Haynesville Gas Minerals Ground War Turns Cutthroat Amid Scarcity

Buyers seeking Haynesville Shale minerals exposure will need to either pay up or get creative with the core of the basin locked up.

“There’s a finite pool of willing sellers in the Haynesville, and it’s being continuously depleted,” Live Oak Resource Partners President and CEO Andrew Keene said April 15 at the World Oilman’s Mineral & Royalty Conference in Houston.

Live Oak owns a Haynesville-focused portfolio of minerals and non-operated working interests, including over 20,000 net royalty acres (NRAs) in the basin.

With natural gas prices rising and Gulf Coast LNG demand growing, gas sellers want to cash in. 

Forward Henry Hub strip prices average $3.89/MMBtu over the next 12 months, per CME Group data; 24-month strip is $3.92 as of April 15.

Detring Energy Advisors has Haynesville and Appalachia gas packages on the market now, President Derek Detring said.

Other large Haynesville minerals owners include NGP-backed Mesa Minerals III, with around 16,000 NRAs. Mesa plans to market the package at some point in the future, President and CEO Darin Zanovich told Hart Energy last month.

Haynesville buyers, however, are left fighting over an increasingly scarce asset base.

“In situations that are competitively tensioned, it’s becoming a cost of capital game,” Keene said.

It’s a similar story in gas-rich Appalachia, said Ryan Strawn, president of Appalachian Mineral Partners.

“It is a knife fight for on the ground deals,” Strawn said. “A lot of new entrants, especially anything with a permit or DUC.”

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Follow the Rigs: Minerals M&A Could Top $11B in ’25—Trauber

Riskier rock

The desire for undeveloped inventory has pushed Live Oak to hunt further into the basin’s exterior flanks, or into areas operators have historically avoided.

Fewer buyers are circling for packages in the undrilled “white space” on the edge of the Haynesville, far from rig activity in the basin’s core.

“Finding a way to differentiate yourself in the Haynesville has been difficult over time,” Keene said.

Live Oak’s approach: being a first mover into more geologically complex rock, like the Natchitoches fault zone area.

“With improvements in technology, the results have changed,” he said.

Haynesville gas is notoriously deep, making it difficult and expensive to extract. But operators are seeing benefits from falling D&C costs.

Operators on Live Oak’s minerals have seen D&C costs per lateral foot fall to $1,300-$1,400 from $1,700 to $1,800, on the same rock, over the past year.

Haynesville rig count has dropped from an average of 67 in 2022 to 31 in the week ending April 11, according to Baker Hughes rig count data.

That a product of factors including natural gas price volatility and consolidation by upstream Haynesville operators:

• The merger of publics Chesapeake Energy and Southwestern Energy into Expand Energy consolidated two massive Haynesville portfolios;
• In February, hedge fund giant Citadel acquired Louisiana Haynesville producer Paloma Natural Gas for $1.2 billion. The deal included around 60 undeveloped Haynesville locations; and
• In March, Chevron Corp. sold a 75% stake in its East Texas gas assets to TG Natural Resources, a subsidiary of Japanese utility Tokyo Gas, for $525 million.

The Haynesville’s top five operators own more than a 70% market share in the basin, making it the second-most consolidated shale play in North America, according to a 2024 Kimmeridge analysis.

Total U.S. minerals and royalties dealmaking could surpass $11 billion in 2025, said Stephen Trauber, managing director, chairman and global head of energy and clean tech at boutique advisory Moelis & Co.

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Sources: Citadel Buys Haynesville E&P Paloma Natural Gas for $1.2B