Carrizo Oil & Gas and Reliance Industries have closed a previously announced joint venture transaction in the Marcellus Shale.
Under the transaction Reliance acquired a 20% interest in 52,200 net Carrizo acres in Pennsylvania, considered highly prospective for Marcellus Shale natural gas, for $65m.
Reliance paid $11.4m to Carrizo and a further $1.7m payment is expected later this year. In addition, Reliance will pay $52m of Carrizo's share of future drilling, completion and seismic costs.
The new joint venture agreement covers 104,400 gross acres in northern and central Pennsylvania. Carrizo retains a 40% working interest in the acreage while Reliance owns 60%.
Carrizo will continue to be the operator and Reliance will have the right to assume operations in parts of Central Pennsylvania after one year.