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    Reliance Industries, Pioneer Resources to sell off stake in US company

    Synopsis

    Reliance Industries, along with its partner Pioneer Natural Resources Co, plan to divest their JV company Eagle Ford Shale Midstream Business.

    ET Bureau
    MUMBAI: Reliance Industries, along with its partner Pioneer Natural Resources Co, plan to divest their JV company Eagle Ford Shale Midstream Business.

    US-based Pioneer Natural Resources, which holds 50.1% in the JV and is operator of the project, said in a statement that the divestment is part of its strategy to focus more on its shale gas explorations business. Reliance group, which holds 49.9% in the JV through arm Reliance Holding USA, is also pursuing sale of its stake. In a separate statement to Indian bourses, RIL said, "Reliance has also agreed to consider a divestment of its shareholding in this joint venture...The current investments in EFS Midstream LLC is $ 208 million."

    The Midstream business of Eagle Ford owns and runs 10 gathering plants and around 460 miles of pipelines. The JV, which was formed in 2010, is likely to generate $100 million in cash flow in 2015, the statement said. "The sale of EFS Midstream would allow us to strategically redeploy capital to our core, oil-rich Spraberry/Wolfcamp assets in the Permian Basin of West Texas, where we are successfully transforming the substantial resource potential we delineated in 2013 into strong production growth," said Scott D Sheffield, chairman and CEO, Pioneer Natural Resources, in the statement.

    "We currently have no plans to divest our Eagle Ford Shale upstream assets. The sale of EFS Midstream is not expected to impact our ability to export processed Eagle Ford condensate," he said.
    Image article boday
    Last month, commenting on media reports that RIL may sell its stake in the Eagle Ford JV at an estimated $4.5 billion, RIL's chief financial officer Alok Agarwal told reporters, "Eagle Ford is the most successful joint venture and it has gained a very decent amount of valuation in the last 12 months. Our partners and we are looking at what's best for the JV going forward."

    Besides, its stake in Eagle Ford, RIL owns stakes in two more shale ventures in the US. RIL owns 40% in Chevron's Marcellus shale asset and 60% in and asset of the Carrizo Oil and Gas Inc in Central and Northeast Pennsylvania.


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