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Reliance Considering Buying Pioneer Shale Gas Assets Stake

11 Jun 2010 Evaluate

Reliance Industries Ltd., is considering buying a stake in shale gas assets owned by Pioneer Natural Resources Co. in the U.S., according to sources. The Irving, Texas-based company said last month it expects to announce a joint venture to accelerate its Eagle Ford Shale development by the end of the second quarter. Reliance, which acquired a stake in shale gas assets in the U.S. from Atlas Energy Inc. in April for $1.7 billion, is joining Royal Dutch Shell Plc and Exxon Mobil Corp. in buying unconventional gas reserves in anticipation prices for the cleaner-burning fuel will recover. Shale-gas deposits weren’t considered worth tapping before Houston billionaire George P. Mitchell pioneered new extraction techniques in the 1990s.

Unconventional gas is the industry term to describe the fuel trapped in shale formations, coal beds and impermeable sandstone rock. Pioneer has about 310,000 acres of at the Eagle Ford Shale Play in south Texas, according to its website. The company’s first successful well tested in October 2009 and second one in January this year. Reliance has the cash flowing in now and it makes sense to grow inorganically and become a global player.

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