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Tokyo Gas Is Set to Buy Rockcliff Energy: One of the Top Haynesville's Producers
01/11/2023
On January 3, U.S. natural gas producer Rockcliff Energy from private equity firm Quantum Energy Partners was set to be sold to a unit of Tokyo Gas Co. Ltd. for roughly $4.6 billion, including debt.
The all-cash agreement with Houston-based TG Natural Resources, which is 70% possessed by the Japanese energy firm, is decided to be claimed this month, according to anonymous resources, as the discussions were requested to be confidential. Castleton Commodities International (CCI) owns the rest of TG Natural Resources.
TG Natural Resources is organizing funding from several financing sources to sponsor the transaction, including banks and private credit providers, however, no deal was guaranteed and the talks could end without a final agreement.
The agreement would be the latest move by a Japanese entity to secure gas in jurisdictions perceived as friendly, the importance of which has increased for the import-dependent Asian nation after supply markets for the commodity were roiled by Russia's invasion of Ukraine.
Quantum and CCI refused to comment, Rockcliff and TG Natural Resources has not responded to requests for comment yet, and Tokyo Gas was not immediately available to comment.
Rockcliff generates more than 1 Bcf/d of natural gas from the Haynesville shale formation, which spans across Louisiana and East Texas. Quantum originally financed the Rockcliff management team with a $350 million investment in 2015. Rockcliff Energy is widely accepted as a leader in the Haynesville Shale: more than 270,000 net acres in East Texas, almost 90% of the acreage is held by production, and it comprises 100% non-federal lands.
Buying Rockcliff would incredibly raise TG Natural Resources' operations, with the company producing almost 330 net MMcf/d as of June 2022 from the Haynesville formation, the company admits on its website.
Japan's biggest city gas supplier is in the midst of a portfolio reshuffle targeted at moving resources to growth areas. In October, Tokyo Gas agreed to sell its stakes in a portfolio of four Australian LNG projects for $2.15 billion to a unit of U.S. investment firm EIG.
As Russia's invasion of Ukraine has stopped gas supply flows to Europe and led European nations to import record amounts of LNG cargoes, it strained global supplies and elevated prices.
Not possessing a rich amount of resources, Japan has been working to diversify from Russia's Sakhalin project, which estimates for 9% of Japan's total LNG imports of 74.3 million tonnes a year.
Japanese companies signed several deals on December 28 to get LNG supplies, with a preliminary agreement lasting up to 10 years with Oman LNG and a 20-year deal with U.S.-based Venture Global. Moreover, Japan imported 7.1 million tonnes of LNG from the United States in 2021, estimated for 9.5% of its total imports.
On January 4, Tokyo Gas shares decline by 5.07% at the midday break in Tokyo trading.
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CA$375 Million Bolt-on Deal to Expand Crescent Point
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On December 9, Crescent Point Energy Corp. announced a purchase and sale agreement to develop its core Kaybob Duvernay assets, which will bolt on production, the midstream infrastructure and technical data. With the deal, the company has committed more than US $1 billion to the play. Crescent Point, the Alberta-based company, is purchasing almost 65,000 net acres from Paramount Resources Ltd. for CA $375 (US $274 million) cash. The assets estimate more than 4,000 boe/d, 50% liquids, and include a gas plant, associated pipelines, water infrastructure, and seismic data. The acquired asset’s production consists of 35% condensate, 15% NGL, and 50% shale gas.
NOG Grows Its Acreage Position in Delaware
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According to the company’s press release on December 19, Northern Oil and Gas Inc. (NOG) closed its announced deal with a private seller of non-operated interests in the Northern Delaware Basin for $131.6 million in cash. The acquisition was announced with a $13 million deposit in October and is the third Permian Basin acquisition since August, adding to NOG’s $400 million of Permian Basin acquisitions in 2022. The assets of 2,100 net acres are primarily operated by a private company Mewbourne Oil Co., with production anticipated to total almost 2,500 boe/d in 2023. Also, Coterra Energy Inc. and Permian Resource Corp. are operators of the assets. The assets contain high-quality, low breakeven development that is leveraged to some of NOG’s top operating partners, as our investors have come to expect.
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In order to sell its part of the sprawling Eagle Ford Shale acreage, Chesapeake Energy Corp. on January 18 concluded an agreement to trade its Brazos Valley region assets to WildFire Energy I LLC for $1.425 billion.
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On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.