Reliance Industries, the leading Indian natural gas producer in the ultra-deep-water block in the Krishna Godavari Basin offshore the East Coast to supply about 15 percent of the nation’s domestic gas needs and slightly reduce LNG import requirements, has sold off its assets in the US Marcellus Shale in Pennsylvania.
The Reliance subsidiary, Marcellus LLC, said it signed agreements to divest all of its interest in certain upstream assets in the Marcellus shale play of southwest Pennsylvania.
“These assets, which are currently operated by various affiliates of EQT Corp, will be sold to Northern Oil and Gas Inc., a Delaware corporation, for $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 the next seven years,” said Reliance.
A Purchase and Sale Agreement has been signed with Northern Oil and Gas and the transaction is subject to customary terms and conditions of closing.
Reliance said Citigroup Global Markets acted as its financial advisor and Gibson, Dunn & Crutcher LLP served as its legal counsel.
Reliance is India’s largest private sector company with annual turnover of $87.1 billion.
The conglomerate’s activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services.
Reliance, along with BP of the UK, is developing three deepwater gas projects in block KG D6, called the R Cluster field, the Satellites Cluster field and the MJ field.
The three fields in the project will utilise the existing hub infrastructure in KG D6 block, with BP holding over 33 percent and Reliance, as the operator of KG D6, owning the balance.
The R Cluster was the first of the three fields to come onstream.
It is located about 60 kilometres from the existing KG D6 Control and Riser Platform (CRP) off the Kakinada coast and comprises a subsea production system tied back to CRP via a subsea pipeline.
Located at a water depth of greater than 2,000 metres, it is the deepest offshore gas field in Asia.
The field is expected to reach plateau gas production of about 12.9 million standard cubic metres per day in 2021
The previous Asian company to withdraw from US shale was Japanese trading house Sumitomo Corp.
The company sold its shale oil business in the US, which was part of the Eagle Ford shale in southern Texas, during the fourth quarter of 2020.