BANPU Invests THB25 Billion in the Acquisition of U.S.-Based XTO Barnett Shale

Banpu Public Company Limited (SET: BANPU) announced on Friday that, on 18th May 2022, BKV Corporation (BKV) its 96.12% subsidiary has signed a Purchase and Sale Agreement (PSA) to acquire natural gas and midstream assets in the Barnett Shale, USA from XTO Energy, Inc. and Barnett Gathering LLC (XTO), subsidiaries of Exxon Mobil Corporation.  

The transaction, valued at USD750 million (equivalent to approximately THB25,125 million), with contingent payments up to USD50 million. This transaction will be funded by the internal cash flow and loan from financial institutions. The transaction is subject to price adjustments, customary terms, and conditions of the PSA, and is expected to close in June 2022. 

This is a scale and low-risk producing asset in the known basin with a 100% owned and operated midstream gathering system and sufficient takeaway capacity to an attractive key gas demand center in the Gulf Coast. Details are as follows;

1) Premier prominent acreage position of approximately 160,000 total net acres in the core of the Barnett Shale with high average working interests of approximately 93% in over 2,100 wells with operatorship position.

2) Extensive integrated gathering and compression of approximately 750 miles of gathering pipelines and over 20 compressor stations with direct access to key markets with ample midstream infrastructure in-place and diversified products of Natural Gas, Natural Gas Liquid (NGL), and condensate. 

3) Net production averaged approximately 225 million cubic feet equivalent per day (MMcfepd), with low decline, ideal in delivering consistent cash flow.  

Upon a successful acquisition, BANPU’s total net gas production and 1P reserves are expected to increase from approximately 700 MMcfepd to 900 MMcfepd and from approximately 4.4 Tcfe to more than 5.8 Tcfe, respectively, with extensive synergies with the existing operation and potential to unlock future projects. 

BKV is the largest gas-weighted producer of natural gas in the Barnett, therefore is a natural basin consolidator for the asset with extensive synergies and technology enhancement with the existing operation.

This acquisition represents a significant milestone in the development of Banpu’s “Greener  Smarter” business in the US. BANPU is committed to accelerate business transformation by expanding greener energy and energy technology portfolio, elevating antifragile strategy of all business groups to deal with the challenge of emerging uncertainty as well as exploring new business opportunities for sustainable growth.