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Reliance Exits US Shale

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Reliance Industries has exited the US shale scene with its second asset sale this year.

The Indian major reached an agreement on November 5 with Ensign Operating III to sell its stake in the Eagle Ford play in Texas, its final position in the US shale scene following its deal in February to sell its position in Pennsylvania’s Marcellus shale for $250 million.

Reliance did not disclose the price of the Eagle Ford sale, but said it was “at a consideration higher than the current carrying value of the asset”.

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According to Ensign, the acquisition includes about 62,000 net acres and current production of about 18,000 barrels of oil equivalent per day.

Reliance bought into Eagle Ford in 2010 by acquiring a 45 percent stake in Pioneer Natural Resources’ 212,000 net acre position for $1.15 billion.

Pioneer sold its remaining 59,000 net acres to Ensign in May 2019 for about $475 million.

With the acquisition of the former Reliance assets, privately held Ensign now operates about 130,000 net acres in Eagle Ford with production of nearly 40,000 boepd.

“Through our efforts over the last three years, we have created an asset that generates significant free cash flow and has a deep inventory of highly economic well locations in the core of the Eagle Ford shale,” Ensign chief executive Brett Pennington said.

He added: “We are excited to complete the puzzle with the acquisition of Reliance’s interest and now operate one of the premier assets in the basin.”

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