Osaka Gas Co. Ltd. agreed on July 29 to buy Houston-based independent Sabine Oil & Gas Corp. as the Japanese company looks to U.S. shale for growth.
The transaction, which still requires government approvals, will mark the first time a Japanese company has purchased a U.S.-based shale gas developer, Osaka Gas said in its release.
Sabine, formerly a publicly-traded E&P which emerged as a private company after filing for bankruptcy in 2016, operates in the Haynesville and Cotton Valley shale plays in East Texas. According to a report by Reuters, the sale of Sabine is worth $610 million.
The acquisition of Sabine includes an acreage position in East Texas, which Osaka Gas had acquired a 35% interest in for about $144.5 million last year. Since acquiring its stake in Sabine’s East Texas position, Osaka said: “The wells have been producing more than expected volumes, generating stable cash flow.”
Sabine’s position totals 175,000 net acres and about 1,200 wells in Harrison, Panola, Rusk and Upshure counties, Texas. Production from the acreage is 210 million cubic feet equivalent per day of shale gas, according to the company release.
Osaka Gas said the acquisition of Sabine will support its long-term goal to expand its global energy businesses “along the energy value chain from upstream to mid- and downstream business including LNG trading.”
In the U.S., Osaka Gas’ core businesses comprise the Sabine shale gas project, Freeport LNG and independent power producer (IPP) projects.
Under its long-term business strategy, Osaka Gas plans to boost its earnings from overseas to account for one-third of its total recurring profit in the business year to March 2031, up from 9% in the year ended March this year, according to the report by Reuters.
Vinson & Elkins advised Osaka Gas on its acquisition of Sabine, led by partner Shay Kuperman with assistance from associates Josh Rocha and Tara Tegeleci. Meanwhile, Hunton Andrews Kurth LLP represented Sabine.
Emily Patsy can be reached at epatsy@hartenergy.com.
Recommended Reading
Keeping it Tight: Diversified Energy Clamps Down on Methane Emissions
2024-04-24 - Diversified Energy wants to educate on emission reduction successes while debunking junk science.
Darbonne: The ESG Sword: BlackRock's Life, Death by ESG
2024-04-17 - BlackRock, the $10 trillion investment manager, is getting heat for too much ESG investing, while shareholders are complaining it’s doing too little.
Fire Closes Atlas Energy’s Kermit, Texas Mining Facility
2024-04-15 - Atlas Energy Solutions said no injuries were reported and the closing of the mine would not affect services to the company’s Permian Basin customers.
Coalition Launches Decarbonization Program in Major US Cities, Counties
2024-04-11 - A national coalition will start decarbonization efforts in nine U.S. cities and counties following a federal award of $20 billion “green bank” grants.
Exclusive: Scepter CEO: Methane Emissions Detection Saves on Cost
2024-04-08 - Methane emissions detection saves on cost and "can pay for itself," Scepter CEO Phillip Father says in this Hart Energy exclusive interview.