Reliance Industries has decided to sell its Marcellus shale assets of its subsidiary to Northern Oil and Gas Inc. The company will divest all of its interest in certain upstream assets in the Marcellus shale play of south-western Pennsylvania.
The assets, which are currently operated by various affiliates of EQT Corporation (“EQT"), have
been agreed to be sold to the Delaware corporation, for a consideration of $250 million cash and warrants that give entitlement to purchase 3.25 million common shares of NOG at an exercise price of $14.00 per common share in next seven years.
RIL has said that the purchase and sale agreement was signed between Reliance Marcellus and NOG on February 3, wherein the transaction is subjected to customary closing conditions. RIL had in 2017 sold first of its shale gas ventures—upstream Marcellus shale gas assets in northeastern and central Pennsylvania in the US—for $126 million.
The assets held by Reliance Marcellus II LLC, a unit of Reliance Holding USA Inc. and RIL, were sold to BKV Chelsea LLC, an affiliate of Kalnin Ventures LLC. It is currently operated by Carrizo Oil & Gas, Inc.
In 2010, RIL had bought a 60 per cent stake in the assets for $392 million. Till 2014, RIL had been bullish on the shale gas segment, however, the drop in crude oil prices since late 2014 hit the valuations of oil and gas assets.
