Drilling rig in the Haynesville Shale near Greenwood, La. (Source: Hart Energy)
Royal Dutch Shell Plc sold off its last package of Haynesville assets on Dec. 30 as the oil and gas supermajor finalizes its exit from the shale play.
The Anglo-Dutch company had previously sold off a bulk of its Haynesville assets roughly five years ago to Vine Oil & Gas LP and its partner Blackstone for $1.2 billion in cash. Shell’s remaining assets in the Haynesville gas play consisted of a nonoperated position, the company website said.
On Dec. 30, privately backed Castleton Resources LLC said it had closed on the acquisition of the East Texas and North Louisiana Haynesville Shale assets of a Shell subsidiary. Terms of the transaction weren’t disclosed.
According to the company website, the acquisition with Shell increases Castleton’s position in the region by nearly 40%.
Pro forma for the acquisition, Castleton Resources will hold about 222,400 net acres in the region and produce approximately 334 million cubic feet equivalent per day (net), a company release said.
Castleton Resources, owned by Castleton Commodities International LLC (CCI) and Tokyo Gas Co. Ltd., has steadily been building its position of gas assets in the region.
In particular, the company is focused on being a consolidator of E&P assets in the Ark-La-Tex region, which it said on its website has a stacked pay potential rivaling that of the Permian Basin.
Since its formation by global energy commodity merchant CCI in 2014, Castleton Resources has built its portfolio through multiple transactions. The largest of the company’s transactions was its acquisition of Anadarko Petroleum’s Carthage upstream and midstream assets in East Texas for roughly $1 billion in 2016.
Japan-based Tokyo Gas acquired a 30% stake in Castleton Resources from CCI for an undisclosed price in 2017. Concurrent with the transaction on Dec. 30, Tokyo Gas increased its interest in Castleton Resources to about 46%.
Castleton Resources will execute the acquisition from Shell with no increase in ongoing general and administrative expenses, said Craig Jarchow, the company’s president and CEO.
“With the help of our partners, we are well-positioned to continue building a world-class, and relatively low-decline portfolio in the Haynesville and Cotton Valley natural gas and liquids plays,” Jarchow said in a statement.
Moelis & Co. was exclusive financial adviser to Castleton Resources in the transaction. Latham & Watkins LLP was its legal adviser.
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