Atlas, Reliance add Marcellus acreage
Atlas Energy Inc., Pittsburgh, and Reliance Industries Ltd., Mumbai, closed on a $1.7 billion joint venture in the Appalachian basin Marcellus shale play and added more than 42,000 acres to their portfolio.
By OGJ editors
HOUSTON, Apr. 21 -- Atlas Energy Inc., Pittsburgh, and Reliance Industries Ltd., Mumbai, closed on a $1.7 billion joint venture in the Appalachian basin Marcellus shale play and added more than 42,000 acres to their portfolio.
Atlas transferred to Reliance a 40% interest in its 300,000-acre Marcellus shale position as the deal took effect (OGJ Online, Apr. 9, 2010). Separately, the two companies agreed to acquire 42,344 additional acres in a series of transactions.
The acreage to be acquired is in the Pennsylvania counties of Fayette, Washington, Indiana, Westmoreland, Armstrong, and Clarion. Purchase prices averaged $4,532/acre.
In the 5-year development JV, the companies plan to drill 45 horizontal Marcellus shale wells for the JV in the rest of 2010, 108 wells in 2011, 178 wells in 2012, and 300 wells in 2013 and 2014.
Reliance will also acquire a 40% interest in the new acreage, almost all of which is held by production and is either contiguous with the JV’s initial acreage or is in concentrated blocks. Atlas believes that it will be able to drill more than 450 horizontal wells on the new acreage, assuming 1,000-ft spacing between laterals.
Atlas controls another 280,000 acres prospective for Marcellus shale outside of the AMI.