For producers like Tulsa-based Sage Natural Resources, 2022 offered up grand returns from its Barnett drilling program in North Texas that included 30 new wells. The wholesale gas spot price at Henry Hub averaged $6.45 per MMBTU—the highest since 2008 and 53% higher than in 2021. Daily prices saw spikes as high as $9.85 per MMBTU. Enough to keep Sage and others like it drilling more, producing more volumes, and enjoying a phenomenal price environment. Until it wasn’t.

Reese Energy Consulting today is following the latest shifts by producers faced with a 52% drop in gas prices since the beginning of the year. Sage is the most recent gas producer to make an about face, announcing last week it had wrapped up its Barnett activity to focus on its oil-weighted Eagle Ford assets for the remainder of 2023. The economics to drill and produce gas, cited the CEO, isn’t there anymore. Okla. City-based Chesapeake this year will reduce its drilling and completion activity in the Haynesville and Marcellus, dropping one frac crew in the Haynesville and cutting rigs in both. Texas-based Comstock, also a Haynesville fixture, will cut two rigs. But a slowdown may well be the best medicine until more U.S. LNG export terminals come online to handle record gas volumes. As one analyst put it last December, “The theme is short-term pain but long-term gain.”