Tokyo Gas to Buy 25% Stake in US Shale Gas Field

Tokyo Gas is likely to buy 25 percent stake in an American shale gas field as early as this month, according to Nikkei.

The Japanese firm will purchase the interest in an Eagle Ford shale development from a US company for more than 5 billion yen ($48 million). Production has already commenced at the field, Nikkei added.

Low energy prices give Tokyo Gas an opportunity to buy the asset at a bargain.  The price is about one tenth of what Tokyo Gas spent in 2013 to acquire an interest in another Texas shale gas field, the Barnett basin.

There is already significant Japanese presence in the US shale sector. In August 2012, Japex had bought a 5 percent working interest  in two shale oil acreages in Eagle Ford shale play. The company bought an additional 50 percent stake in 2013.

Also in 2012, Marubeni Corporation entered into an agreement with Dallas based Hunt Oil Company to acquire a 35 percent working interest in the Eagle Ford shale oil and gas acreage. Mitsui & Co. also invested in Eagle Ford during the 2011-12 period.

However, in the past couple of years Japanese firms have held back investment amid falling energy prices. With predictions that prices have formed a bottom, interest in energy assets may gradually revive.