GAIL will pay $ 63.7 mn in cash and bear $ 31.3 mn of the Houston- based firms future costs to develop the area in the Eagle Ford deposits in Texas
State- run gas utility Gail India, in its first acquisition
process said that it will buy a 20 per cent stake in a shale gas operated by Carrizo Oil and Gas Inc for $ 95 million.
GAIL will pay $ 63.7 million in cash to Carrizo and bear $ 31.3 million of the Houston- based firms future costs to develop the area in the Eagle Ford deposits in Texas, the companies said in separate statements.
The Indian firm, through its wholly owned US subsidiary GA, IL Global ( USA) Inc, formed on September 26, 2011, will invest $ 300 million over the next five years in the lucrative Eagle Ford shale assets.
” The subsidiary company on Thursday executed definitive agreements with Carrizo, a NASDAQ- listed company based in Houston, Texas, to enter into an unincorporated joint venture,” GAIL said.
The joint venture will have 20,200 gross acres, out of which the GAIL subsidiary will have 4,040 net acres spread over four counties in Texas.
GAIL ” will consider expanding its business portfolio in the North American market by pursuing various upstream and midstream opportunities, including LNG exports to India,” company Chairman and Managing Director B C Tripathi said.
The company follows in the footsteps of Reliance Industries, which has since last year acquired three shale gas prospects in the US, including a $ 1.7 billion deal with Atlas Energy to own 40 per cent of its Marcellus Shale assets.
GAIL will get a net 4,040 acres in La Salle County, according to Carrizos statement.
The agreement includes a 20 per cent share in eight wells that produce about 2,350 barrels of oilequivalent a day.
The joint ventures lease hold, is located in the wet gas/ condensate window in the core area of the Eagle Ford shale in South Texas, having significant liquids content, it said.
” We believe that this transaction with Carrizo comes at an opportune time,” Tripathi said. ” Under the arrangement, GAIL shall be sending secondees to Carrizo to work on the Eagle Ford assets and GAIL and Carrizo shall also work together in exploring shale gas opportunities in India and other countries outside of the US.” ” This transaction represents a major step in GAILs efforts to establish its presence in North America,” he added.
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