Material changes in the Henry Hub price, along with an increase in producer price sensitivity for regions like the Haynesville and NorthEast have created a need for us to break from our regular three month Long Term Forecast (LTF) update cadence. We will still be releasing a final version of the LTF next month but believe a preliminary update is warranted.
• The previous long-term natural gas production forecast was released in November 2023 when calendar year 2024 NYMEX Henry Hub NG was trading over $3.00 / MMBtu.
• Prompt month NYMEX Henry Hub NG prices are now trading around $1.75 / MMBtu.
• Natural gas producers are responding significantly to much lower prices and to sub $2.00 / MMBtu prices.
• The long-term natural gas production forecast for the Lower 48 is revised downward by ~ 4 Bcf/d on average from March 2024 through December 2024.
• Northeast natural gas production is revised lower by 0.5 Bcf/d from March 2024 to December 2024. Chesapeake Energy, Coterra Energy, and Antero Resources are leading the way towards a downwards revision.
• Haynesville natural gas production is revised downward by 2 Bcf/d from March 2024 to December 2024. The great majority of the downward revision is coming from Chesapeake Energy with some contribution coming from Comstock Resources.
• Texas natural gas production is revised downward by 1.5 Bcf/d from March 2024 to December 2024. Chevron, Diamondback Energy, ConocoPhillips, and Vital Energy are all coming in with guidance forecasts that are mid-single digit year-on-year percentage growth for 2024. Chevron stated that they are looking to back end load their 2024 production and desire to build DUCs for the first half of 2024. The Permian natural gas grid will not be further debottle-necked until Q3 2024 with the advent of the 2.5 Bcf/d Matterhorn Express intra-state pipeline.
