TG Natural Resources LLC (TGNR), a company indirectly owned by Tokyo Gas Co., Ltd. and Castleton Commodities International LLC (CCI), announced that it has closed on a transaction to acquire a 70% interest in the East Texas gas assets of Chevron U.S.A. 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). This will 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.
Craig Jarchow, CEO of TGNR said, “We are 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 realize synergies of over $170 million during the development of the asset.”
