BANPU Invests ฿23bn to Take US’ Barnett Shale, Hiking Gas Production over 3 Folds!

Banpu Public Company Limited (BANPU) has announced that its affiliate, Banpu North America Corporation (BNAC), has entered into a Purchase and Sale Agreement (PSA) to acquire a gas operatorship position in the Barnett shale, USA. The transaction is valued at $770 million (equivalent to approximately Baht 23 billion).

The transaction is expected to complete in the second quarter of 2020. The asset is located in Barnett shale play, Fort Worth Basin, Texas. This is a well-established gas asset with extensive gathering infrastructure across the field. The asset has been a cornerstone for supplying the gas to a key gas demand center in the Gulf Coast over the past two decades.

 

Barnett shale is a premier large acreage position of over 320,000 total gross acres in the core of the Barnett Shale with high average working interests of approximately 89% in more than 4,200 wells with operatorship position, with extensive midstream infrastructure in-place. Its net production averaged approximately 600 million cubic feet per day (Mmcfd) in the third quarter of 2019, and 1P reserves of approximately 3.5 trillion cubic feet (Tcf) as of 1 September 2019 based on Devon Energy Corporation (seller) disclosure.

 

Upon a successful acquisition, Banpu’s total net gas production is expected to increase from current of approximately 200 Mmcfd to 700 Mmcfd and 1P reserves increase more than triple to 4.2 Tcf.

The acquisition in Barnett shale strategically fits with BANPU’s strategy of greener & smarter aspiration and our ambition to expanding the company’s footprint in the US shale gas. The asset is matured with relatively low-risk and low-decline production profiles, which provide not only a high immediate free cash flow generation, potential synergies around technology transfer with BANPU existing portfolio but also diversification benefit into the epicenter of natural gas demand growth in the US.