Tellurian Completes $126 Million Acquisition of Haynesville Natural Gas Assets
Tellurian Inc. subsidiary Tellurian Production LLC (TPC) said on Thursday it has closed the previously announced acquisition of certain assets in the Haynesville from privately held EnSight IV Energy Partners, LLC and EnSight Haynesville Partners LLC.
In July, TPC agreed to pay up to $132.5 million to purchase the natural gas assets from EnSight, whose assets comprised about 5,000 net acres, roughly 45 MMcf/d (100% natural gas) of current net production, 30 gross drilling locations and roughly 108 Bcf of natural gas proved reserves.
Additionally, these assets included 44 producing wells and five wells in progress at the time the deal was announced.
With the closing of the EnSight acquisition, TPC has current production of approximately 150 million cubic feet/day (MMcf/d) from assets in the Haynesville Basin. In addition, TPC operates 11 wells currently being drilled or completed, all of which TPC expects to turn to sales before the end of the year.
These new wells are expected to increase TPC’s production rate to approximately 250 MMcf/d.
“This closing represents significant progress for Tellurian and our business model,” Octávio Simões, Tellurian president and CEO, said. “By owning and operating upstream assets, a pipeline network and the Driftwood LNG terminal, Tellurian will have the ability to sell natural gas into domestic or international markets. This combination of assets represents a compelling value for our shareholders.”
The cash consideration at closing was $125.5 million, revised from the announced $125 million due to preliminary purchase price adjustments. The consideration was funded with cash on hand.
“The EnSight acquisition is an excellent strategic and operational fit for Tellurian,” John Howie, president of TPC, said. “The combination of our existing assets with this acquisition results in an acreage position of more than 20,000 acres and an inventory of more than 275 high return, de-risked drilling locations, most of which we can drill opportunistically for incremental free cash flow.”
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