Reliance Industries will pay Atlas Energy Inc. (ATLS) $1.7 billion for a 40% stake in its Marcellus Shale natural-gas field. Reliance will pay $340 million at the close of the deal and $1.36 billion in the form of a drilling carry for 120,000 acres.
The two companies agreed to a five-year development plan which includes the drilling of 45 horizontal Marcellus Shale wells for the rest of 2010, increasing to 108 wells in 2011, 178 wells in 2012, and 300 wells in 2013 and 2014.
“We are excited by this opportunity to partner with Reliance, one of the world's largest vertically integrated energy companies, and one that has demonstrated exceptional capability in all aspects of the energy business. We believe that this joint venture will greatly increase the value of Atlas' business," said Edward E. Cohen, chairman and chief executive of Atlas Energy, in a statement.
Reliance Industries Limited is an India-based industrial enterprise and petrochemical producer. Atlas Energy Inc. is an independent natural gas producer in the Appalachia and Michigan Basins and a producer in the Marcellus Shale in Pennsylvania.
Shares of Atlas surged on the news, jumping 17.3% to $37.32.
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