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Commentary Outlook & Notes Market-Relevant Events Infrastructure Supply Chart Pack
Natural gas prices in the Lower Midcontinent region (Midcon) have moved higher over the past few months. NGPL Midcon Basis is used as a regional benchmark for Lower Midcon gas prices, with basis being the discount or premium to Henry Hub. Prompt month NGPL Midcon basis is at the highest level since late winter, while forward prices through the next few seasons have also moved higher. The Winter '25/'26 and '26/'27 seasonal strips are both near multi-month highs. Price action in nearby basis locations, such as Oneok Oklahoma Basis and Panhandle TX-OK Basis has been more muted, as prompt prices have risen but forward prices have remained relatively stable.
Forward prices for NGPL Midcon are at a discount to Henry Hub throughout the next two years. Lower Midcon prices in general trade at discounts to downstream demand locations such as midwest or gulf coast hubs. The reason for this is that the Midcon is situated in between sources of supply and demand, while also having a substantial amount of production. At times of strong weather-driven demand during peak winter, prices may rise above Henry Hub, encouraging more gas to remain in the region.
NGPL Midcon Basis Outlook and Notes
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Winter '25-'26
Despite settling near parity to Henry Hub for the past five winters (Nov–Mar), NGPL Midcon forward pricing reflects a –$0.24/MMBtu discount to Henry for Winter ’25–’26 (as of 9/9/25). This is not the case for ANR Oklahoma and Panhandle TX-OK forward pricing as both of these points trade near parity to Henry Hub, similar to settles observed in the past few years.
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Summer '26
There are fewer differences between major Midcontinent pricing hubs in the Summer ’26 strip (Apr–Oct). Nearly all points (NGPL Midcon, ANR Oklahoma, ONEOK Oklahoma, Panhandle TX-OK) are priced at about a –$0.60/MMBtu discount to Henry Hub as of September 9. The Summer ’26 discount to hub is consistent with levels observed over the past few years. Flows to Midwest demand centers are typically lowest in the summer months when Chicago area demand is much weaker than in winter.
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Winter '26-'27+
Prices at Lower Midcontinent locations in Winter ’26/’27 are similar to those in the Winter ’25/’26 strip. Flow dynamics are also expected to be comparable between the two winters. The Permian Basin will gain new pipeline egress to the Gulf Coast in the second half of 2026, shifting some gas away from the Midcontinent. The impact is likely more concentrated in Summer ’27. The Waha curve shows significant improvement in 2027, and Lower Midcontinent pricing hubs also display modest gains in the forward curve for Summer ’27 compared with Summer ’26.
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For more discussion on basis price moves and the current forward curves:
For more discussion and charts, jump to our outlook and chart pack. Remember, the local market is influenced by the broader gas market. Consult our Gas Macro Outlook for more.
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Recent Market-Relevant Events
8.5.2025
Pipeline maintenance supporting midwest gas prices
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7.14.2025
Midcon producers see $3.79 gas needed for substantial growth
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5.2.2025
TC Energy approves ANR pipeline expansion
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Several pipelines pass through the Midcontinent, bringing supply from west Texas and the Rockies into the Midwest. Meanwhile, gas also flows south through the region toward the Gulf Coast. During winter when the Midwest and Northeast consume the most gas, flows typically head north towards the large demand centers. There are only a few planned infrastructure expansions on the horizon, such as the small Palo Duro pipeline connecting Permian production to a system in southwest Oklahoma, and an expansion of the ANR pipeline in the Midwest.
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For a discussion of production outlook:
Below are the most market-relevant infrastructure projects that appear to be funded and going forward. The projects that offer intra-region capacity (egress) are also shown in the chart above.
Note: Deeper discussion included below the map.
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Major Pipeline Exits From the Lower Midcontinent
Gas Pipeline Flows
Gas Pipeline Projects
Palo Duro Pipeline
In-service date: 1Q 2026
Capacity: 80 MMcf/d
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ANR Northwoods Expansion
In-service date: 2029
Capacity: 400 MMcf/d
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Local Supply
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Gas production in the lower midcon area has been relatively stable over the past few years, in a range between 7.5 and 8.5 Bcf/d. Output dropped to a multi-year low in 2024 amid price-driven curtailments in producing regions across the country. Since then, production has normalized, but remains below 2022 and 2023 levels. Rig activity in Oklahoma climbed earlier in 2025 as prices jumped, but has since faded.
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Operator Guidance
Devon (Q2 2025 EC)
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07/23/2025
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2025 Guidance:
Oil Production Guidance:
384 – 390 MBO/d, raised from previous 380 MBO/d midpoint
Q2 oil production: 387 MBO/d
Total Production Q2 2025: 841 MBOE/d
Q2 CapEx: $932M (~7% below guidance midpoint)
Production: Q2 gas production of 1.3 Bcf/d, expected to remain flat through YE
Drilling & Basin Activity:
Note: Devon's Q2 2025 earnings call focused on the Delaware Basin, Williston, and Eagle Ford, and did not reference Oklahoma or the Midcont region in any prepared remarks or analyst Q&A.
Analysts Q&A Takeaways:
Midstream & Takeaway:
No current takeaway constraints flagged
Management comfortable with flow assurance and basis exposure
30% of 2025 oil & gas volumes hedged
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Gulfport (Q2 2025 EC)
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04/30/2025
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2025 Guidance:
Production: 1.1–1.15 Bcfe/d full-year (unchanged); 90% natural gas
Q2 Production: ~1.12 Bcfe/d; 4 wells turned to sales in Q2
CapEx: $425M–$450M (unchanged); weighted toward drilling in H2
Free Cash Flow: ~$45M in Q2; guiding to $250M–$300M FCF at strip
Drilling & Basin Activity:
Scoop (Oklahoma):
Lower activity level; 1 rig held for optionality
Deferred new TILs until winter to capture better price realizations
Wells Turned In Line: 4 in Q2; plan to TIL ~15 in H2
Average lateral lengths: ~13,000 ft
Development cadence optimized to avoid weak seasonal basis
Analysts Q&A Takeaways:
Hedging & Price Risk Management:
70% of 2H 2025 gas volumes hedged at ~$2.90/MMBtu
~20% of 2026 gas hedged at ~$3.10/MMBtu
Management avoiding overhedging — seeking upside from 2026–2027 gas price recovery
Gas Macro View:
“Storage is high, but production is down and LNG is growing”
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Ovintiv (Q2 2025 EC)
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04/24/2025
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2025 Guidance:
Full-Year CapEx: $2.25B–$2.35B (unchanged)
Total Production: ~600 MBOE/d in Q2; tracking full-year guidance
Oil Production: Q2 volumes of ~200 Mbbls/d; expected to rise modestly in 2H25
NG/NGL Production: ~2.4 Bcf/d gas; benefiting from base decline moderation and higher well productivity
Drilling & Basin Activity:
Anadarko Basin:
Low-decline, cash flow-generating; ~1 rig program maintained
Reduced reinvestment; asset generating free cash flow tail
Analysts Q&A Takeaways:
Supply Discipline:
Reiterated U.S. oil S&D remains in balance; no broad-based service inflation pressure
Cited “modest deflation” in some basins and stable cost structure
Drilling Program Discipline:
Multiple questions addressed risk of ramping rigs into volatile commodity prices
Management reiterated commitment to flat volumes, strong returns over growth
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Local Demand
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Gas consumption in the Lower Midcontinent usually peaks around 7-8 Bcf/d during the coldest periods of winter, but averages closer to 4 Bcf/d year-round. Demand from the power sector results in higher summertime consumption. While the Lower Midcontinent is not a particularly large source of demand, the region relies on the Midwest and Gulf Coast as major sources of demand.
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Renewables: The Southwest Power Pool or SPP, which includes most of the Midcontinent, is one of the largest regions for wind generation.
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Data Centers and Electrification: The rise of data centers and electrification of oilfield operations (e.g., electric drilling rigs) also adds to power demand. As with many parts of the US with access to reliable gas and power supply, developers have started to build data centers in Oklahoma. Google operates one data center east of Tulsa, while a new 500-acre facility linked to Meta is also planned for the city.
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Recent Market-Relevant events
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Pipeline maintenance supporting midwest gas prices
(August 5, 2025)
Work on the Viking Gas Transmission system reduced flows heading into the midwest
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A series of hydrotests reduced downstream flows from Minnesota into the midwest
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Midwest spot gas prices strengthened amid the supply reduction, while prices near the Canadian border weakened
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Gas inventories in the region had already been trailing other parts of the country, with lower supply exacerbating this
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Midcon producers see $3.79 gas needed for growth
(July 14, 2025)
A survey by the Kansas City Federal Reserve found producers in the area think gas prices need to average $3.79/MMbtu for drilling to be profitable.
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Executives noted that for drilling in the region to be profitable, natural gas prices will need to average $3.79/MMbtu, while a substantial increase in production may require an average of $5.01/MMbtu
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One respondent stated that gas prices have been stronger this year, encouraging more activity in the mid-term, but this could weaken prices on a longer time frame
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TC Energy approves ANR pipeline expansion
(May 30, 2025)
TC Energy approved a $900 million expansion of its ANR pipeline system through the Northwoods project, aiming to meet increasing natural gas demand in the U.S. Midwest with completion expected by late 2029.
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The Northwoods project will expand ANR pipeline capacity by 0.4 Bcf/d with new infrastructure
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Northwoods aims to serve Midwest electricity demand, including data centers and economic growth
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For more regularly updated reports like this one:
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