Castleton Commodities International LLC said Nov. 18 it will buy Anadarko Petroleum Corp.’s (NYSE: APC) Carthage assets on the eastern border of Texas in a deal valued at more than $1 billion.

The company isn’t stopping there, saying more acquisitions are possible in East Texas.

Anadarko disclosed Oct. 31 that it is divesting the Carthage assets and related production of 40,000 barrels of oil equivalent per day (Mboe/d) in the third quarter of 2016, most of which is natural gas. Anadarko’s production mix on the asset is 72% gas, 25% NGL and 3% oil.

With the deal, CCI’s East Texas leasehold will increase to 160,000 net acres and bring its net production to more than 320 million cubic feet equivalent per day (MMcfe/d), the company said.

Based on Anadarko’s production numbers and Texas Railroad Commission records through August, CCI’s natural gas production in Texas will increase five-fold to roughly 200 Mcf/d from about 39 Mcf/d.

CCI, headquartered in Stamford, Conn., has telegraphed its intention to purchase natural gas or oil properties with a high PDP component.

Douglas R. De Filippi, managing director and senior vice president for business development at CCI said of the East Texas area that the company will “continue to expand our footprint in the region.”

As for its aspiration for oil acquisitions, De Filippi told Hart Energy on Nov. 18 that “the area is prone to gas as you know, but some oily Cotton Valley may also be part of the picture.”

In August 2015, CCI purchased East Texas assets and operations from EDF Trading Resources LLC, including 545 oil and gas wells and about 30,855 net acres in several counties. The purchase price wasn’t disclosed.

The acquisition provided CCI with a significant proven reserve base that complemented its existing oil and gas operations in the area.

Craig Jarchow, President of CCI Oil and Gas, said the company is positioned to enhance the value of the acquired assets through further development of the Haynesville Shale.

“We remain focused on strategically growing and diversifying our upstream and midstream assets, and broadening our portfolio with attractive opportunities that complement our long-term business strategy," he said.

Société Générale was the financial adviser to CCI for the transaction. Vinson & Elkins LLP and Bracewell LLP served as legal advisers to CCI.

JPMorgan Chase Bank NA was the lead arranger and lead book-runner in connection with the reserve-based lending facility for the transaction. ABN AMRO Capital USA LLC, Wells Fargo Securities LLC, Société Générale and Bank of America Merrill Lynch were joint lead arrangers and joint book-runners.

CCI is well capitalized. In June, CCI closed two committed credit facilities totaling $3.3 billion. The facilities included a committed senior secured working capital facility and a committed unsecured revolving credit facility.

Both facilities were significantly oversubscribed, with CCI receiving $4.5 billion of commitments in total.

CCI is a global commodities merchant that owns, operates and develops commodities-related upstream and infrastructure assets. CCI has offices in Calgary, Geneva, Houston, London, Shanghai and other major cities.

Darren Barbee can be reached at dbarbee@hartenergy.com.

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