Reliance will acquire a 40% interest in Atlas Energy’s core Marcellus Shale acreage position in Pennsylvania, USA, for $1.7bn, under a new joint venture agreement.
Entering a joint venture with Atlas through its subsidiary Reliance Marcellus, Reliance becomes a partner in 300,000 acres of undeveloped leasehold in the core area of the Marcellus Shale.
The acreage is expected to support the drilling of over 3,000 wells with a net resource potential of about 13.3tcfe, which amounts to 5.3tcfe for Reliance.
Reliance is pursuing the unconventional natural gas resource play as it provides low operating costs and proximity to northeast USA gas markets.
Under the joint venture framework, Atlas will continue acquiring leasehold in the Marcellus region and Reliance will have the option to acquire 40% share in all new acreages.
Reliance will also have the right of first offer in potential future sales by Atlas of around 280,000 additional Appalachian acres currently controlled by Atlas, not included in the present joint venture.
The transaction is expected to be completed by the end of April 2010.
