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| Edited By: Our Bureau |Source: DNA |Updated: Mar 17, 2018, 04:26 AM IST
Reliance Industries (RIL) is expected to announce a $1.35 billion shale gas acquisition in the US, its second in three months, as early as today.
According to media reports and officials close to the company, RIL will acquire a 45% stake in Pioneer Natural Resources Company’s Eagle Ford shale acreage in Texas.
The acquisition, if confirmed, will come just two months after RIL announced its entry into the lucrative, if emerging, unconventional gas sector in the US.
In April, the company said it will pay $1.7 billion to US-based Atlas Energy to form a joint venture and own a 40% stake in Atlas’ Marcellus Shale operations in the eastern United States, giving it around 120,000 acres in net holding.
The latest deal will be similarly structured and will involve an upfront payment of around $270 million, NW18 said.
The remaining payment would be in the form of drilling expenditure.
According to the Financial Times of London, RIL is represented by Barclays Plc and Swiss bank UBS, while Pioneer is being advised by Bank of America Merrill Lynch. The newspaper said on its website that the deal would be announced after the close of business in New York on Tuesday (Wednesday morning in India).
RIL, the largest Indian company by market capitalisation, neither confirmed nor denied the rumoured deal.
Reuters first reported the likelihood of RIL buying a stake in Pioneer’s shale gas assets earlier this month.
Pioneer had said in a presentation to investors earlier this month that it is looking at bringing in joint venture partners to expedite the development of Eagle Ford Shale. It also said it was evaluating bids received from several companies that were given access to the data room for Eagle Ford Shale. An announcement on the deal was likely by the end of June, it had said.
Pioneer said in the presentation that it has chalked out plans to aggressively drill the shale resources and will deploy 6-7 rigs in these fields by December and raise the number to 10 in 2011 and 14 in 2012.
