Tellurian Inc. and Aethon Energy Management LLC announced on Wednesday morning that Aethon will acquire Tellurian’s integrated upstream assets for $260 million.
The acquisition also includes a proposal for Aethon to purchase 2 million tons per annum of liquefied natural gas from Tellurian’s Driftwood LNG plant, which has struggled to find the financial backing to move forward.
The assets will expand Aethon’s footprint in the Louisiana Haynesville and Bossier shale basins with approximately 31,000 net acres.
The heads of agreement proposes the parties negotiate a 20-year offtake agreement that would be indexed to Henry Hub plus a liquefaction fee, with appropriate credit support, to provide the basis for project financing of Driftwood LNG. Aethon is expected to explore additional opportunities to bring value to Driftwood LNG following the transaction.
The transaction is expected to close during the second quarter of 2024. Tellurian executives say they will use the proceeds to reduce borrowings and for general corporate purposes.
