Reliance Industries Limited (RIL) has decided to exit all of its interest in certain upstream assets in north-eastern and central Pennsylvania.
The assets, currently operated by Carrizo Oil & Gas, Inc., were sold to BKV Chelsea, LLC, an affiliate of Kalnin Ventures LLC, for a consideration of $126 million, subject to customary closing terms and conditions, said a company statement.
It added that Reliance could receive contingent payments of up to $11.25 million in aggregate, based on natural gas prices exceeding certain thresholds over the next three years.
‘Other shale resources’
Commenting on the deal, Walter Van de Vijver, president and CEO of Reliance Holding USA, Inc. said, “This transaction represents an opportunistic sale of developed upstream Marcellus assets and ends a successful partnership of seven years with Carrizo in a joint sale. We will continue to actively manage the remainder of our U.S. shale resources.”
The assets produce mainly gas and are located in Susquehanna, Wyoming and Clearfield counties of Pennsylvania. The Carrizo-operated acreage was one of the three upstream assets in the U.S., owned by Reliance. Reliance remains invested in the Marcellus shale play via its non-operated position with Chevron in southwestern Pennsylvania and in the Eagle Ford play via its non-operated position with Pioneer in Texas, the statement said.
“The transaction is anticipated to close by the end of the third quarter of FY2018, with an April 1, 2017 effective date,” said the statement.
Citigroup Global Markets Inc. acted as financial advisor to Reliance while Haynes and Boone served as its legal counsel.
On the BSE, RIL shares climbed 1.53% to ₹836.85 in a firm Mumbai market on Friday.
