RIL acquired shale gas assets through joint ventures in the US between 2010-2013, as a part of its global energy portfolio diversification plan, But as shale gas prices corrected and the viability of these projects became challenging, the company started divesting these assets.
RIL said that it has entered into an agreement with Delaware-based Ensign Operating III, LLC to divest its stake in certain upstream assets in the Eagleford shale gas business. Prior to this, RIL, along with its partner Pioneer Natural Resources Co, had divested their joint venture company Eagle Ford Shale Midstream Business in 2014.
RIL held 49.3% stake in the business; it did not reveal the financial consideration for the deal. “The sale is at a consideration higher than the current carrying value of the assets,” the RIL statement stated.
Shares of RIL closed at Rs 2,502 on Monday on BSE, marginally up from the previous close.
Pioneer Natural Resources Co sold its entire working interest in the joint venture to Ensign Operating with effect from January 1, 2019. Subsequently, all the rights, title and interest in and under the operating agreement for the asset was acquired by Ensign.
“With this transaction, Reliance has divested all its shale gas assets and has exited from the shale gas business in North America,” RIL said.
Citigroup Global Markets, Inc. acted as financial advisor to Reliance and Gibson, Dunn & Crutcher LLP served as its legal counsel.
