Japan's Osaka Gas Co. Ltd. said June 29 it has agreed with Houston-based Sabine Oil & Gas Corp. and its subsidiary to buy a working interest in an East Texas shale gas project for about 16 billion yen (US$144.53 million).
As part of the agreement, Osaka Gas will acquire a 30% stake in the formations in the shale assets, a company spokesman said. The transaction marks a second acquisition for the Japanese company of a U.S. shale gas stake.
Sabine's East Texas shale gas project includes about 450 wells located on roughly 100,000 acres, 35,000 acres of which will be net to Osaka Gas, targeting the Cotton Valley Sand and Haynesville Shale formations.
The shale gas assets currently produce about 45 MMcfe/d, or about 300,000 tons per annum of LNG. Sabine and Osaka Gas plan to continue developing the acreage and increasing production, the company said.
The acquisition will add to Osaka Gas' upstream business portfolio to build the natural gas value chain in the U.S., which includes the Freeport LNG project and electric power business.
Vinson & Elkins advised Osaka Gas USA Co. in its agreement with Sabine. (US$1 = 110.7000 yen)
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