Reliance Marcellus II, LLC, a subsidiary of Reliance Holding USA, Inc. (“Reliance”), and Reliance Industries Limited (“RIL”), announced that it is signing of agreements to divest all of its interest in certain upstream assets in north-eastern and central Pennsylvania.
The assets, which are currently operated by Carrizo Oil & Gas, Inc., were sold to BKV Chelsea, LLC, an affiliate of Kalnin Ventures LLC, for consideration of US$126 million, subject to customary closing terms and conditions.
Additionally, Reliance could receive contingent payments of up to US$11.25 million in aggregate based on natural gas prices exceeding certain thresholds over the next three years. The assets produce mainly gas and are located in Susquehanna, Wyoming and Clearfield Counties of Pennsylvania.
Walter Van de Vijver, President and CEO of Reliance Holding USA, Inc., said: “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.”
The Carrizo operated acreage was one of the three upstream assets in the USA, owned by Reliance. Reliance remains invested in the Marcellus shale play via its non-operated position with Chevron in southwestern Pennsylvania and in the Eagle Ford play via its non-operated position with Pioneer in Texas.
The sale of the assets will be consummated in accordance with the terms of a purchase and sale agreement, dated October 5, 2017, by and between Reliance and the buyer. The transaction is anticipated to close by the end of the third quarter of FY2018, with an April 1, 2017 effective date.