Private equity firms are looking to sell enterprises and property in the second-largest natural gas-producing formation in the United States, where values have risen in tandem with global gas prices and brisk U.S. exports of LNG (liquefied natural gas).
According to Andrew Dittmar, director of Enverus, the Haynesville formation in East Texas and Northwest Louisiana has seen four purchases of around $1.65 billion this year. Haynesville is anticipated to generate a record 13.6 bcfd (billion cubic feet per day) next month, accounting for approximately 15% of US shale gas output.Gas futures in the United States recently reached 12-year highs, and prices have risen even further in Europe and Asia, where buyers are anxious to lock in supplies to meet rising power demand.
Smaller businesses see the natural gas boom as a chance to sell assets that they have owned for three years or more. According to advisers, there are numerous large transactions in the works, each valued at more than $1.5 to $3 billion, as well as purchasers wanting to purchase smaller assets from individual holders.Private equity firms among the sellers held off on selling as prices plummeted early in the coronavirus epidemic last year.
There is extra capacity on pipelines connecting Haynesville to Gulf Coast export centers like as Sabine Pass, Louisiana, and Freeport, Texas. In comparison, lines from the Marcellus shale in Pennsylvania are nearly full. The United States presently exports around 10 billion cubic feet of gas per day as LNG, with numerous businesses planning to increase capacity in the next months and years.