Shizuoka Gas enters US natural gas sector with Eagle Ford asset deal
Shizuoka Gas Co. Ltd. has agreed to a deal with Tokyo Gas to enter the upstream natural gas sector in North America with interest in the Eagle Ford shale formation in South Texas.
The company signed a heads of agreement with Tokyo Gas America Ltd. subsidiary TG Eagle Ford Resources LP (TGER) to acquire Tokyo Gas’s 25% interest in about 33,000 acres in the dry gas portion of the Eagle Ford and other areas in Webb and La Salle counties held by a joint venture of Lewis Energy Group (operator), TGER, and BP Energy.
Negotiations ahead of a sales and purchase agreement are continuing. Shizuoka Gas anticipates acquiring the interest interests for $130 million through a local subsidiary it expects to be established this year.
Tokyo Gas bought into the Eagle Ford assets in 2016 by acquiring certain interests held by Vertex Corp. as its second shale gas development project in the US, the company said in a release Feb. 21 (OGJ Online, June 21, 2016). The company said it is selling the asset after a review of its portfolio to improve asset efficiency and will subsequently focus on its TG Natural Resources business, which holds assets in East Texas and North Louisiana.
Earlier this month, Elliott Investment Management LP and Elliott Advisors (UK) Ltd. noted the firm 'welcomed' Tokyo Gas's establishment of a committee to review its "non-core assets for divestment." The company had been under scrutiny from the shareholder to streamline its portfolio.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.
