Houston’s Tellurian Inc. just stirred the pot in the Haynesville play after announcing it intends to offer its upstream business for sale including more than 31,000 acres in east Texas and Louisiana.
Could the announcement be inviting to one Oklahoma City energy firm?
The Haynesville is a heavy target of Oklahoma City-based Chesapeake Energy. While it’s not known whether Chesapeake might be interested in expanding its target areas, especially after coming off a merger with Southwestern Energy of Houston, it could be an inviting prospect for the firm. The question is whether Chesapeake might consider such a bid. Or would it be too soon following the merger announcement?
Tellurian’s natural gas assets total 31,149 net acres and interests in 159 producing wells along with more than 400 drilling locations. Tellurian stated it asked its financial advisor, Lazard, to explore opportunities to sell the upstream business.
“As we commercialize Driftwood LNG, Tellurian has been reviewing its strategy, including the dynamics of the U.S. natural gas market in the context of global LNG demand,” explained Chief Executive Officer Octávio Simões.
“We have concluded that there are alternative gas supply strategies available to us from various basins and our ownership of upstream assets is not necessary at this stage of Tellurian’s development.”
He said a sale of the Midstream assets would substantially reduce debt along with general and administrative expenses. It would also provide cash to be used to develop Driftwood LNG.
Tellurian produced 19.5 billion cubic feet (Bcf) of natural gas for the quarter ended September 30, 2023. Tellurian’s natural gas assets include 31,149 net acres, interests in 159 producing wells and over 400 drilling locations.