Tokyo Gas’ majority owned unit TG Natural Resources is in advanced deliberations to acquire natural gas producer Rockcliff Energy in a deal worth approximately $4.6bn, including debt, reported Reuters.

US-based Rockcliff Energy will be acquired from private equity firm Quantum Energy Partners.

TG Natural Resources, which is 70% owned by Japan’s Tokyo Gas and 30% owned by Castleton Commodities International (CCI), is expected to sign the all-cash deal this month, sources with knowledge of the development told the publication.

To fund the potential transaction, TG Natural Resources is arranging financing from undisclosed financing sources, including banks and private credit providers.

Despite this, the parties could end the talks without an agreement, the sources noted.

Rockcliff is engaged in developing its assets in the Haynesville shale formation, located in East Texas, US. The firm has a natural gas production capacity of more than one billion cubic feet per day.

With the proposed acquisition, TG Natural Resources’ operations are expected to significantly increase.

As of June 2022, TG Natural Resources has a production capacity of approximately 330 net million cubic feet per day, that is mostly sourced from the Haynesville and Cotton Valley formations in East Texas and Northern Louisiana.

In October 2022, Tokyo Gas agreed to divest its stakes in four liquefied natural gas (LNG) projects in Australia to MidOcean Energy, an LNG company formed and managed by US-based investment firm EIG, for $2.15bn.

The assets covered in the all-cash deal are the Ichthys LNG, the Gorgon LNG, the Pluto LNG, and the Queensland Curtis LNG projects.