[Editor’s note: This story was updated at 9:56 a.m. CT Aug. 4.]

Range Resources Corp. reached an agreement in July for the sale of its North Louisiana assets with potential proceeds of up to $335 million, the Fort Worth, Texas-based company said in an Aug. 3 release.

As part of an purchase and sale agreement, Range will divest its North Louisiana assets to Castleton Resources LLC for gross proceeds of $245 million. Castleton Resources also agreed to pay an additional $90 million contingent on future commodity prices.

Range acquired the asset in 2016 through an all-stock merger with Memorial Resource Development, picking up about 220,000 net surface acres in the Terryville Field in Northern Louisiana. The transaction, which included the assumption of $1.1 billion in debt, was valued at about $4.4 billion.

However, in recent years, Range has focused the majority of its resources on its Marcellus Shale position in southwest Appalachia.

“After the sale of our North Louisiana assets, Range’s cost structure and capital productivity will take another meaningful step forward, driven by material improvements in our cash unit costs and a base decline solidly under 20%,” Jeff Ventura, the company’s CEO, said in a statement on Aug. 3.

Range Resources, Memorial Resource Development North Louisiana Terryville Field Map

According to the company website, Range has about 140,000 net acres in North Louisiana with stacked pay potential for the Lower Cotton Valley. At the time of the sale, the North Louisiana assets were producing approximately 160 MMcfe/d. Range did not have any drilling and completion activity planned for the assets in 2020. 

Per the agreement with Castleton Resources, Range will retain certain commitments through their remaining term. Range intends to use $28.5 million of the sale proceeds to reduce a portion of the retained commitments.

Castleton Resources is an E&P company focused on being a consolidator in the Ark-La-Tex region. The company is owned by Castleton Commodities International LLC (CCI) and Tokyo Gas Co. Ltd.

Pro forma for the Range acquisition, Castleton Resources will own over 315,000 net acres of leasehold in East Texas and northern Louisiana with total daily net production of nearly 500 MMcfe/d.

In a statement commenting on the acquisition, Craig Jarchow, president and CEO of Castleton Resources, said the company is well-positioned to enhance the value of Range’s North Louisiana assets through “further operational enhancements, among other activities.”

“We are very pleased to be able to purchase quality assets at a low-point in the commodity-price cycle. ... 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,” Jarchow said.

Following close of the deal with Range, Tokyo Gas will increase its ownership in Castleton Resources to approximately 70% from 46%, with the balance to be held by CCI. Castleton Resources also agreed to change its name to “TG Natural Resources LLC” by late March 2021.

“Tokyo Gas America participated in Castleton Resources in May 2017, and has grown steadily with Castleton Resources by acquiring shale and tight sand assets since then,” said Kazuya Kurimoto, president and CEO of Tokyo Gas America Ltd., a subsidiary of Tokyo Gas Co. Ltd. “We are pleased that Castleton Resources will join Tokyo Gas group companies, and with Castleton Resources as the base, we will continue to aim for further business expansion in East Texas and Louisiana.”


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The North Louisiana transaction is expected to close in August with an effective date of Feb. 1.

Greenhill was M&A adviser and Kirkland & Ellis was legal adviser to Castleton Resources in the transaction. K&L Gates was legal adviser to Tokyo Gas America Ltd. Bracewell LLP was legal adviser to CCI. A Locke Lord team led by Terry Radney and Hunter Summerford represented Range Resources in the sale.

Following the planned closing of the North Louisiana asset sale, Range’s liquidity is expected to exceed $1.6 billion, according to the company release.

At the end of the second quarter, Range had $639 million drawn on its revolver and over $1.4 billion of additional borrowing capacity under the commitment amount. Range expects its $3 billion borrowing base to be unchanged following the sale of its North Louisiana assets.