Reliance to pay US$1.3 billion for a stake in Pioneer's Eagle Ford acreage
Reliance has announced the acquisition of a 45% stake in Pioneer Natural Resources' Eagle Ford Shale acreage. The consideration is US$1,315 million: US$263 million to be paid as cash at closing with the balance to be paid as 75% of Pioneer's drilling costs through 2012. Our base case valuation of the acquired interests (excluding cost carry) is US$1 billion. This equates to an Implied Long-term Oil Price of US$80/bbl, or an implied long-term Henry Hub gas price of US$6.75/mcf ...