Reliance Sells US Shale Gas Asset for $126 Million

Reliance Marcellus II LLC, a subsidiary of Reliance Holding USA Inc. (Reliance), and Reliance Industries Limited (RIL), has signed agreements to sell 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 $126 million.

In addition, Reliance could receive contingent payments of up to $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.

The deal is anticipated to close by the end of the third quarter of FY2018.

The Carrizo operated acreage was one of the three upstream assets in US, 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.

"This deal 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," said Walter Van de Vijver, president and CEO of Reliance Holding USA Inc.

Citigroup Global Markets Inc acted as financial advisor to Reliance. Haynes and Boone served as its legal counsel.