Haynesville Horsepower: Rigs Needed to Crest the Coming ‘Wall of Demand’

As natural gas demand grows and prices rise, operators are looking at the Haynesville Shale to fill the supply gaps.

“The time has come for the Haynesville,” BP CEO Murray Auchincloss said during the CERAWeek by S&P Global conference in March.

But just how much gas does the Haynesville have left in the tank, and how many drilling rigs will it take to meet the rising demand?

The current level of Haynesville drilling activity would leave markets undersupplied heading into 2027 as new LNG export projects come online, according to an analysis by Keybanc Capital Markets.

There’s a “wall of demand” rapidly approaching from increased LNG exports on the Gulf Coast, said Gordon Huddleston, president and partner at Aethon Energy, during Hart Energy’s DUG Gas Conference & Expo.

Aethon Energy is the Haynesville’s second largest natural gas producer.

U.S. natural gas demand could rise by nearly 6 Bcf/d over the next 12 months to fuel just three LNG export expansions, by Expand Energy’s forecasts.

But meeting that demand won’t happen overnight, and it will require billions of dollars of additional investment by operators, Huddleston said.

Privately held Aethon has the capacity to grow production from current levels, around 3 Bcf/d gross.

Dallas-based Aethon plans to spend around $1 billion this year to keep production flat. It could boost capital spending to $2 billion and add another 500 MMcf/d to 600 MMcf/d of production after deducting base declines.

Henry Hub futures prices average $4.56 over the next 12 months, according to CME Group data; 24-month strip averages $4.38.

But Aethon won’t increase drilling without higher prices—preferably above $5/Mcf—over a sustained period.

“Aethon keeps a lot of drill-ready inventory,” Huddleston said. “But certainly, if we were to double or triple capital spending, you’d be churning through a lot of that.”

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Rig activity

There were 34 active drilling rigs across the Haynesville Shale in the week ended March 11—19 in East Texas and 15 in Louisiana—according to Enverus data. That’s down from a recent peak of 70 in late 2022.

Haynesville production, including legacy Haynesville and Bossier output and production from the emerging western Haynesville extension, averaged 13.1 Bcf/d in January.

Haynesville drilling activity is “pretty concentrated among the larger operators,” said Tim Rezvan, Keybanc managing director and equity research analyst during Hart Energy’s DUG Gas Conference & Expo:

• Expand Energy and Comstock Resources were each running six rigs;
• Aethon was running five rigs;
• TG Natural Resources, majority owned by Japanese utility Tokyo Gas and the winning bidder of additional Haynesville assets from Chevron, was running three rigs;
• Sabine Oil & Gas, majority owned by Japanese firm Osaka Gas, was running three rigs;
• BPX Energy, the U.S. shale segment for BP, was running two rigs; and
• Paloma Natural Gas, which was acquired by hedge fund giant Citadel for $1.2 billion in February, was also running two rigs.

Rising prices have certain operators hinting at output growth. Comstock and Expand have indicated a desire to grow Haynesville production from their current levels.

Sabine plans to add a fourth drilling rig in East Texas in April, President and CEO Carl Isaac said at DUG Gas.

But Haynesville operators will need to significantly ramp up drilling activity to meet the growing demand call, according to KeyBanc.

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Current scenario—34 rigs

Under the current level of Haynesville drilling activity, gas production will rise from 13.1 Bcf/d to 14.7 Bcf/d by 2026—and to 15 Bcf/d by 2027.

Haynesville output peaks in late 2027 at 15.3 Bcf/d before gradually declining.

“Without rig adds, you’re not going to see meaningful contribution from the Haynesville,” Rezvan said. “That would lean you more in the undersupplied markets with the next couple of projects coming online in late 2026.”

The bank made several assumptions on base declines of existing production, IP-rate degradation for new wells, improvements and efficiencies in cycle times, among other factors, Rezvan said.

Accelerated scenario—50 rigs

If Haynesville drilling were to expand to 50 rigs, production would grow to 17 Bcf/d by 2026 and 18.5 Bcf/d by 2027.

“I think what’s important is we can get up to 20 Bcf/d, but really not until 2029,” Rezvan said.

Haynesville production would peak above 20 Bcf/d in mid-2029 and stay flat under a 50-rig scenario.

This level of activity could meet some of the near-term LNG export demand growth. But it’s unlikely to see that level of Haynesville drilling activity before the second half of 2025, Rezvan said.

“I recognize out in the field you’re dealing with labor, gathering systems and other constraints, too,” he added.

Life in the fast lane—60 rigs

With 60 rigs spread across the Haynesville—almost double the current activity level—things start getting exciting, Rezvan said.

It sounds like an enormous increase over the current 34 rigs. But, “we were running 60 [Haynesville] rigs as recently as May 2023,” Rezvan said.

“So, it’s not like the industry hasn’t been there,” he said.

Under a 60-rig program, Haynesville production grows to 18 Bcf/d by 2026 and to 20.7 Bcf/d by 2027.

But it’s unlikely that Haynesville producers are willing to step on the gas pedal and ramp up to a 60-rig program, Rezvan noted.

Haynesville operators, including Aethon, are hesitant to massively boost production without higher prices into 2027 and beyond.

“The question is going to be if there is an inclination to go,” Rezvan said.

Magic number—45 rigs

Experts expect to see Haynesville output growing in future months. U.S. Energy Information Administration forecasts have Haynesville production averaging 18 Bcf/d over the fourth quarter of 2026.

That’s an aggressive forecast, Aethon’s Huddleston said. Haynesville output by year-end 2026 might be closer to 16 Bcf/d, he said.

According to Keybanc’s analysis, unless you get a Haynesville rig count to 45 or higher, “you’re really not going to see the production contribution that the Haynesville needs to deliver,” Rezvan said.

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