GAIL (India) has acquired its first shale gas assets in the USA through its wholly owned US subsidiary GAIL Global (USA) Inc., formed on September 26, 2011. The subsidiary company has executed definitive agreements with Carrizo Oil & Gas Inc (“Carrizo”), a NASDAQ (CRZO) listed company based in Houston, Texas, to enter into an unincorporated joint venture, under which GAIL Global (USA) Inc., will acquire a 20% interest in Carrizo’s Eagle Ford Shale acreage position. The joint venture will have 20,200 gross acres, out of which GAIL subsidiary would have 4,040 net acres spread over four counties in Texas.
The total investment for this would be around $300 million dollar over a period of next 5 years. This includes upfront cash payment of $63.7 million and a carry amount of $31.3 million linked to Carrizo’s future drilling and development costs. Major part of these investments would be funded by the GAIL Global out of its earnings. The joint venture is expected to drill additional 139 wells in the acreage.
Meanwhile, Carrizo will continue to function as the operator for the joint venture. Included in the transaction are eight wells in the acreage which are currently producing about 2,350 net barrels of oil equivalent per day (470 barrels of equivalent per day net to GAIL).
Company Name | CMP |
---|---|
GAIL India | 204.15 |
Petronet LNG | 296.85 |
Linde India | 8820.80 |
Confidence Petroleum | 81.95 |
Refex Industries | 135.00 |
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