Japanese Company Buys U.S. Shale Assets for $1.3 Billion

Japan’s JAPEX has struck a deal to buy shale oil and gas asset owner Verdad Resources Intermediate Holdings for $1.3 billion, Reuters has reported, adding the company will finance the deal with a combination of cash and debt.

Verdad Resources Intermediate Holdings has assets in Wyoming and Colorado, which currently produce at a rate of 35,000 barrels of oil equivalent daily. JAPEX plans to ramp this up to 50,000 barrels daily by 2030, the report said.

The news follows an earlier report about JERA boosting its exposure to U.S. shale oil and gas with a deal to buy $1.5 billion worth of acreage in the Haynesville basin. The Japanese company will buy the assets from Williams and GEP Haynesville II, JERA said in October, adding that the assets currently produce some 500 million cu ft of natural gas daily and feature 200 undeveloped locations. The deal includes a provision to boost output from the assets to 1 billion cu ft daily, JERA also said.

Japanese companies have been stepping up their presence in the U.S. oil and gas space since President Trump took office. Earlier in the year, reports emerged that Japanese companies were considering investments in the $44-billion Alaska LNG project, but so far they have appeared to be concerned that the costs may be too high, considering the cold weather in Alaska and the scale of the pipelines needed to bring the project on stream.

Meanwhile, Japanese energy players have also been closing offtake deals for U.S. liquefied natural gas to boost the supply security of the resource-scarce island nation, which is almost entirely dependent on imports of hydrocarbons. Since the start of the year, LNG purchase commitments have reached a total of 8.5 million tons. Last year, Reuters reported, Japan imported some 66 million tons of liquefied gas in total.

By Charles Kennedy for Oilprice.com