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 ...
Table of contents
- Executive summary
- Transaction details
- Upstream assets
-
Deal analysis
- Valuation Methodology
-
Upsides and risks
- 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
-
Strategic rationale
- Reliance
- Atlas Energy
- Oil & gas pricing and assumptions
Tables and charts
This report includes 8 images and tables including:
- Executive summary: Table 1
- Atlas Marcellus acreage
- 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
What's included
This report contains:
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