Indian oil firms to buy stake in Carrizo's Niobrara shale assets

Oil India Ltd. (OIL) and Indian Oil Corp. (IOC) jointly agreed to acquire 30% of Carrizo Oil & Gas Inc.’s liquid-rich shale assets in the Niobrara basin in Colorado through their wholly owned US subsidiaries for $82.5 million total, marking the India parent companies’ first US upstream acquisition.

OIL will acquire 20% interest and IOC will acquire 10% interest in Carrizo’s Niobrara holdings, which are in Weld and Adams counties in Colorado. Terms call for an upfront payment of $41.25 million and a subsequent $41.25 million carry of Carrizo’s future drilling and development costs.

Carrizo of Houston last year sold 20% interest of its South Texas Eagle Ford shale to GAIL India Ltd. and in 2010 sold a 20% interest of its Marcellus shale assets in the Appalachia region to Reliance Industries Ltd.

The Niobrara joint venture involves 18,100 net mineral acres and 555 boe/d (75% oil) of production from 24 Carrizo-operated wells. Carrizo will operate the assets in which OIL and IOC will be partners.

OIL and IOC are looking for additional acquisitions abroad as well as experience with unconventional oil and gas operations, the companies said.

S.K. Srivastava, OIL chairman and managing director, said the Carrizo acquisition fits OIL’s corporate strategy of diversification.

“We have earmarked part of our financial reserves for acquisitions and new opportunities to bolster our overseas portfolio and were keen on joint ventures in countries with geopolitical stability such as the US, UK, Canada, and Australia.”

R.S.Butola, IOC chairman, called the Carizzo joint venture “another step in our journey to emerge as an integrated energy company.” IOC is primarily a refiner although it is moving toward more exploration and production.

“While our E&P plans have been relatively low key so far, with the shale asset in the Niobrara basin we should gain momentum in this space,” Butola said. “The learning and technology exposure that will accrue in this field would stand us in good stead in the future.”

S.P. Johnson, Carrizo's president and chief executive officer, said upfront proceeds from the joint venture would help pay for 2012 capital expenditures and the drilling carry will allow the addition of a second drilling rig in the Niobrara in early 2013.

OIL is a state-run oil and gas company in India involved with E&P and crude oil transportation. Most of its producing fields are in northeastern India.

The company has more than 100,000 sq km of petroleum exploration license and mining lease areas for its exploration and production activities. OIL estimates its proved and probable reserves at more than 940 million boe.

IOC, a state-run company, is involved with refining, petrochemicals, pipeline transportation, and product marketing as well as E&P. IOC and its subsidiaries own and operate 10 of India's 20 refineries.

Carrizo has assets in the Eagle Ford shale in South Texas, the Barnett shale in North Texas, the Marcellus shale in Appalachia, and the Niobrara formation.

In addition, Carrizo also is developing Huntington oil field in the UK North Sea.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected