US LNG firm Tellurian, the developer of the Driftwood LNG export facility in Louisiana, has purchased natural gas assets in the Haynesville Shale, as part of plans to boost its upstream position.
In that regard, Tellurian Production (TPC), a unit of Tellurian, entered into an agreement to purchase natural gas assets from privately held EnSight IV Energy Partners and EnSight Haynesville Partners.
According to a Tellurian statement on Wednesday, the purchase price is $125 million, subject to customary closing adjustments, and a contingent payment of $7.5 million which is based on the price of natural gas and may be payable in March 2023 under certain conditions.
Also, Tellurian said it would fund the purchase with cash on hand and expects closing on the EnSight assets in the third quarter of 2022.
The effective date of the transaction is August 1, 2022.
Progressing Driftwood LNG and boosting upstream footprint
Tellurian said the assets currently have a net production of about 45 million cubic feet of natural gas per day (MMcf/d).
About 5,000 net acres are located in the core of the Haynesville Shale in DeSoto, Bossier, Caddo, and Webster Parishes, Louisiana.
Moreover, the assets include 44 producing wells and five wells in progress at transaction close.
EnSight is currently operating a one-rig drilling program, which Tellurian plans to maintain on the acquired assets through the fourth quarter of 2022.
Tellurian president and CEO Octavio Simoes said in the statement the company “continues to focus on two critical pathways – progressing Driftwood LNG and continuing to increase our upstream footprint.”
“This transaction grows our 2023 estimated natural gas production by about 30 percent, increases upstream asset-level Ebitda by about 25 percent, and expands upon our existing platform,” he said.