Deal insight

Reliance to pay US$1.7 billion for a stake in Atlas Energy's Marcellus acreage

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Report summary

Continuing the trend of international companies buying into US shale gas assets, India-based Reliance has announced the acquisition of a 40% stake in Atlas' Marcellus acreage. The consideration is US$1.7 billion, US$340 million to be paid as cash at closing and the balance as a carry of Atlas' drilling costs over the next five to seven years. Our base case valuation of the acquired interests (excluding the cost carry) is US$1.45 billion. This equates to an Implied Long-term Oil ...

What's included

This report contains

  • Document

    Reliance to pay US$1.7 billion for a stake in Atlas Energy's Marcellus acreage

    PDF 963.65 KB

Table of contents

  • Executive summary
  • Transaction details
  • Upstream assets
    • Valuation Methodology
    • Development of the substantial resource outside the AMI lowers the deal implied gas price
    • Technology improvements could further reduce costs and enhance development returns
    • Improved water management could reduce unit production costs
    • Severance tax in Pennsylvania a prevailing downside risk
    • Continued downward pressure on gas prices
    • Reliance
    • Atlas Energy
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 8 images and tables including:

Images

  • Atlas Marcellus acreage

Tables

  • Executive summary: Table 1
  • Upstream assets: Table 1
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Deal analysis: Table 3
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2

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