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Rediff.com  » Business » RIL looks at third shale gas deal in America

RIL looks at third shale gas deal in America

By BS Reporter
July 14, 2010 03:04 IST
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Reliance Industries (RIL) is looking at yet another shale gas acquisition in North America, its third in three months. The transaction is said to be in line with RIL's recent acquisition of a 45 per cent stake in Eagle Ford shale acreage of Pioneer Natural Resources. Sources in the company confirmed the development. But a company spokesperson said, "The company does not comment on market speculation."

RIL shares closed 1.80 per cent up at Rs 1,074.75, after touching an intraday high of Rs 1,076.45, on the Bombay Stock Exchange.  In April, RIL had picked up a 40 per cent stake in Atlas Energy's Marcellus Shale acreage for $1.7 billion, committing a capital expenditure of $3.5 billion over 10 years.

For RIL, Marcellus is a strategic investment, as it is one of the most economically attractive unconventional natural gas resource plays in North America, due to low operating costs and proximity to the north-east gas markets in the US.

RIL picked up a 45 per cent stake in Pioneer Natural Resources' Eagle Ford shale acreage for $1.3 billion in June. The deal was done through Reliance Eagle Upstream, an arm of RIL. Pioneer owns 46 per cent, while Newpeck holds nine per cent. Reliance had agreed to make an upfront payment of $266 million in cash and contribute another $879 million towards Pioneer's share of future drilling costs in the next four to six years. 

For the year ended March 31, 2010, RIL had cash and cash equivalents of Rs 21,874 crore in fixed deposits, certificate of deposits with banks and government securities and bonds.

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BS Reporter in Mumbai
Source: source
 

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