Implied costs for natural gas-weighted producers rose by 46% year/year in 2022 to $4.51/Mcfe, according to a new study by BMO Capital Markets.

The three-year average cost trend rose 6% to $4.06/Mcfe, the BMO team said. This is based on a comparison to a global Brent oil and Henry Hub basket price.

Viewed by the Henry Hub gas price alone, the implied cost of gas supply rose 32% to $2.86/Mcfe in 2022, while the three-year average increased 3% to $2.95/Mcfe, the analysts found.

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

“Inferred costs for natural gas rose substantially in 2022. However, nearly 75% of reserves are still economic at or below $4/Mcfe based on the three-year average...