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Reliance to divest certain US upstream assets

EBR Staff Writer Published 09 October 2017

Reliance Marcellus II has agreed to sell all its interests in certain US upstream assets to Kalnin Ventures’ affiliate BKV Chelsea for around $126m.

Under the deal, the company will sell its total stake in certain upstream assets in north-eastern and central Pennsylvania.

The deal also includes the contingent payments of up to $11.25m based on the achievement of certain thresholds in the next three years.

The divested assets, which primarily produce gas, are situated in Susquehanna of Wyoming and Clearfield Counties of Pennsylvania.

Reliance invested in the ‘Marcellus Shale Play’ through its non-operated position with Chevron in southwestern Pennsylvania, while in the Eagle Ford play though its non-operated position with Pioneer in Texas.

Carrizo Oil & Gas is the operator of the divested acreage, and is one of the three US upstream assets owned by Reliance.

In 2010, Reliance Marcellus II purchased 60% interest in Marcellus Shale acreage in Central and Northeast Pennsylvania for $392m.

The company had signed agreements with Carrizo Oil & Gas for Marcellus Shale joint venture (JV), which included around 104,400 net acres of undeveloped leasehold in the core area of the Marcellus Shale in Central and Northeast Pennsylvania.

Subject to customary closing terms and conditions, the deal is expected to complete in the third quarter of this year.

Reliance Marcellus II is a subsidiary of Reliance Holding USA and Reliance Industries.

Reliance Holding USA president and CEO Walter Van de Vijver 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.”