Reliance 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 Carrizo.
RIL held stakes in three US shale gas ventures - 45 per cent with Pioneer Natural Resources in the Eagle Ford shale play; 40 per cent with Chevron and 60 per cent with Carrizo Oil & Gas in the Marcellus Shale play.
Reliance Marcellus II, LLC, a subsidiary of Reliance 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 Carrizo Oil & 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 Pennsylvania.
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."
RIL 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 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 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.