Reliance Industries said it had signed agreements to sell all of its interest in certain upstream assets in north-eastern and central Pennsylvania, known as Marcellus shale.

The assets, which are currently operated by Carrizo Oil & Gas, Inc., were sold to BKV Chelsea, LLC, an affiliate of Kalnin Ventures LLC, for consideration of $126 million, subject to customary closing terms and conditions.

“Additionally, Reliance could receive contingent payments of up to $11.25 million in aggregate based on natural gas prices exceeding certain thresholds over the next three years,” the oil and gas company said.

The assets produce mainly gas and are located in Susquehanna, Wyoming and Clearfield Counties of Pennsylvania.

Walter Van de Vijver, President and CEO of Reliance Holding USA, Inc., commented that: “This transaction represents an opportunistic sale of developed upstream Marcellus assets and ends a successful partnership of 7 years with Carrizo in a joint sale. We will continue to actively manage the remainder of our US shale resources.”

The Carrizo operated acreage was one of the three upstream assets in the USA, owned by Reliance.

Reliance remains invested in the Marcellus shale play via its non-operated position with Chevron in southwestern Pennsylvania and in the Eagle Ford play via its non-operated position with Pioneer in Texas.

The sale of the assets will be consummated in accordance with the terms of a purchase and sale agreement, dated October 5, 2017, by and between Reliance and the buyer, the company said.

The transaction is anticipated to close by the end of the third quarter of FY2018, with an April 1, 2017 effective date. Citigroup Global Markets, Inc. acted as financial advisor to Reliance, Haynes and Boone served as its legal counsel.

RIL is India’s largest private sector company, with a consolidated turnover of INR 330,180 crore and net profit of INR 29,901 crore for the year ended March.

Seven years ago, it announced that it was buying a 60% stake in Marcellus Shale acreage in the US for $392 million (around Rs 1,800 crore).

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