Reliance Industries and Pioneer Natural Resources have signed a joint venture agreement for the Eagle Ford Shale play in Texas.
Under the agreement, Pioneer will sell a 45% interest in the 212,000 net acres it leases for $1.15bn.
Pioneer will retain an average 42% working interest in the acreage, Reliance will receive an average 41% working interest, while other working interest owners will continue with the remaining 17%.
Reliance will also pay $266m in cash and an additional $879m to carry Pioneer's share of future drilling costs.
Reliance will also become a 49.9% partner with Pioneer in the development of midstream assets in the Eagle Ford Shale.
Under the joint venture, Reliance will have the right to perform drilling and completion operations beginning in 2011 and it intends to fund 75% of Pioneer's portion of drilling costs until the $879m is fully used.