<p>On August 5, Reliance had announced that it will buy its third shale gas asset in the United States. Its subsidiary, Reliance Marcellus II Llc, had signed a definitive transaction agreement to enter into a Marcellus Shale joint venture with US-based Carrizo.<br /><br />In a statement issued yesterday, Carrizo Oil and Gas said that it has "closed its previously announced joint venture transaction in the Marcellous Shale with a subsidiary of Reliance Industries".<br /><br />The joint venture agreement is effective immediately, the statement added. "The new Carrizo-Reliance joint venture agreement covers approximately 1,04,400 gross acres in Northern and Central Pennsylvania. Under the terms of the agreement, Carrizo retains a 40 per cent working interest in the acreage and Reliance owns 60 per cent," the statement said.<br /><br />Carrizo will continue as operator of the acreage, with Reliance having the right to assume operations in certain parts of Central Pennsylvania after a year, it added.<br /><br />Under the agreement, Reliance paid USD 340 million in cash to acquire a 60 per cent stake in the Marcellus shale gas acreage held by Carrizo Oil and Gas Inc and its partner.<br /><br />The remaining USD 52 million would be incurred on bearing Carrizo's future seismic survey and drilling costs in the Marcellus shale gas area.<br /><br />The Marcellus shale acreage was earlier held by a 50:50 joint venture between Carrizo and ACP II Marcellus LLC, an affiliate of Avista Capital Partners.<br /><br />Reliance has acquired 100 per cent of Avista's interest in the JV for approximately USD 327 million and 20 per cent of Carrizo's interests for a purchase price of USD 65 million.<br /><br />In April, the Mumbai-based firm had bought a 40 per cent stake in Atlas Energy Inc's Marcellus Shale acreage for USD 1.7 billion. In June, it had agreed to buy a 45 per cent stake in Pioneer Natural Resources Co's Eagle Ford shale gas asset in Texas for about USD 1.36 billion.<br /><br />Reliance would have a net share of 62,600 acres in Carrizo's shale acreage, less than its 137,000 acre holding in the Atlas venture and 118,000 acres in Pioneer's assets.<br /><br />The gross resource potential in Carrizo's Marcellus Shale area is 3.4 trillion cubic feet of gas, compared to 10 trillion cubic feet in Pioneer's Eagle Ford asset. <br /><br /></p>
<p>On August 5, Reliance had announced that it will buy its third shale gas asset in the United States. Its subsidiary, Reliance Marcellus II Llc, had signed a definitive transaction agreement to enter into a Marcellus Shale joint venture with US-based Carrizo.<br /><br />In a statement issued yesterday, Carrizo Oil and Gas said that it has "closed its previously announced joint venture transaction in the Marcellous Shale with a subsidiary of Reliance Industries".<br /><br />The joint venture agreement is effective immediately, the statement added. "The new Carrizo-Reliance joint venture agreement covers approximately 1,04,400 gross acres in Northern and Central Pennsylvania. Under the terms of the agreement, Carrizo retains a 40 per cent working interest in the acreage and Reliance owns 60 per cent," the statement said.<br /><br />Carrizo will continue as operator of the acreage, with Reliance having the right to assume operations in certain parts of Central Pennsylvania after a year, it added.<br /><br />Under the agreement, Reliance paid USD 340 million in cash to acquire a 60 per cent stake in the Marcellus shale gas acreage held by Carrizo Oil and Gas Inc and its partner.<br /><br />The remaining USD 52 million would be incurred on bearing Carrizo's future seismic survey and drilling costs in the Marcellus shale gas area.<br /><br />The Marcellus shale acreage was earlier held by a 50:50 joint venture between Carrizo and ACP II Marcellus LLC, an affiliate of Avista Capital Partners.<br /><br />Reliance has acquired 100 per cent of Avista's interest in the JV for approximately USD 327 million and 20 per cent of Carrizo's interests for a purchase price of USD 65 million.<br /><br />In April, the Mumbai-based firm had bought a 40 per cent stake in Atlas Energy Inc's Marcellus Shale acreage for USD 1.7 billion. In June, it had agreed to buy a 45 per cent stake in Pioneer Natural Resources Co's Eagle Ford shale gas asset in Texas for about USD 1.36 billion.<br /><br />Reliance would have a net share of 62,600 acres in Carrizo's shale acreage, less than its 137,000 acre holding in the Atlas venture and 118,000 acres in Pioneer's assets.<br /><br />The gross resource potential in Carrizo's Marcellus Shale area is 3.4 trillion cubic feet of gas, compared to 10 trillion cubic feet in Pioneer's Eagle Ford asset. <br /><br /></p>