Mitsubishi closes acquisition of Aethon’s Haynesville shale assets

Japan’s Mitsubishi has closed its acquisition of Aethon Energy Management’s assets in the US’ Haynesville shale gas play. The $7.5bn acquisition was announced in January and includes $5.2bn in equity and the assumption of $2.3bn in debt. It also represents Mitsubishi’s largest ever acquisition and positions the Japanese company as one of the largest gas producers in the US.

The transaction includes 100% of the equity interests in the Aethon United and Aethon III units, as well as certain other related operational, production and midstream entities and interests, Aethon said in a July 14 statement. The newly formed Adamas Energy – a standalone operating entity and wholly owned subsidiary of Mitsubishi – will take over operation of the Aethon Fund II and Fund III assets, according to the announcement. Gordon Huddleston will serve as president and CEO of Adamas.

Aethon said it would continue to operate as a private investment firm and owner-operator, with an investment strategy of identifying and developing “asymmetric opportunities in oil and natural gas assets and sustainable energy solutions”. The company reiterated that it intended to acquire a 25% non-operated working interest in the assets sold to Mitsubishi, which it has previously announced.

In addition to this, Aethon indicated it was open to potential commercial opportunities with Mitsubishi through the Global Strategic Alliance established by the two companies in January this year. According to an announcement made at the time, the alliance is aimed at providing a platform for the two companies to explore potential projects in areas including LNG, carbon capture, utilisation and storage (CCUS), geothermal energy, low-carbon natural gas and data centre and digital-infrastructure development, among other initiatives.

Aethon’s Haynesville assets span Texas and Louisiana and include around 380,000 net acres (1,538 square km). Mitsubishi said in January that the assets were producing roughly 2.1bn cubic feet (59.5mn cubic metres) per day of gas, with this figure representing the recent three-year average. The company added that it intended to increase this to 2.6 bcf (73.6 mcm) per day.

The closing of the acquisition comes as part of a wave of investment in US shale by Japanese companies, often with a view to securing feedstock gas for LNG export facilities on the Gulf Coast. Indeed, Mitsubishi is a partner in the Cameron LNG facility in Louisiana via the Japan LNG Investment joint venture with Nippon Yusen Kabushiki Kaisha. The company owns the rights to use the capacity equivalent to one liquefaction train at Cameron and is selling roughly 4mn tonnes per year (tpy) of produced LNG to customers in Japan and elsewhere, according to its website.