Repsol plans to release its Marcellus Shale rig in June but will maintain another rig in the Eagle Ford Shale, CEO Josu Jon Imaz said during a quarterly webcast.

Repsol will drop the rig due to the current U.S. gas price environment, Imaz said during a first-quarter 2024 earnings webcast with analysts. As a result, Repsol will also reduce capex in the Marcellus play.

“And as a consequence of this reduction, the free cash flow breakeven for the Marcellus this year is going to be at $2 million Btu [MMBtu]. So, I mean, it’s not a big figure taking into account current prices, but let me say that it’s okay,” Imaz said.

“Saying that, what we are doing is also because we have a more positive view for gas prices for coming years. And what we are doing is guaranteeing that the production is going to be there. This year, we are producing more or less [about] 135,000 barrels a day in equivalent terms. I mean we are talking about gas,” Imaz said.

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Imaz said the Madrid-based energy company is trying to mitigate its exposure to Henry Hub through hedging.

“Approximately 20% of our North American gas production in 2024, 50% in 2025 and 60% in 2026,” has been hedged, Imaz said. “On average, around 40% of our North American production in 2024-2026 has been hedged through derivatives … with a minimum floor in all cases above $3/MMBtu. So, we are quite comfortable [in] this position.”