RIL to raise $126 million from Reliance Marcellus asset sale to BKV Chelsea

Mukesh Ambani-led Reliance Industries seeks to garner $126 Million by selling Reliance Marcellus assets to BKV Chelsea, an associate of Kalnin Ventures. Reliance Marcellus II, LLC, a subsidiary of Reliance Industries announced the signing of agreements to divest all of its interest in upstream assets in north-eastern and central Pennsylvania.

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, according to an ET Now report. The deal is expected to be completed by December, Reliance Industries said in a statement. In September 2010, Reliance Industries acquired a 60 per cent stake in the Marcellus Shale gas asset in the United States for $392 million (around Rs. 1,800 crore).

Kalnin Ventures seeks to invest in upstream oil and gas opportunities in North America (United States of America and Canada) with the goal of creating long-term sustainable value in the energy industry. According to its website, Kalnin Ventures currently is backed by investors with equity fund commitments of USD 500 million, within its oil and gas fund BKV Oil and Gas Capital Partners, L.P.

“This deal is unique from our previous four in that it provides us the opportunity to naturally expand into an operator position while also acquiring additional midstream assets,” said Christopher Kalnin, Managing Director and Co-founder of Kalnin Ventures LLC. “However, it is similar to prior deals in that we are acquiring profitable assets and enhancing them with technology and big data. Our experience as a non-operator, and now operator, coupled with our high-quality asset base and proprietary technology, has put us in a compelling position to expand further in the Super Core of the Marcellus.”

“Separate purchase and sale agreements were entered into with Carrizo (Marcellus) LLC and Reliance Marcellus II, LLC, to acquire their respective interests in the assets (subject to customary closing conditions), which are comprised of interests in 112 wells, including 98 producing wells, 11 drilled and uncompleted (DUC) wells and three wells that are temporarily abandoned,” Kalnin Ventures said in a report.

Reliance Industries Limited (RIL)