Chevron to acquire Atlas Energy for $4.3 billion
09 Nov 2010
US energy giant Chevron Corporation today announced a $4.3 billion deal to acquire natural gas producer Atlas Energy, with which Indian energy major Reliance Industries has a shale gas joint venture.
Chevron would pay Atlas Energy $3.2 billion in cash and assume pro forma net debt of approximately $1.1 billion as per the deal.
The acquisition will provide Chevron with an attractive natural gas resource position primarily located in southwestern Pennsylvania's Marcellus Shale. The acquisition is subject to certain Atlas Energy restructuring transactions, approval by Atlas Energy shareholders and regulatory clearance, Chevron said in a release.
Reliance Industries and Atlas Energy have a joint venture to develop the latter's Marcellus Shale gas assets and the transaction would make Chevron the majority stakeholder in the JV with Reliance.
In April 2010, Atlas Energy entered a joint venture to develop its Marcellus assets with a wholly owned affiliate of Reliance Industries Limited.
Under the deal, Chevron will assume Atlas Energy's role as operator with 60 per cent participation in the Marcellus joint venture, under the original agreement terms between Atlas Energy and Reliance. Reliance will continue to fund 75 per cent of the operator's drilling costs, up to $1.4 billion.
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