Tellurian to halt Haynesville drilling until natural gas prices recover

Tellurian (NYSE:TELL) rallied +11.3% in Wednesday's trading after reporting a smaller than expected Q1 GAAP loss and saying it is making progress on Driftwood LNG Phase 1 construction, as it continues talks with banks and potential equity partners in the project.

Tellurian (TELL) will stop natural gas drilling operations in the Haynesville shale until low prices recover, Executive Chairman Charif Souki said, according to S&P Global Platts.

The company, which was bringing some wells online and could bring other inventory online quickly when justified by prices, will keep production roughly flat at ~200M cf/day in 2023, Souki reportedly said.

Cost inflation over the past 12-18 months has lifted the breakeven price for the average Haynesville operator to nearly $3/MMBtu, according to a recent S&P Global analysis.

Tellurian (TELL) has increased its Haynesville footprint to nearly 31K net acres and 152 producing wells by the end Q1, adding 3K acres in the quarter.

The company still wants to add 10K acres to its production footprint in 2023 and again in 2024, "so that we are in a position by the time we need it for Driftwood in 2027 to have 100% of our production needed for our share of Driftwood produced organically by our own company," Souki said, according to S&P Global Platts.

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