.

TPH estimates core Haynesville acreage can generate solid returns at $3 to $3.25/MMBtu, while East Texas Haynesville wells require about $3.5 to $3.75/MMBtu gas prices.

The firm expects Western Haynesville production growth to require materially higher prices because recent drilling results have weakened as operators expanded into less productive acreage.

TPH lowered its production type curve estimate for the play to about 2.7 billion cubic feet equivalent per 1,000 feet from roughly 3.5 Bcfe per 1,000 ft after tracking about 35 industry wells.

The report said 2024 wells are trending closer to 2.5 Bcfe/1000ft, while 2025 wells have weakened further as operators continue adjusting choke management and flowback assumptions.

Comstock Resources (CRK), the basin's largest operator, said stronger Robertson County results showed greater variability as drilling expanded into Leon and Freestone counties, TPH Energy added.

TPH estimates Western Haynesville wells require about $4/MMBtu gas prices to generate a 35% after-tax rate of return under its base production assumptions.

However, weaker well performance similar to 2024 and 2025 trends could raise Western Haynesville breakeven prices to roughly $4.25 to $4.75/MMBtu.

The firm estimates Comstock Resources needs about $3.75/MMBtu gas prices to maintain production within cash flow, while prices closer to $4.25/MMBtu would support high single-digit growth across its core and western acreage.

A 0.5 Bcfe per 1,000 ft decline from base production assumptions would raise corporate cash flow breakeven prices by about $0.25/MMBtu.

TPH expects the Western Haynesville to become increasingly important for Gulf Coast gas supply over time, while lower well costs could gradually reduce project breakeven prices as development expands.

The play still requires significant resource testing to refine production assumptions across thousands of future drilling locations, while limited downspacing data continues to cloud long-term well performance estimates.

Price: $14.98, Change: $+0.88, Percent Change: +6.24%

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