Reliance Industries (RIL) through its subsidiary Reliance Marcellus on 9 April 2010 signed an agreement to form a JV with US based Atlas Energy. The deal is valued at $1.7 billion (approx Rs 7,531 crore).

Under the JV agreement, RIL has acquired 40 per cent in Atlas' Marcellus Shale acreage position in southwestern Pennsylvania for $339 million (approx Rs 1,501.77 crore). Along with this, it is likely to fund $1.36 billion (approx Rs 6,024.8 crore) of capital under a carry arrangement for 75 per cent of Atlas' capital costs over an seven-and-a-half year development programme.

RIL will have the option to acquire a 40 per cent share of such new acreage with each party paying its proportionate share of acquisition costs. RIL also obtains the right of first offer with respect to potential future sales by Atlas of around 2,80,000 additional Appalachian acres currently controlled by Atlas (not included in the present JV).

Along with Atlas, the company will work on nearly 3,00,000 acre, of which its share will be 1,20,000 acre. The two companies have agreed upon a five-year development plan that calls for the drilling of 45 horizontal Marcellus Shale wells for the JV during the remainder of 2010, increasing to 108 wells in 2011, 178 wells in 2012, and 300 wells in 2013 and 2014.

Moreover, RIL plans to invest an additional $3.4 billion (approx Rs 15,062 crore) for its share of the development costs over the next decade.

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RIL may discover hydrocarbon in Cauvery region (8-March-10)