RIL acquires majority stake in Carrizo Oil & Gas shale
13 September 2010
Reliance Industries Ltd (RIL) yesterday said that it has completed its deal to acquire a 60-per cent stake in a Marcellus Shale acreage in Central and Northeast Pennsylvania from US-based Carrizo Oil & Gas Inc.
On 5 August, RIL, India's largest private sector oil and gas exploration company made its third shale gas asset acquisition in the US through its US subsidiary Reliance Marcellus II by acquiring the stake in the Marcellus shale acreage from Houston-based Carrizo and ACP II Marcellus LLC, an affiliate of Avista Capital Partners for around $392 million. (See: Reliance in new 60:40 shale gas joint venture in US)
Carrizo also announced on Saturday that it has closed its previously announced joint venture transaction with Reliance Marcellus II.
Under the deal announced last month, RIL will acquire 100 per cent of Avista's interest and 20 per cent of Carrizo's interests in the joint venture and upon completion of the transaction, RIL will own 60 per cent and Carrizo the remaining 40 per cent of a newly-formed joint venture.
The joint venture will have approximately 104,400 net acres of undeveloped leasehold in the core area of the Marcellus Shale in Central and Northeast Pennsylvania, of which RIL's 60 per cent interest will represent approximately 62,600 net acres.
This acreage is expected to support the drilling of around 1,000 wells over the next 10 years, with a net resource potential of about 3.4 Tcfe (trillion cubic feet equivalents). Reliance will have a share of 2.0 Tcfe net in the production. The transaction allows for additional growth in the development acreage, at pre-agreed terms.