Reliance Industries to sell part of Eagle Ford shale assets for $100 million
The sale involves certain acreage, producing wells and related assets in the western portion of its Eagle Ford shale position, says Reliance Industries
Mumbai: Reliance Industries Ltd (RIL) Tuesday said it has agreed to sell some of its assets in Eagle Ford shale position in the US to Sundance Energy Inc. for $100 million.
The sale involves “certain acreage, producing wells and related assets in the western portion of its Eagle Ford shale position”, an RIL note said.
Reliance will continue to retain its interest in the remaining Eagle Ford assets.
The assets are located in Atascosa, La Salle, Live Oak and McMullen Counties, Texas and are not part of near-term development plan of the joint development. “This transaction is in conjunction with sales made by Pioneer Natural Resources USA Inc. and Newpek LLC, the other working interest owners in the joint development with Reliance. The sale is expected to close in 1QFY19 and is subject to customary closing conditions,” RIL said.
Between 2010 and 2013, RIL bought stakes in three upstream oil exploration joint ventures with Chevron, Pioneer Natural Resource, and Carrizo Oil and Gas; and a midstream joint venture with Pioneer. Midstream refers to the processing, storing, transporting and marketing of hydrocarbons. Aggregate investments since the inception of these ventures were $8.2 billion till 2016.
In June 2015, the firm sold its Eagle Ford (EFS) midstream joint venture with Pioneer Natural Resources in the US, realizing $1 billion from the sale. RIL had spent $46 million in acquiring the 49.9% stake in EFS and invested another $208 million over the years.
Till 2014, RIL had been bullish on shale gas; however, the drop in crude oil prices since late 2014 hit the valuations of oil and gas assets. Shale gas blocks have suffered far more than conventional oil and gas blocks as they are economically viable only when prices cross a certain limit.
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