Banpu acquires second US shale fixture

Banpu has acquired a gas operation position in the Barnett Shale Basin in the US with a transaction value of US$770 million (23 billion baht).

The company reported to the Stock Exchange of Thailand that its subsidiary, Banpu North America Corporation (BNAC), entered into a purchase and sale agreement in Barnett Shale.

The transaction is subject to customary terms and conditions and is expected to be completed in the second quarter of 2020.

The operating site is located in the Fort Worth Basin, Texas, covering over 320,000 total gross acres.

“This is a well-established gas asset with extensive gathering infrastructure across the field,” said Somruedee Chaimongkol, Banpu’s chief executive.

“The asset has been a cornerstone for supplying gas to a key demand centre in the Gulf Coast over the past two decades.

“BNAC will benefit from this gas resource of 89% in more than 4,200 wells with extensive midstream infrastructure.”

She said net production totalled 600 million cubic feet per day (MMCFD) in the third quarter of 2019 and proven reserves stood at 3.5 trillion cubic feet (TCF) as of September.

“Upon successful acquisition, Banpu’s total net gas production is expected to increase from 200MMCFD to 700MMCFD,” said Mrs Somruedee.

The proven reserves have more than tripled to 4.2TCF.”

The Barnett Shale is Banpu’s second deal in US shale after purchasing the Northeast Marcellus natural gas reserves in Pennsylvania during 2016-18.

She said Barnett Shale matches strategically with Banpu’s strategy of going greener and smarter in a bid to expand the company’s footprint in US shale gas.

The asset is mature with relatively low risk and low declining production profiles, which provides not only high immediate free cash flow generation, but also diversifies by moving into the centre of natural gas demand in the US market, said Mrs Somruedee.