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Abu Dhabi’s Mubadala Energy agreed to acquire a 24.1% stake in Kimmeridge’s unconventional gas and LNG export ventures. Financial terms were not disclosed.

The investment in Kimmeridge’s expanding natural gas business marks Mubadala Energy’s entry into the U.S. market, the firm said. Mubadala is owned by Mubadala Investment Co., a sovereign wealth fund for the government of Abu Dhabi.

The company acquired a stake in Kimmeridge’s SoTex HoldCo LLC, which holds two portfolio companies:

  • Kimmeridge Texas Gas (KTG), which has 200,000 net acres in the Eagle Ford’s dry gas window in South Texas; and
  • Commonwealth LNG, a 9.3 million metric tons per annum liquefaction and export project being planned near Cameron, Louisiana.

The deal is subject to customary closing conditions and approvals before closing.

Speaking with Hart Energy from Abu Dhabi, Kimmeridge Managing Partner Ben Dell said on April 10 the deal marks an expansion of a seven-year relationship with Mubadala.

"[Mubadala] as a group are a big believer in the integrated gas story and the ability to scale that up," Dell said. "That's ultimately how the partnership came together."

International players poured billions into U.S. shale drilling ventures in the past decade, with varying results. But foreign companies are revisiting U.S. gas today with a clearer ability to integrate into the global LNG trade, Dell said.

KTG currently produces more than 500 Mcfe/d from its South Texas leasehold. The company aims to grow output to 1.5 Bcfe/d by 2031.

KTG is led by CEO David Lawler, who previously served as chairman and president of BP America.

KTG is looking to double its Gulf Coast production to 1 Bcf/d in the coming years and possibly do M&A outside the Eagle Ford, Lawler said in March at Hart Energy’s DUG Gas Conference in Shreveport, Louisiana.

Kimmeridge aims to reach a final investment decision (FID) for Commonwealth LNG later this year. First offtake from the plant is planned for 2029.

“Through this partnership and our entry into the U.S., we are to further build on our leading role in building energy champions that deepen our position in the global economy,” said Bakheet Al Katheeri, chairman of the Mubadala Energy board and CEO of Mubadala’s UAE Investments Platform.

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International investment

Mubadala’s entry into U.S. natural gas is further evidence of healthy interest for Lower 48 oil and gas assets by international players.

Earlier this week, NextDecade Corp. announced a 20-year sale and purchase agreement with a subsidiary of Saudi Aramco for LNG from the Rio Grande LNG plant in South Texas.

On March 31, supermajor Chevron Corp. announced a $525 million sale of 70% of its East Texas assets to TG Natural Resources (TGNR), a subsidiary of Japanese utility Tokyo Gas.

Chevron will retain a 30% non-operated stake in the shale gas asset in Panola County, Texas.

JAPEX U.S. Corp. (JUS), the U.S. arm of Japan Petroleum Exploration Co. Ltd., made an equity investment into U.S. E&P Peoria Resources, the companies said last month.

Japanese firm Mitsui spudded a test well earlier this month near the emerging western Haynesville play, adjacent to acreage held by Comstock Resources.

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