US Gas EPs Take Varied Approaches to Bear Market

摘要

Natural gas prices hovering near two-year lows have not prompted a major change in drilling strategy for Appalachian producers, butHaynesville Shale EP companies are showing signs of pulling back. Both EQT Corp. and Antero Resources on Thursday signaled the possibility of limited production growth in 2023 even as they hikecapital spending budgets in their Appalachian strongholds and await price responses from other supply basins. “In today's shale 3.0 world, we believe there is no investor appetite or excess capital available for companies to operate with a cash-fl ow defi cit,” Antero CFO Michael Kennedy told investors in a conference call. “As a result of higher maintenance capital costs, limitedliquids revenue uplift and widening basis differentials on natural gas, we estimate that most Haynesville companies are not able togenerate free cash fl ow in today's pricing environment ... With Appalachia pipelines near maximum capacity and Permian-associatedgas being directed by oil prices, the Haynesville is now the marginal natural gas producing region.”