Tellurian Acquires Natural Gas Assets in Haynesville Shale for $125 Million

Tellurian Inc. has entered into an agreement to purchase natural gas assets located in the Haynesville Shale from EnSight Energy Partners LP for $125 million, the company said on Wednesday.

Tellurian Production LLC (TPC), Tellurian’s wholly owned subsidiary, agreed to pay up to $132.5 million to purchase the natural gas assets from EnSight IV Energy Partners LLC and EnSight Haynesville Partners LLC. The assets are located in the core of the Haynesville Shale in DeSoto, Bossier, Caddo, and Webster parishes in Louisiana.

“We have been diligently growing our natural gas production and reserves in the Haynesville,” John Howie, TPC president, said. “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 on-line significant additional natural gas volumes in the fourth quarter of 2022.”

The EnSight assets comprise about 5,000 net acres, roughly 45 MMcf/d (100% natural gas) of current net production and 30 gross drilling locations. Proved reserves are approximately 108 Bcf of natural gas. The assets also include 44 producing wells and five wells in progress at transaction close, anticipated in the third quarter.

At closing, TPC’s Haynesville Shale acreage increases to roughly 20,000 net acres, with more than 275 gross drilling locations and a net resource expected at over 2 trillion cubic feet (Tcf). Tellurian anticipates TPC 2023 drilling program to be a two-rig program with approximately 350 MMcf/d of net production.

“Tellurian continues to focus on two critical pathways — progressing Driftwood LNG and continuing to increase our upstream footprint,” Octávio Simões, Tellurian president and CEO, said. “This transaction grows our 2023 estimated natural gas production by about 30%, increases upstream asset-level EBITDA by about 25%, and expands upon our existing platform.”

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