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RIL sells stake in US Marcellus shale assets to BKV Chelsea for $126 mn

  • RIL sells stake in US Marcellus shale assets to BKV Chelsea for $126 mn

Reliance Industries (RIL) on Friday announced that a subsidiary of its Reliance Holding USA has closed the sale of its upstream Marcellus shale assets in America to BKV Chelsea for $126 million.

The Mukesh Ambani-led RIL said that Reliance Marcellus II has sold its interest in the shale gas assets in northeastern and central Pennsylvania state in the US to BKV Chelsea, an oil and gas affiliate of American investment firm Kalnin Ventures.

The sale transaction of the assets, currently operated by Carrizo Oil and Gas, closed on November 21, an RIL statement said here.

In a transaction announced last month, "Reliance agreed to sell its entire working interest in these upstream assets to BKV Chelsea for purchase consideration of $126 million with an effective date of April 1, 2017," it said.

"Additionally, under the definitive documents, a contingent amount of up to $11.25 million may be paid to Reliance between years 2018 to 2020 based on certain gas price thresholds being achieved," it added.

RIL had bought a 60 per cent stake in the assets for $392 million in 2010. Its operator, the Houston-based Carrizo Oil & Gas has also exited from the investment, Reliance had said.

In 2010, RIL invested in the US shale gas business, which began incurring losses owing to the extended global crude oil price slump. Prior to making a recovery this year, oil prices had earlier fallen by more than 50 per cent in less than two years due to a supply glut, from levels of over $120 a barrel.

In fact, the 13-nation Organization of the Petroleum Exporting Countries (OPEC) cartel is due to meet on November 30 to consider extending production cuts introduced since the start of this year in a bid to lower global inventories and support prices.

 


: November 24, 2017 12:41 pm
Read 1155 times

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