EnSight assets include nearly 5,000 net acres in the core of the Haynesville Shale, with 44 producing wells and five wells in progress and currently produce around 45MMcf/d
Tellurian adds assets in Haynesville shale. (Credit: WORKSITE Ltd. on Unsplash)
Tellurian, through its wholly owned subsidiary Tellurian Production (TPC), has agreed to acquire natural gas assets located in the Haynesville Shale for $125m.
Haynesville Shale constitutes a Jurassic Period rock formation that lies beneath large areas of southwestern Arkansas, northwest Louisiana, and East Texas.
The US-based natural gas exporter will acquire the assets from EnSight IV Energy Partners, and EnSight Haynesville Partners, collectively known as EnSight.
The transaction consideration also includes a contingent payment of $7.5m, based on the price of natural gas and may be payable in March 2023 under certain conditions.
Tellurian intends to fund the acquisition with available cash and anticipates closing on the EnSight assets in the third quarter of this year.
Tellurian president and CEO Octávio Simões said: “Tellurian 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 ~30%, increases upstream asset-level EBITDA by ~25%, and expands upon our existing platform.”
EnSight assets include nearly 5,000 net acres in the core of the Haynesville Shale in DeSoto, Bossier, Caddo, and Webster Parishes, Louisiana.
With 44 producing wells and five wells in progress, the assets currently produce around 45 million cubic feet of natural gas per day (MMcf/d).
The acquisition will increase TPC’s Haynesville Shale acreage to nearly 20,000 net acres, with more than 275 gross drilling locations and net resource estimated to be more than trillion cubic feet.
Tellurian said that it will continue EnSight’s currently operating one-rig drilling programme in the acquired assets through the fourth quarter of this year.
In addition, the company intends to advance its drilling programme for 2023 as a two-rig programme with 350MMcf/d of net production.
TPC president John Howie said: “We have been diligently growing our natural gas production and reserves in the Haynesville. These assets provide Tellurian with both cash flow and a physical hedge for Driftwood LNG.
“The EnSight asset is a great fit with Tellurian’s existing position in the Haynesville Shale and allows us to step into an ongoing development program and bring online significant additional natural gas volumes in the fourth quarter of 2022.”