RIL gets new partner for Marcellus

Reliance Industries (RIL) today got a new partner for its Marcellus Shale gas assets in the US, as Atlas Energy shareholders approved its merger with Chevron Corporation.

While RIL spokesperson declined to comment, a source close to the company said RIL was keen and interested in the shale gas business. Instead of working with Atlas Energy, it will now work with Chevron, he said.

On January 10, Reliance Holdings USA, an arm of RIL, had written to the Atlas Energy management, questioning why RIL was not informed of the Chevron deal.

RIL was miffed about being kept in dark and displeased with the fact that the valuation of Marcellus shale gas asset for Chevron deal was half of what Reliance paid for its 40 per cent stake.

RIL has a 40 per cent stake in the joint venture with Atlas Energy, which it had formed last April. It had agreed to pay $1.7 billion for the said working interest in the underlying shale asset, Marcellus Shale. This included $340-million upfront cash payment and $1.36-billion drilling carry.

On November 8, 2010, Atlas Energy entered into a definitive agreement to be acquired by Chevron in a transaction valuing Atlas Energy at $4.3 billion.

“The proposal to approve the merger was supported at a special meeting of shareholders by approximately 99.7 per cent of the votes cast by Atlas Energy shareholders. The merger is expected to close promptly,” the company said. Upon closing, Atlas Energy shareholders will receive $38.25 in cash for each outstanding share owned upon the effective time of closing, and will also receive a pro-rata share of a distribution of over 41 million common limited partnership units of Atlas Pipeline Holdings.