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RIL sells stake in US shale gas biz with Carrizo for $126 mn

Transaction expected to close in the third quarter of FY18

Press Trust of India  |  New Delhi 

Reliance Industries, RIL

Industries Ltd on Friday said it has sold one of its three shale gas assets in the US for $126 million, offloading stake in Marcellus, operated by

held stakes in three US shale gas ventures - 45 per cent with Pioneer Natural Resources in the Eagle shale play; 40 per cent with Chevron and 60 per cent with & Gas in the Marcellus Shale play.

Marcellus II, LLC, a subsidiary of Holding USA, Inc and RIL, signed agreements to "divest all of its interest in certain upstream assets in north-eastern and central Pennsylvania", the company said in a statement.

The assets, which are currently operated by & Gas, Inc, were sold to BKV Chelsea, LLC, an affiliate of Kalnin Ventures LLC, for $126 million, subject to customary closing terms and conditions.

Additionally, 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.

The assets produce mainly gas and are located in Susquehanna, Wyoming and Clearfield Counties of

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 7 years with Carrizo in a joint sale."

said it will continue to manage the remainder of its US shale resources.

"Reliance remains invested in the Marcellus shale play via its non-operated position with Chevron in southwestern and in the Eagle 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 2017-18, with an April 1, 2017 effective date.

Citigroup Global Markets, Inc acted as financial advisor to Reliance, Haynes and Boone served as its legal counsel.

First Published: Fri, October 06 2017. 17:26 IST