Sabine Oil & Gas to Add 4th Haynesville Rig as Gas Prices Rise

SHREVEPORT, La.—Sabine Oil & Gas plans to add a fourth rig on its East Texas leasehold next month.

Sabine aims to keep the fourth rig deployed “hopefully for the rest of the year,” if the company is comfortable with natural gas prices staying elevated, said President and CEO Carl Isaac.

East Texas pureplay Sabine Oil & Gas has held steady at three rigs since the beginning of the COVID-19 pandemic, Isaac said. Two rigs are in the Haynesville, one in the Cotton Valley.

“That three-rig program delivered 500 MMcf/d in April of 2022,” Isaac said March 19 during Hart Energy’s DUG Gas Conference & Expo in Shreveport, Louisiana.

Some production was curtailed amid low natural gas prices in 2023 and 2024, he said. Sabine produced an average of 462 MMcf/d in 2024, according to data from Enverus Intelligence Research.

Sabine is the eighth-largest gas producer in the Haynesville play, by Enverus’ count.

Sabine has large, operated positions in Panola, Harrison and Rusk counties, Texas. Sabine also has assets in Upshur, Cherokee, Gregg and Smith counties.

The company has around 280 undeveloped Haynesville and Cotton Valley locations at a $3.30/Mcf Henry Hub price, Isaac said.

At a $4.50/Mcf price, Sabine’s inventory is around 550 locations to drill in East Texas.

The 12-month Henry Hub strip price averages $4.70 as of March 19, according to CME Group data; 24-month strip is $4.34.

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A&D activity

Sabine has been a buyer and a seller in the Haynesville play, a basin red-hot with M&A attention.

The company has acquired about 170,000 Haynesville and Cotton Valley acres since 2017. Last year, Sabine acquired around 60,000 acres, Isaac said.

Sabine is 100% owned by Osaka Gas USA, the U.S. division of Japanese energy firm Osaka Gas.

Osaka Gas acquired a 35% working interest in Houston-based Sabine’s East Texas Haynesville assets in 2018, before buying the rest of the company the following year.

Sabine will also look to divest some “newer generation” horizontal assets from its portfolio this year, Isaac said.

“We will continue to sell the lowest-margin wells in our portfolio as we get an opportunity,” he said.

Experts say buyers want Haynesville Shale exposure as U.S. natural gas prices rise and gas demand grows to fuel LNG exports, AI data centers and power generation.

In February, hedge fund giant Citadel acquired Haynesville Shale E&P Paloma Natural Gas for $1.2 billion, Hart Energy reported. Paloma Natural Gas was backed by private equity firm EnCap Investments LP.

Last summer, private Haynesville operator Aethon Energy acquired Tellurian’s upstream assets for $260 million.

Sabine, however, isn’t looking to sell. Its parent company, Osaka Gas, has forecasts for natural gas demand to extend into the 2050s.

“That gives us a little room to plan,” Isaac said. “We’re not going anywhere.”

Haynesville production is expected to rise to 18 Bcf/d by the end of 2026, up from 14.1 Bcf/d in the fourth quarter of last year, according to the U.S. Energy Information Administration’s (EIA) latest forecast.

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