Reliance Industries Ltd (RIL) said it will buy 60% stake in US-based Carrizo Oil and Gas Inc for $392 million.
RIL said its subsidiary, Reliance Marcellus II will enter in a joint venture with Carrizo Oil. The total payout of $392 million comprises $340 million cash and $52 million of drilling carry obligations.
Upon completion of the transaction, RIL and Carrizo will have 60% and 40% stake, respectively, in a newly formed joint venture between the companies.
The joint venture will have about 1,04,400 net acres of undeveloped leasehold in the core area of the Marcellus Shale in Central and Northeast Pennsylvania, of which RIL's 60% stake will represent approximately 62,600 net acres, the company said in a release.
This acreage is expected to support the drilling of approximately 1,000 wells over the next 10 years. The transaction is anticipated to close by mid-September 2010.
On Thursday, RIL shares ended 0.9% down at Rs1,006 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.2% down at 18,172 points.
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