Oil & Gas News

Tokyo Gas Buys Rockcliff Energy for $2.7B

Tokyo, Gas, Rockcliff

Tokyo Gas Co., through its subsidiary Tokyo Gas America Ltd., is set to make a major move in the U.S. shale gas market by acquiring Haynesville shale operator Rockcliff Energy II LLC. The deal, worth about $2.7 billion, marks a significant expansion of Tokyo Gas America’s shale gas operations in the U.S.

The transaction involves Tokyo Gas America buying all shares of Rockcliff, which is currently under Mineral Rights, Sell Mineral RightsQuantum Energy Partners. This acquisition will be made through TG Natural Resources, a part of Tokyo Gas. The agreement, signed on December 15, is expected to be finalized by December 29.

This acquisition is part of a larger trend in the global energy sector, where oil and gas companies are leveraging high profits from rising resource prices to make multi-billion dollar deals. For example, Occidental Petroleum Corp. recently acquired Texas shale driller CrownRock LP, Exxon Mobil Corp. made a $60 billion purchase of Pioneer Natural Resources Co., and Chevron Corp. agreed to a $53 billion buyout of Hess Corp. Additionally, Woodside Energy Group Ltd. is in early discussions with Santos Ltd. for a potential partnership that could lead to a leading position in liquefied natural gas (LNG) exports.

Tokyo Gas pointed out that the construction of new LNG export terminals in the U.S. is likely to increase gas demand. The company has been seeking to grow its shale operations, particularly focusing on assets in Texas and Louisiana.

Following the acquisition of Rockcliff, the production volume of gas and natural gas liquid by TG Natural Resources is expected to quadruple, reaching around 1,300 million cubic feet per day. Tokyo Gas sees this as a foundational step towards strengthening its overseas earnings.

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Despite the inherent risks in resource prices, Takashi Nakao, Senior General Manager at Tokyo Gas’s Global Business Development Department, expressed confidence in the investment’s value during an online press conference. He noted the advantageous positioning of TG Natural Resources and Rockcliff’s mining claims in adjacent areas, which he believes will enhance market competitiveness through reduced production costs amidst changing market conditions.

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