A pair of shale deals by Japanese companies in the Lone Star State announced days apart point to a growing return by Pacific Rim investors to U.S. shale.
On July 5, Japan’s Sumitomo Corp. said it purchased a tight oil producing asset in the core of the Eagle Ford Shale from IOG Capital LP, Covington Equity Investments LLC and 1836 Resources LLC. The asset includes 100% interest in 624 acres in Karnes County, Texas, where peak production is estimated at 3,000 boe/d.
Sumitomo expects the acquisition to cost less than $50 million, said a spokeswoman for the Japanese trading house, according to a Reuters report. The deal followed the June 29 announcement by another Japanese company—Osaka Gas Co. Ltd.—for the acquisition of East Texas shale gas assets targeting the Cotton Valley Sand and Haynesville Shale formations from Sabine Oil & Gas Corp.