Aethon Acquires Natural Gas Company Tellurian’s Assets in $260 Million Agreement
Tellurian and Aethon Energy Management have announced an agreement for Aethon to acquire Tellurian’s integrated upstream assets for $260 million. They have signed a heads of agreement for Aethon to purchase two million tons per annum of liquefied natural gas from Tellurian’s Driftwood LNG plant.
“The expanding scale of our vertically integrated business continues to deliver capital efficiency and industry-leading margins as we work to accelerate the role of natural gas in the broader energy transition,” Aethon Energy CEO Albert Huddleston said. “This Fund II and Fund III acquisition provides complementary growth opportunities alongside our extensive upstream and midstream footprint in the Haynesville with more than 20 years of existing inventory life. Our partnership with Tellurian will provide our downstream LNG customers with the lowest methane emission intensity in North America.”
This acquisition will expand Aethon’s presence in the Louisiana Haynesville and Bossier shale basins, covering approximately 31,000 net acres. The assets include gathering and treating systems with a capacity of up to 100 million cubic feet per day, increasing Aethon’s pro forma gathering and treating capacity to over 3 billion cubic feet per day. The transaction is expected to close in the second quarter of 2024, with Tellurian planning to use the proceeds to reduce borrowings and for general corporate purposes.
“Today’s agreements with Aethon take us several steps closer to developing the Driftwood LNG project, for which Aethon is a vital partner,” Tellurian Executive Chairman Martin Houston said. “The offtake agreement for two [million tons per annum] provides the foundation to accelerate Driftwood and demonstrates that we have successfully aligned our commercial offerings to meet the needs of potential customers. For Tellurian, the proceeds from the sale of our upstream assets allow us to retire senior secured notes and strengthen our balance sheet for the long term. This is an important moment for our company, as Tellurian continues to make progress against our strategic plan.”