TGNR Buys 70% Stake in East Texas Gas Assets
TG Natural Resources (TGNR), a company indirectly owned by Tokyo Gas Co and Castleton Commodities International, has announced that it has closed on a transaction to acquire a 70% interest in the East Texas gas assets of Chevron USA. Inc., a subsidiary of Chevron Corporation, for $525 million, with $75 million paid in cash and $450 million as a capital carry to fund Haynesville development, prior to customary adjustments.
With this transaction, TGNR will add over 250 gross locations to its existing Haynesville inventory (assuming four wells per section), the company said in an official release.
This transaction will also extend TGNR’s inventory life beyond 20 years at the current development pace, not counting the Bossier and Cotton Valley plays which are commercial at current prices. The Haynesville acreage in this transaction is relatively undrilled and held by shallower production, allowing parent-child effects between wells to be mitigated.
TGNR CEO Craig Jarchow said that they were excited to partner with a world-class company like Chevron on this transaction. There is considerable operational overlap between the Chevron acreage and the legacy TGNR acreage, which will allow TGNR to realise synergies of over $170 million during the development of the asset.
Truist Securities served as the financial advisor to TGNR and Kirkland & Ellis LLP served as the legal advisor to TGNR.
TGNR is one of the largest producers in the Ark-La-Tex region of East Texas and Northern Louisiana, and is jointly owned by TG East Texas Resources LLC, a wholly owned subsidiary of Tokyo Gas America, and CCI US Asset Holdings LLC, a wholly owned subsidiary of Castleton Commodities International LLC.
About Tokyo Gas
Tokyo Gas was founded in 1885 and is Japan’s largest provider of city gas primarily in the Tokyo metropolitan area and surrounding Kanto region. Since the liberalisation of Japan’s electricity market, it has also been providing electricity in the same area.
As of its group’s management vision “Compass2030,” Tokyo Gas promotes the challenge of achieving “Net-Zero CO2” and will lead the transition to a decarbonized society.
CCI is a global energy commodity merchant with integrated businesses focused on marketing, merchandising, and trading commodities, and the ownership, operation, and development of commodities-related infrastructure assets.
