Tokyo Gas Buys 70% of Chevron's Haynesville Natural Gas Assets

The comany will likely export this natural gas to Japan through one of the LNG facilities in south Louisiana, such as Chenier.

Chenier LNG export facility in Louisiana

My Substack post yesterday, titled U.S. LNG Exports Are Soaring, Possibly Reviving Old Shale Plays, discussed the high probability that the surge in U.S. LNG sales has a good chance of reinvigorating the Haynesville Shale and perhaps even the Barnett Shale. This morning, OilPrice published an article titled “Tokyo Gas Buys 70% in Chevron’s Haynesville Natural Gas Assets.” The company buying those assets is TG Natural Resources, which is indirectly owned by Japan’s Tokyo Gas and Castleton Commodities International, expanding the Haynesville natural gas reserves it already owns.

Tokyo Gas Buys 70% in Chevron’s Haynesville Natural Gas Assets

ByTsvetana Paraskova- Apr 01, 2025, 5:30 AM CDT

TG Natural Resources has agreed to buy 70% of Chevron’s natural gas assets in East Texas for $525 million, as the company indirectly owned by Japan’s Tokyo Gas and Castleton Commodities International expands its footprint in the Haynesville shale gas play.

Of the $525 million price of the deal, TG Natural Resources (TGNR) is paying $75 million in cash, while the remainder $450 million would be paid as a capital carry to fund Haynesville development, prior to customary adjustments, TG Natural Resources said in a statement.

The transaction will add more than 250 gross locations to TGNR’s existing inventory in the Haynesville shale play, assuming four wells per section. These will extend TGNR’s inventory life beyond 20 years at the current development pace, not counting the Bossier and Cotton Valley plays which are commercial at current prices, the company said.

The Haynesville acreage in this transaction is relatively undrilled and held by shallower production, allowing parent-child effects between wells to be mitigated, TGNR added.

“There is considerable operational overlap between the Chevron acreage and the legacy TGNR acreage, which will allow TGNR to realize synergies of over $170 million during the development of the asset,” TGNR’s chief executive Craig Jarchow said in the press release.

TGNR, one of the largest producers in the Ark-La-Tex region of East Texas and Northern Louisiana, could benefit from additional development in Haynesville, which is expected to thrive in the coming years with the Trump Administration’s agenda to boost U.S. LNG exports.

The recent rise in U.S. natural gas prices is also expected to incentivize higher gas production.

The benchmark U.S. natural gas price at Henry Hub has more than doubled in one year—from $1.83 per million British thermal units (MMBtu) at this time in 2024 to over $4 per MMBtu this week.

“With rising gas prices, the time has come for the Haynesville,” Murray Auchincloss, chief executive of supermajor BP, said at the CERAWeek conference in Houston last month.

Reuters also reported that this purchase expanded the natural gas reserves of TG Natural Resources in the Haynesville Shale, which was already the fourth largest producer in that basin. The company said its interest in purchasing more natural gas reserves increased after Donald Trump was elected president, who pledged to boost LNG exports. The Reuters article said:

TGNR is already the fourth biggest producer in the Haynesville shale basin and the deal would allow it to reap synergies of over $170 million during the asset's development, Craig Jarchow, the company's chief executive, said in a statement.

Haynesville's location in east Texas and northwest Louisiana is ideal for exports from liquefied natural gas (LNG) facilities and projects clustered on the nearby Gulf Coast, and has investors' attention as U.S. President Donald Trump aims to boost gas exports.

Yoshihisa Yamada, senior general manager at Tokyo Gas, told reporters on Tuesday that the new investment had been under consideration since before Trump's return to the office, but that the deal is in line with both countries' common aim to strengthen energy security by boosting LNG supplies from the U.S. to Japan.

My Take

Foreign-based energy companies have been buying U.S. oil and gas reserves for decades. Tokyo Gas Co., Ltd was the first non-U.S. company to buy into the Barnett Shale when it acquired a 25% interest in Quicksilver Resources, Inc., in 2013 for $485 million. It had been founded and operated by a well-known family in Fort Worth, Texas, and the locals were shocked to learn that a foreign company had bought Barnett Shale natural gas reserves. Tokyo Gas said at the time that it was acquiring U.S. natural gas resources to export it as LNG back to Japan.

Since then, several Japanese companies, including Osaka, Mitsui & Co., and Mitsubishi Corp, have acquired oil and gas reserves in the Haynesville. Other foreign companies, including BP, Shell (Netherlands/UK), TotalEnergies, and Equinor (a Norwegian company), also own natural gas reserves in the Haynesville.

We may see more foreign-based entities, perhaps from Southeast Asia and India, buy U.S. crude oil and natural gas reserves through U.S.-based subsidiaries to export LNG back to their home countries. Such ownership is legal under current U.S. Laws.

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