RIL divests its US shale gas asset for $126 mn

Reliance Industries Ltd (RIL) has entered into an agreements to sell its entire stakes in the Marcellus Shale Play in north-eastern and central Pennsylvania.

Reliance Industries Ltd (RIL) has entered into an agreements to sell its entire stakes in the Marcellus Shale Play in north-eastern and central Pennsylvania. The Marcellus Shale Play is a subsidiary of Reliance Holding USA, and Reliance Industries Limited that mainly produces gas. Its assets located in Susquehanna, Wyoming and Clearfield Counties of Pennsylvania.

As per the agreements, Marcellus Shale’s assets, currently operated by Carrizo Oil & Gas, will be sold to BKV Chelsea, an affiliate of Kalnin Ventures, for US $126 million. 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. This sell-off will end Reliance 7-year a partnership with Carrizo, which operated one of Reliance’s three upstream assets in the USA.  "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. We will continue to actively manage the remainder of our US shale resources," said Walter Van de Vijver, President and CEO of Reliance Holding USA, Inc. The entire disinvestment process will be over by the end of the third quarter of FY2018.