Page 8 - NorthAmOil Week 44 2021
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NorthAmOil INVESTMENT NorthAmOil
Southwestern to buy GEP
Haynesville for $1.85bn
US SOUTHWESTERN Energy announced on Haynesville shale locations and about 700 pro-
November 4 that it had struck a deal to buy GEP spective Bossier shale locations.
Haynesville, a joint venture between GeoSouth- Southwestern will pay $1.325bn in cash and
ern Energy and Blackstone Group unit GSO roughly $525mn in common stock for the acqui-
Capital, for $1.85bn in cash and stock. sition, handing over around 99mn shares based
The deal will expand Southwestern’s foot- on its average share price of $5.285 as of Novem-
print in Louisiana’s Haynesville shale – a region ber 2.
it entered earlier this year when it bought Indigo Once the transaction closes, the combined
Natural Resources for nearly $3bn – making it the company is anticipated to produce 4.7bn cubic
largest producer in the play. It will also become feet (133 mcm) equivalent per day. Around 65%
the biggest dual-basin natural gas producer in of its output will be marketed to what Southwest-
the US, given that it also has a major presence in ern described as growing demand centres along
the Appalachian Basin in the Northeast. the US Gulf Coast, which it expects to position
GEP Haynesville’s assets are primarily located the company to “efficiently capture natural gas
in Louisiana’s DeSoto, Red River and Sabine price improvement and expand margins”. This
parishes. The company holds 120,000 net acres comes as gas demand from liquefaction termi-
(486 square km) in the region, of which 84% is nals on the Gulf Coast is booming, and indeed,
operated and 97% is held by production (HBP). Southwestern highlighted the deal’s impact in
Its output from the assets amounted to 700mn terms of expanding its exposure to the LNG cor-
cubic feet (20mn cubic metres) per day from 400 ridor in the region.
wells at the end of the third quarter. It has an esti- The deal comes as the wave of mergers and
mated 6 trillion cubic feet (170bn cubic metres) acquisitions (M&As) in US shale is slowing, but
of gas equivalent in net resource potential, 700 illustrates that it is not over yet.
PERFORMANCE
US LNG feed gas demand hits six-month high
amid Sabine Pass Train 6 commissioning
US GULF COAST FEED gas demand at US liquefaction and export however, fell to 600mn cubic feet (17 mcm) per
terminals is reported to have hit a six-month day, the lowest levels since September, according
high of 11.8bn cubic feet (334mn cubic metres) to Refinitiv. This came after a segment of pipeline
last week. This came amid the ongoing commis- that supplies feed gas to the plant was reported in
sioning of the sixth liquefaction train at Cheniere late October to be down for maintenance.
Energy’s Sabine Pass plant in Louisiana – the Demand for LNG remains high, with buyers
largest in the US. in both Europe and Asia scrambling to replen-
However, shipments were also reported to ish gas stocks ahead of the winter heating season,
have stalled at Sabine Pass last week owing to and Europe also dealing with reduced pipeline
high winds, which forced services in the channel flows from Russia. This has put US LNG pro-
that serves the terminal to be temporarily sus- ducers in a favourable position, spurring them to
pended. This also briefly affected Sempra Ener- export as much of the super-chilled fuel as possi-
gy’s Cameron LNG terminal, also in Louisiana. ble, despite outages related to weather issues and
By November 3, Sabine Pass appeared to maintenance.
have bounced back, with data provider Refini- And more capacity will come online soon.
tiv reporting that feed gas flows to the plant had Cheniere said in its third-quarter report,
risen to 4.2 bcf (119 mcm) per day – their highest released this week, that Train 6 at Sabine Pass was
level since April. This prompted some traders to on course to reach substantial completion in the
speculate that Train 6 was now producing LNG, first quarter of 2022. Also in Louisiana, Venture
having begun to receive feed gas in September. Global LNG is preparing to bring its Calcasieu
Feed gas flows to Freeport LNG in Texas, Pass terminal online around the same time.
P8 www. NEWSBASE .com Week 44 04•November•2021
