Reliance Industries Ltd (RIL) said it will be exiting the shale gas business in North America as an agreement was inked to sell off the assets linked to its subsidiary Reliance Eagleford Upstream Holding, LP (REUHLP) in Eagleford shale play.

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"Reliance Eagleford Upstream Holding, LP, a wholly-owned step-down subsidiary of RIL, announced the signing of agreements with Ensign Operating III, LLC, a Delaware limited liability company to divest its interest in certain upstream assets in the Eagleford shale play of Texas, USA," the firm said in a statement.

With this transaction, Reliance has divested all its shale gas assets and has exited from the shale gas business in North America, the statement said.

"A purchase and sale agreement has been signed between REUHLP and Ensign on November 5, 2021, for this sale. The sale is at a consideration higher than the current carrying value of the assets," it said.

Citigroup Global Markets Inc acted as financial advisor to Reliance in the deal, and Gibson, Dunn & Crutcher LLP served as its legal counsel.

In June 2015, the company sold its Eagle Ford midstream joint venture with Pioneer Natural Resources in the US for USD 1 billion. Reliance had spent USD 46 million in acquiring a 49.9 percent stake in Eagle Ford and invested a further USD 208 million.

In February this year, it agreed to sell its entire stake in certain upstream assets in the Marcellus shale gas asset in south-western Pennsylvania in the US for USD 250 million. Reliance was till 2014 bullish on the shale gas but a drop in crude oil prices since late-2014 hit valuations. Shale gas blocks have suffered far more than conventional oil and gas blocks as they are economically viable only when prices are above a certain threshold.

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(Edited by : Aditi Gautam)

First Published:Nov 8, 2021 8:23 PM IST