Appalachian Producers: Henry Hub Pricing Matters Less Than You Think
For those modeling out expected earnings, local pricing is an important factor, and in fact has grown in importance in recent years. Far too often, I've seen newer investors in this space just take the Henry Hub futures strip alongside production guidance, and say "this times that equals next year's revenue". Reality is far more complicated, and there are going to be big winners and losers off how local prices respond in 2021. Some expect differentials to soften (EQT Corporation has said it plans to sell off some of its Mountain Valley Pipeline capacity once put into service) while others expect it to remain wide (Antero Resources is one such party, which while it might be talking its book, has been proven right thus far).