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Tokyo Gas buying majority share of Castleton Resources
Posted on Wednesday, 29 July 2020 13:48
Tokyo Gas has signed on the dotted line to pick up a majority shareholding in Castleton Resources, a Texas-headquartered provider of oil and gas exploration services.

No financial details of the transaction have been disclosed, but Reuters reported that the buyer will pay JPY 20.00 billion (USD 190.20 million) for the stake.

As a consequence, its ownership of the business will increase from the current level of 46.0 per cent to around 70.0 per cent.

Completion is slated to follow on 14th August, with Castleton to be renamed TG Natural Resources by the end of March 2021.

The target’s production volume of gas and natural gas liquid will increase from about 296.00 million cubic feet per day to 473.00 million cubic feet per day as a result of the purchase.

Via its ownership in Castleton, Tokyo Gas subsequently intends to buy more oil and gas assets in Louisiana.

The target’s chief executive, Craig Jarchow, said the move puts the firm in a good position to build a world-class portfolio of natural gas assets.

Tokyo Gas first invested in Castleton in May 2017, injecting an undisclosed sum into the business in exchange for a 30.0 per cent shareholding.

At present, the remaining 54.0 per cent stake of the business is owned by Castleton Commodities International.

There have been 372 deals worth a combined USD 66.03 billion targeting oil and gas extraction companies announced worldwide since the beginning of 2020, compared to the 729 valued at an aggregate USD 125.23 billion signed off over the corresponding timeframe of last year, according to Zephyr, the M&A database published by Bureau van Dijk.

If Tokyo Gas’ investment in Castleton goes ahead at the reported value of JPY 20.00 billion, it would be the 33rd-largest deal targeting a company in the industry to have been announced so far this year.

© Zephus Ltd