In a follow up to my last blog, Reliance Now Eyeing Eagle Ford for JV, Pioneer and Reliance announced today that they will be joining forces in the ever popular Eagle Ford Shale. For $1.15 billion Reliance Industries now owns 45% interest in roughly 212,000 net acres in the Eagle Ford and will also assist, as a 49.9% partner, in the development of Eagle Ford midstream assets with Pioneer. Reliance will initially pay $266 million to Pioneer in cash and will take on a drilling carry of $879 million which will be paid by funding 75% of future drilling cost until payment is complete. Effective June 1st, 2010 Reliance acquired 95,300 net acres in leasehold in which Pioneer will average a 42% working interest and Reliance will average 41%. Reliance also JVs with Pioneer’s current JV partner Newpek LLC for roughly $210 million.
Pioneer and Reliance will continue with Pioneer’s plan to ramp up their development program and are on track to have 6-7 rigs and 26 new horizontal Eagle Ford wells by year end. Moving forward Reliance will have the option to acquire a 45% interest in future leasehold positions within the area of mutual interest that includes Atascosa, Bee, DeWitt, Karnes, Live Oak and McMullen Counties.
The following is a slide from Pioneers presentation regarding the new JV that gives an operational update of Pioneer in the Eagle Ford play.
For more information about the Pioneer/Reliance JV visit the Acquisition and Divestitures Folder in the Unconventional Updates in DI’s DNA.
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