Rockcliff Energy II, a Texas-based upstream natural gas company, has agreed to be acquired by TG Natural Resources (TGNR) for $2.7bn.

A portfolio company of Quantum Energy Partners, Rockcliff Energy II is engaged in developing the East Texas Haynesville shale. The company maintains a presence in five Texas counties, overseeing operations across more than 200,000 net acres with a gross operated natural gas production of over 1.3 billion cubic feet per day (Bcf/d).

Quantum Energy Partners made its investment in the upstream company in 2015.

Rockcliff Energy II CEO Alan Smith said: “We are extremely proud of the business we have built at Rockcliff over the past eight years, becoming one of the premier private natural gas companies in the United States.

“The amazing growth we have been able to achieve, taking gross production from approximately 100 MMcf/d at our initial acquisitions in 2017 to over 1.3 Bcf/d today, is a testament to the tireless efforts and perseverance of the entire Rockcliff team.

“The continued support of our partners at Quantum – who have shared our vision from day one to position Rockliff as an industry-leading natural gas producer – has played an essential role in our exceptional growth and commercial success.”

TG Natural Resources is an upstream producer in the Ark-La-Tex region of East Texas and Northern Louisiana. It is co-owned by Tokyo Gas America’s subsidiary TG East Texas Resources and Castleton Commodities International’s subsidiary CCI U.S. Asset.

Following the acquisition of Rockcliff Energy II, the gas and natural gas liquid production volume of TG Natural Resources is set to surge, growing by about fourfold.

The increase will elevate the output from approximately 330 million cubic feet per day (9.3 million m3/day, gas equivalent) to 1,300 million cubic feet per day (37 million m3/day, gas equivalent).

Tokyo Gas America president and CEO Akira Inukai said: “In May 2017, we invested in Castleton Resources LLC, the predecessor of TGNR, and in August 2020, we made Castleton Resources LLC a subsidiary.

“The Texas and Louisiana areas where TGNR owns assets are in close proximity to new LNG export terminals where future gas demand is expected to increase, and TGNR has been seeking to acquire superior assets in these areas.

“We are pleased to have acquired Rockcliff, which is located adjacent to the TGNR assets and therefore aligns very well with our overall growth strategy.”

Subject to customary conditions and receipt of regulatory approvals, the deal is anticipated to close by the end of this year.

Rockcliff Energy II was advised by J.P. Morgan Securities as financial advisors, with legal counsel provided by Vinson & Elkins.

TG Natural Resources received merger and acquisition (M&A) advisory services from Greenhill. Its financial advisors were Goldman Sachs & Co. and BofA Securities while the legal counsel was provided by Kirkland & Ellis.