RIL, Atlas Energy acquire area in gas-rich region for $192 mn

NEW DELHI: Reliance Industries and its US partner Atlas Energy have acquired 42,344 acres of acreage in the gas-rich Marcellus shale for about $192 million, to boost their portfolio of area they propose to explore for extracting gas from sedimentary rocks.

Reliance had earlier this month bought 40 per cent stake in about 3,00,000 acres Marcellus shale gas project of Atlas for $1.7 billion. After the new acquisition, the two now have 343,000 acres that could hold enough natural gas to satisfy US demand for a decade.

The "42,344 highly prospective Marcellus Shale acres in Fayete, Washington, Indiana, Westmoreland, Armstrong and Clarion Counties of Pennsylvania for an average purchase price of $4,532 per acre," Atlas said in a statement.

RIL's April 9 acquisition was for about $14,000 an acre.

Shale gas is natural gas stored in organic-rich sedimentary rocks. It is considered an unconventional source as the gas may be attached to or "adsorbed" onto organic matter. The gas is contained in difficult-to-produce reservoirs that require special completion, stimulation and/or production techniques to achieve economic production.

Atlas said it would be able to drill over 450 horizontal wells on the latest acquired acreage, adding that it intends to develop a large percentage of the acreage in the next five years.

"These transactions reflect the desire of both Atlas and Reliance to add highly prospective acreage that will enable our joint venture to accelerate development," said Richard D Weber, President of Atlas Energy Inc. "The contiguous nature of this acreage will enable us to concentrate our development and we intend to develop a large percentage of this acreage in the next five years."