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Japanese Firm Bets Big on U.S. Shale Boom With $610 Million Deal

Andres Guerra Luz

(Bloomberg) -- Osaka Gas Co. is deepening its bet on the American energy boom, making the first purchase of a U.S. shale gas driller by a Japanese company.

The company will acquire closely held Sabine Oil & Gas Corp., a unit of Sabine Oil & Gas Holdings, for $610 million. That will give Osaka Gas 175,000 net acres of shale-gas-producing land in East Texas, including wells in the Haynesville and Cotton Valley formations.

It owned a 35% working interest in a shale field being developed by Sabine, which emerged from bankruptcy as a private company in August 2016. Osaka Gas also owns a 25% equity stake in the planned Freeport LNG export facility in Texas, according to an April filing from the Japanese company.

The Sabine purchase is Osaka Gas’s biggest purchase, according to data compiled by Bloomberg, surpassing the $532 million it contributed to the purchase of APA GasNet Australia Investment Ltd. that closed in December 2008.

To contact the reporter on this story: Andres Guerra Luz in Houston at aluz8@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Pratish Narayanan, Carlos Caminada

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