According to sources familiar with the situation, a division of Tokyo Gas Co Ltd is in advanced talks to acquire Rockcliff Energy, a producer of natural gas in the United States, from private equity company Quantum Energy Partners for a price of around $4.6 billion, including debt.
The necessity of securing gas in friendly jurisdictions has grown for the import-dependent Asian country as a result of supply markets for the commodity being disrupted by Russia's invasion of Ukraine. If the transaction is finalised, it would be the most recent action by a Japanese business to do so.
The Japanese energy company, which owns 70% of Houston-based TG Natural Resources, is expected to announce the all-cash acquisition this month, according to people who asked to remain anonymous because the negotiations are private. The remaining portion of TG Natural Resources is held by Castleton Commodities International (CCI).
The sources further stated that TG Natural Resources is organising finance from a number of financial sources, including banks and private credit providers, to support the acquisition. However, they cautioned that no deal was guaranteed and that the discussions could terminate without an agreement.
From the Haynesville shale formation, which spans Louisiana and East Texas, Rockcliff produces more than 1 billion cubic feet of natural gas each day. The Rockcliff management team was initially sponsored by Quantum with a $350 million investment in 2015.
The acquisition of Rockcliff will dramatically expand the business activities of TG Natural Resources, which, according to its website, will produce about 330 net million cubic feet per day from the Haynesville as of June 2022.
The largest municipal gas provider in Japan is in the process of reallocating resources to places with the most growth potential. In October, Tokyo Gas and a division of the American investment company EIG reached an agreement to sell their respective holdings in a portfolio of four Australian LNG projects for $2.15 billion.