Natural Gas and Big News for CrownForge Investors

Last week we said we'd turn to natural gas, the commodity surface-level analysts tend to skip. Here it is, along with some big news from our own lease.

WHY GAS

Natural gas generates about 40% of US electricity (EIA). It also comes out of the ground alongside oil. Many oil wells produce gas too. That gas only earns money if there's a pipe to carry it. We'll come back to that.

THE US MARKET

At home, things look comfortable. As of October 9, storage was 3,567 Bcf, 45 Bcf above the five-year average but 143 Bcf below last year (EIA). Henry Hub spot was $3.22 on October 14 (EIA).

Overseas demand is the bigger story. LNG feedgas, the gas flowing into export terminals, hit a record 20.7 Bcf/d this morning (NGI). EIA expects 2026 LNG exports to average 17.6 Bcf/d, up from 2025's record 15.1 (EIA).

Why are exports running so hard?

Qatar.

HORMUZ AND QATAR

Before the war, Qatar shipped nearly 20% of the world's LNG through Hormuz (EIA). It has no LNG pipeline that goes around the strait (AGBI).

Crude has found workarounds. LNG hasn't.

September was Qatar's best month since the war began, at 1.6 million tons. That's still under a quarter of its prewar average, and Kpler expects October to drop to about 0.6 million tons as attacks on shipping resumed (Modern Diplomacy, citing Kpler).

So Asia and Europe buy wherever they can. A lot of it comes from the Gulf Coast.

WHAT GETS SKIPPED

Every new export terminal ties Louisiana gas a little closer to prices in Tokyo and Rotterdam. In July, Asian spot LNG climbed into the high $20s per MMBtu while Henry Hub stayed broadly stable (Global LNG Hub). We think that gap is why US terminals are running flat out.

Storage looks fine on paper heading into winter. But one cold snap changes things. Henry Hub averaged $7.72 in January, after Winter Storm Fern (EIA).

Let's see what happens this time.

BIG NEWS FROM OUR LEASE

We've acquired a steel gas pipeline section serving our CrownForge leases.

Why is that a big deal?

When a well produces gas and there's no line to carry it, that gas can't be sold. Now gas from our new wells has a route to market as soon as they're online and tied in.

We also own the pipeline section so that we get priority and retain full control over it.

The deal itself is a win too. We paid about what it would have cost to build our own line out of lesser material. Instead we got steel, and we skipped the time and work of building it.

Our projections are built on $70 oil. Gas sales from the new wells are not part of that base case. Once the new wells are drilled and are online and connected to the line, investors will be in a better position than the original projections.

Have more questions about natural gas or our new pipeline? Reach out to our team.

Your Oil and Gas team,

Crown Forge Energy