Atlas Energy Inc. and India's Reliance Industries Ltd. said Wednesday they will buy another 42,344 acres in the Pennsylvania portion of the Marcellus Shale for an average purchase price of $4,532/acre, or around $191.9 million.
The two companies earlier this month became partners in the shale play in a transaction worth an estimated $1.7 billion (see Daily GPI, April 12). The new leasehold covers parts of Fayette, Washington, Indiana, Westmoreland, Armstrong and Clarion counties.
The additional leasehold is contained with the partners' area of mutual interest (AMI), and Reliance agreed to acquire a 40% stake in the new acreage. "Substantially all of the acreage to be acquired is held by production and is either contiguous with the joint venture's existing acreage or is in concentrated blocks of acreage," Atlas stated.
"These transactions reflect the desire of both Atlas and Reliance to add highly prospective acreage that will enable our joint venture to accelerate development," said Atlas President Richard D. Weber. "The contiguous nature of this acreage will enable us to concentrate our development and we intend to develop a large percentage of this acreage in the next five years."
Atlas said it may be able to drill more than 450 horizontal wells on the newly acquired acreage assuming 1,000-foot spacing between lateral wells.
With the latest transaction, the joint venture would control about 343,000 acres in the Marcellus play, of which around 206,000 acres are net to Atlas. The Pittsburgh-based producer controls an additional 280,000 acres that are prospective for the Marcellus Shale outside the AMI.
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