Kimmeridge-Mubadala JV to Acquire SM Galvan Ranch in Texas

Why It Matters

The deal expands Caturus’ gas footprint, enhancing U.S. LNG feedstock supply, while strengthening SM Energy’s financial position.

Key Takeaways

• Caturus acquires Galvan Ranch for $950 million.
• Production jumps to ~950 MMcfed after acquisition.
• Caturus now controls 275,000 net acres Gulf Coast.
• Assets support low‑nitrogen gas to Gillis, Agua Dulce LNG.
• SM Energy uses proceeds to reduce debt, improve capital structure.

Pulse Analysis

The $950 million purchase of SM Energy’s Galvan Ranch marks Mubadala’s first major U.S. upstream foothold and solidifies Kimmeridge’s partnership through the Caturus JV. By adding 260 producing wells and roughly 250 MMcfed of gas, Caturus lifts its pro‑forma output to about 950 MMcfed, positioning the company among the largest independent gas producers in North America. The deal also expands its land base to more than 275,000 net acres across the Eagle Ford and Austin Chalk, giving it a sizable, low‑cost inventory that can be developed over the next decade.

Caturus’ expanded acreage and infrastructure give it a unique advantage in feeding low‑nitrogen natural gas to key LNG export terminals such as Gillis and Agua Dulce. The proximity of the Galvan Ranch assets to the planned Commonwealth LNG project, slated for 2030 operation, creates a vertically integrated supply chain that can meet the growing demand for clean‑fuel exports. With Commonwealth LNG projected to generate $3.5 billion in annual revenue, the combined portfolio strengthens Caturus’ ability to lock in long‑term contracts and capture premium pricing on the global market.

For SM Energy, the Galvan Ranch divestiture is a cornerstone of its $1 billion‑plus asset‑sale program aimed at deleveraging the balance sheet. Proceeds will be directed toward debt reduction and funding a refreshed return‑of‑capital plan, which should improve earnings per share and free cash flow in upcoming quarters. The transaction also signals a broader industry trend where capital‑intensive upstream operators are pruning non‑core assets to focus on higher‑margin, lower‑cost plays, while sovereign investors like Mubadala accelerate their exposure to North American gas markets.

Kimmeridge-Mubadala JV to Acquire SM Galvan Ranch in Texas

By Jov Onsat · Rigzone Staff · Thursday, February 19, 2026 · 6:57 AM EST

Image by Jacob Wackerhausen via iStock

The $950‑million acquisition involves a production of about 250 million cubic feet equivalent a day.

Mubadala Investment Co and Kimmeridge Energy Management Co LLC’s joint venture signed a deal to buy SM Energy Co’s Galvan Ranch assets in South Texas for $950 million, the parties said Wednesday.

The assets had a production of about 250 MMcfed from 260 producing wells as of December, Caturus HoldCo LLC, the JV, said in an online statement. Caturus projects a total pro‑forma net production of around 950 MMcfed upon the completion of the transaction, expected to be in the second quarter.

Galvan Ranch includes “approximately 60,000 high‑quality net acres,” Houston‑based Caturus said. “With Caturus’ acquisition of the Galvan Ranch assets, the company will hold more than 275,000 net acres across the Gulf Coast, and more than 15 years of premium inventory sitting at the front‑end of the North American cost curve,” it added.

“The combination of these assets, along with Caturus’ recent entry into the Haynesville through a development agreement with Black Stone Minerals, makes the company uniquely positioned to deliver low‑nitrogen natural gas to key LNG hubs at Gillis and Agua Dulce.”

Caturus chief executive David Lawler said, “Galvan Ranch significantly expands our footprint in the Eagle Ford and Austin Chalk and comes with existing infrastructure that supports long‑term, capital‑efficient development.”

“Adjacent to Caturus’ westernmost operations, the assets, including a largely contiguous position in the Webb County Core, offer more than a decade of high‑quality drilling inventory across both the wet and dry gas windows, with additional upside beyond that horizon,” Lawler added.

Beth McDonald, president and CEO of Denver‑based SM Energy, said in a separate press release, “This timely asset sale largely accomplishes one of our key priorities of selling more than $1.0 billion in assets, which will enable us to reduce debt and strengthen our capital structure.”

“We are excited about the impact this divestiture has on our balance sheet and look forward to sharing our updated return‑of‑capital program when we report earnings next week,” McDonald added.

Caturus said the acquisition helps it “fulfill its wellhead‑to‑water strategy as the leading fully integrated natural gas producer in North America, delivering reliable, high‑quality U.S. natural gas to domestic and global markets via LNG.”

Caturus launched last year as a rebranding of Kimmeridge’s SoTex HoldCo LLC following Mubadala’s acquisition of a 24.1 percent stake in SoTex. Mubadala’s acquisition marked its entry into the United States, according to the Emirati sovereign investor.

Currently Caturus’ business consists of an unconventional gas position in the Eagle Ford in South Texas, previously held via Kimmeridge Texas Gas, and Commonwealth LNG.

Expected to start operation in 2030, Commonwealth LNG is permitted to ship up to 9.5 million metric tons a year of LNG, equivalent to around 1.21 billion cubic feet per day of gas. The United States Energy Department granted the project authorization to export to countries without a free‑trade agreement (FTA) with the U.S. in August 2025 and FTA authorization in April 2020.

Caturus expects the first phase of the project to generate around $3.5 billion in annual export revenue.

On December 22, 2025, Baker Hughes Co. said it had received a “full notice to proceed” from Technip Energies to supply primary liquefaction equipment for Commonwealth LNG.

Caturus said it then expects to make a final investment decision on Commonwealth LNG in the first quarter of 2026.

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