OIL and IOC jointly acquire 30% stake in Carrizo’s shale assets in the Niobrara basin
New Delhi 04-Oct-2012
Delhi, October 4, 2012: Oil India Limited (OIL) and Indian Oil Corporation (IOCL) have jointly acquired a stake in Carrizo’s liquid rich shale assets in the Niobrara basin in Colorado, USA through their wholly owned US subsidiaries. Their first ever upstream acquisition in the USA, the two Public Sector companies today executed definitive agreements with Carrizo, a company based in Houston, Texas to enter into a joint venture. Under the terms of the deal, OIL and IOCL will acquire 30% (OIL – 20%, IOCL: 10%) in the Niobrara asset via their respective subsidiaries. Carrizo has 61,500 gross acres in the basin out of which the OIL – IOCL consortium will have 18,450 acres, spread across three counties in Texas.
The total investment for the two companies would be around US$ 82.5 Million, including an upfront cash payment of US$ 41.25 Million and a subsequent US $ 41.25 Million which is linked to Carrizo’s future drilling and development costs The investment provides the companies an entry into the early stage of an unconventional play in a well known producing basin. The transaction also provides the two companies with a platform for additional acquisitions in North America.
OIL’s Chairman & Managing Director, Mr. S.K. Srivastava said “This acquisition is in line with our corporate strategy of diversification. We have earmarked part of our financial reserves for acquisitions and new opportunities to bolster our overseas portfolio and were keen on joint ventures in countries with geopolitical stability such as the US, UK, Canada and Australia. This acquisition will also help us gain experience in the technology and operations of shale / tight oil fields and use its findings to implement the same in India”, he said.
IndianOil’s Chairman, Mr. R.S.Butola said “The Carizzo stake is another step in our journey to emerge as an integrated energy company. Our various diversifications in petrochemicals and gas business have not only made a notable impact by garnering a significant share of the market but are also poised to emerge as a potent and vibrant feature of the company’s profile in the future. While our E&P plans have been relatively low key so far, with the shale asset in the Niobrara basin we should gain momentum in this space. The learning and technology exposure that will accrue in this field would stand us in good stead in the future”, added Mr. Butola.
About OIL, IOCL and Carizzo
Incorporated in 1959, Oil India Limited is the second largest national oil and gas company in India as measured by total proved plus probable oil and natural gas reserves and production. It is engaged in the business of oil & gas exploration, production and crude oil transportation. The company has over 100,000 sq km of Petroleum Exploration License (PEL)/ Mining Lease (ML) areas for its exploration and production activities. OIL has total 2P reserves of over 940 mmboe with a reserve replacement ratio of over 137% in FY12. The company produced over 3.85 MMTPA of crude oil, over 7 MMSCMD of Natural Gas and over 52,000 tons of LPG in the corresponding period.
IndianOil is India's flagship national oil company, with business interests that straddles the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to exploration & production of crude oil & gas as well as marketing of natural gas and petrochemicals. It is the highest ranked Indian corporate in the prestigious Fortune 'Global 500' listing, ranked at the 83rd position in the year 2012. IndianOil and its subsidiaries have a dominant share of the petroleum products market, national refining capacity and downstream sector pipelines capacity in India. IndianOil and its subsidiaries own and operate 10 of India's 20 refineries has a formidable network of over 37,000 customer touch-points dotting the landscape, across urban and rural India besides having a portfolio of powerful energy brands like Indane LPGas, SERVO lubricants, XtraPremium petrol, XtraMile diesel and PROPEL petrochemicals
Carrizo Oil & Gas, Inc. is a Houston-based NASDAQ listed energy company actively engaged in the exploration, development, exploitation, and production of oil and natural gas primarily in the US. The company has assets in the Eagle Ford Shale in South Texas, the Barnett Shale in North Texas, the Marcellus Shale in Appalachia, the Niobrara Formation in Colorado, and in proven onshore trends along the Texas and Louisiana Gulf Coast regions. Carrizo is also actively developing its oil discovery known as the Huntington Field in the UK North Sea. Carrizo controls significant prospective acreage blocks and utilizes advanced drilling and completion technology along with sophisticated 3-D seismic techniques to identify potential oil and gas drilling opportunities and to optimize reserve recovery. Carrizo also has Joint Ventures with other Indian players such as GAIL and RIL on their Eagle Ford and Marcellus basin acreage.
