The decline in U.S. natural gas prices, combined with elevated costs to drill a well, are forecast to slow down drilling and completions (D&C) activity in the gassy basins of the Lower 48.

Rystad Energy Vice President Serik Omarov in a note said the gas price decline has created uncertainty for exploration and production (E&P) companies, particularly those developing gas reserves. Oilfield service costs for D&Cs have risen by around 30% since 2021.

“With the price plunge, the economics will not be attractive for operators to allocate capital even for top quartile basins,” Omarov said. 

[Want to visualize Henry Hub, Houston Ship Channel and Chicago Citygate prices? Check out NGI’s daily natural gas price snapshot now.]

Several natural gas basin operators already have...