05/13/24 - 108 New Stories - REAL Environmental & Conservation Leadership In PA: http://tinyurl.com/3chsfsfm
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Atlas Energy Announces $1.7 Billion Marcellus Shale Joint Venture With Reliance Industries
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Atlas Energy, Inc. announced its entry into a joint venture transaction this week with a wholly owned affiliate of Reliance Industries Limited to transfer an interest in its Marcellus Shale position equal to 120,000 net acres in a transaction valued at $1.7 billion.
Reliance will pay approximately $340 million in cash upon closing and an additional $1.36 billion in the form of a drilling carry.
Atlas will serve as the development operator for the joint venture. Reliance will have the option to operate in certain project areas in the coming years outside of Atlas’ core operating areas of Fayette, Greene, Washington, and Westmoreland Counties in southwestern Pennsylvania.
Atlas will act as the sole leasing agent for the joint venture in the area of mutual interest. In the near future, Atlas and Reliance expect to considerably grow the joint venture’s Marcellus Shale leasehold position within the AMI. Reliance will have the option to acquire a 40 percent share of such new acreage under terms comparable to those agreed to by Atlas, with each party paying its proportionate share of acquisition costs.
In addition, if Atlas decides to sell all or part of the 280,000 additional Appalachian acres currently controlled by it, but excluded from the joint venture and not included in the AMI, Atlas has granted Reliance a right to purchase such acreage at a price of $8,000 per acre. Reliance also receives a right of first offer with respect to potential future sales of this acreage by Atlas at lower prices.
This acreage is located predominantly in Mercer, Crawford, and other Pennsylvania counties not currently included in Atlas’ core Marcellus area of southwestern Pennsylvania.
“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,” commented Edward E. Cohen, Chairman and Chief Executive Officer of Atlas Energy. “This transaction will enable us to accelerate sharply our development of the Marcellus while further reducing our already low finding and development costs and our capital structure will immediately benefit from reduced leverage and enhanced liquidity. As a result of this joint venture, we anticipate creating a significant number of new, well-paying Pennsylvania jobs. Pennsylvania will also benefit from our strong commitment to the highest environmental and safety standards."
Reliance Industries Limited, an India-based industrial enterprise, is one of the largest refiners and petrochemical producers in the world.
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4/12/2010 |
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