A Houston company is expanding its natural gas holdings in the Haynesville Shale, per a report in The Advocate.
behind the massive Driftwood LNG project in southwest Louisiana has agreed to pay $125 million to expand its natural gas holdings in the Haynesville Shale in northwest Louisiana.
Tellurian Inc., has a deal with EnSight IV Energy Partners LLC and EnSight Haynesville Partners LLC for assets in northwest Louisiana.
Tellurian said the EnSight deal includes rights to about 5,000 acres in the Haynesville Shale in DeSoto, Bossier, Caddo and Webster parishes, according to The Advocate report. With reserves of roughly 108 billion cubic feet of natural gas, the acreage produces about 45 million cubic feet of natural gas per day via 44 active wells.
The report notes that the deal is expected to boost Tellurian’s Haynesville production from 39 million cubic feet per day to 350 million cubic feet by 2023. It also will increase Tellurian’s Haynesville holdings to 20,000 acres and more than 2 trillion cubic feet in natural gas reserves.
The EnSight companies are headquartered in Shreveport and led by George Baldwin Jr., a petroleum engineer based in Shreveport.
Tellurian said it anticipates closing the transaction by the end of the third quarter. It will use cash on hand to fund the deal.
The natural gas will be fed to Driftwood LNG, a $25 billion LNG export terminal under constructio on the west bank of the Calcasieu River, near Lake Charles. The plant is expected to export up to 27.6 million tons of liquefied natural gas each year.
”These assets provide Tellurian with both cash flow and a physical hedge for Driftwood LNG,” John Howie, president of Tellurian Production LLC, said in a statement per The Advocate. ”The EnSight asset is a great fit with Tellurian’s existing position in the Haynesville Shale and allows us to step into an ongoing development program and bring online significant additional natural gas volumes in the fourth quarter of 2022.” Tellurian officials said the plant is expected to produce LNG beginning in 2026. Construction on the terminal began in April, despite a lack of finalized financing for the work.
Tellurian’s latest quarterly report indicates the company is still trying to secure financing. A final investment decision is targeted for sometime this year, according to the U.S. Energy Information Administration.