Castleton to acquire upstream assets from Range Resources

US-based Castleton Resources has signed a definitive agreement to acquire the Terryville upstream assets in Northern Louisiana from subsidiaries of Range Resources.

The deal is valued at roughly $245m plus additional proceeds contingent on future commodity prices.

As part of the Terryville acquisition, Castleton Resources will own more than 315,000 net acres of leasehold in East Texas and Northern Louisiana, which have a total daily net production of around 500 million cubic feet equivalent per day (MMcfed).

Castleton Resources is owned by Castleton Commodities International (CCI) and Tokyo Gas subsidiary Tokyo Gas America.

Upon completion of the acquisition, Tokyo Gas America will increase its stake in Castleton Resources from 46% to nearly 70%, while the remaining ownership will be held by CCI.

Castleton Resources president and CEO Craig Jarchow said: “We are very pleased to be able to purchase quality assets at a low-point in the commodity-price cycle. The company is well-positioned to enhance the value of these assets through further operational enhancements, among other activities.

“We remain focused on strategically growing and diversifying our upstream and midstream assets, and broadening our portfolio with attractive opportunities that complement our long-term business strategy.”

The transaction is expected to be closed on 14 August this year.

Tokyo Gas America president and CEO Kazuya Kurimoto said: “Tokyo Gas America participated in Castleton Resources in May 2017, and has grown steadily with Castleton Resources by acquiring shale and tight sand assets since then.

Castleton Resources will be renamed ‘TG Natural Resources LLC’ by March next year.

Greenhill has been appointed as M&A advisor, while Kirkland & Ellis acted as legal advisor to Castleton Resources for the transaction.