Tellurian Inc. wrapped up its acquisition of natural gas assets located in the Haynesville Shale from privately held EnSight Energy Partners LP on Aug. 18 for $125.5 million in cash.

“This closing represents significant progress for Tellurian and our business model,” commented Tellurian President and CEO Octávio Simões in a company release.

A subsidiary of the Houston-based LNG developer, Tellurian Production LLC, had entered the previously announced agreement in July to pay up to $132.5 million to purchase the natural gas assets from EnSight IV Energy Partners LLC and EnSight Haynesville Partners LLC. The cash consideration at closing was $125.5 million, revised from the announced $125 million due to preliminary purchase price adjustments, the release on Aug. 18 said.

The EnSight acquisition is part of Tellurian’s strategy to acquire develop, and manage natural gas assets to supply long-term, low-cost production to its cornerstone project, Driftwood LNG. The proposed liquefaction export facility located near Lake Charles, Louisiana, is expected to have a capacity of 27.6 million tonnes per year.

”By owning and operating upstream assets, a pipeline network and the Driftwood LNG terminal, Tellurian will have the ability to sell natural gas into domestic or international markets,” Simões explained.

The EnSight assets comprise about 5,000 net acres, roughly 45 MMcf/d (100% natural gas) of current net production and 30 gross drilling locations. Proved reserves are approximately 108 Bcf of natural gas. The assets also include 44 producing wells and five wells in progress at transaction close, anticipated in the third quarter.

The assets, which Simões added represent a ”compelling value for our shareholders,” are located in the core of the Haynesville Shale in DeSoto, Bossier, Caddo and Webster parishes in Louisiana. Tellurian funded the acquisition with cash on hand.

At closing, Tellurian Production’s Haynesville Shale acreage will increase to roughly 20,000 net acres, with more than 275 gross drilling locations. The company’s net resource is expected at over 2 Tcf.

“The EnSight acquisition is an excellent strategic and operational fit for Tellurian,” commented John Howie, president of Tellurian Production. “The combination of our existing assets with this acquisition results in an acreage position of more than 20,000 acres and an inventory of more than 275 high return, de-risked drilling locations, most of which we can drill opportunistically for incremental free cash flow.”

The effective date of the EnSight transaction is Aug. 1. The purchase price is $125.5 million and a contingent payment of $7.5 million which is based on the price of natural gas and may be payable in March 2023 under certain conditions.

With the closing of the EnSight acquisition, Tellurian Production has current production of approximately 150 MMcf/d from assets in the Haynesville basin, according to the company release.

In addition, Tellurian Production operates 11 wells currently being drilled or completed, all of which the company expects to turn to sales before the end of the year. These new wells are expected to increase Tellurian’s production rate to approximately 250 MMcf/d.

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