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Reliance-Pioneer deal is month's largest

India's Reliance Industries and Dallas-based Pioneer Natural Resources announced a joint venture transaction in the highly prospective Eagle Ford Shale play in South Texas on June 24. Pioneer sold a 45% interest in about 212,000 net acres leased by the company for a total price of $1.15 billion. Reliance paid $266 million in cash to Pioneer at closing and will pay an additional $879 million to carry Pioneer's share of future drilling costs. Reliance will also participate with Pioneer in the development of midstream assets in the Eagle Ford Shale as a 49.9% partner.

Reliance also entered into a JV agreement with Newpek LLC, Pioneer's existing partner in the Eagle Ford Shale play, for total consideration of roughly $210 million. The joint venture agreement was effective June 1.

On June 16, Houston-based Southwestern Energy sold producing rights to the Haynesville and Middle Bossier Shale intervals only in 20,063 net acres in East Texas to EXCO Resources and BG Group for about $355.8 million. Southwestern retains drilling and producing rights covering all other depths in the acreage, including the company's current James Lime and Pettet drilling programs. EXCO and BG Group will develop the assets jointly. The deal closed June 30.

In transactions involving non-US assets, France's Total said on July 7 that it would buy Canada's UTS Energy Corp. for about US$1.42 billion, boosting the French company's holding in the Alberta oil sands. The small Canadian company had spurned a similar deal just 18 months ago. However, France's biggest oil company revised the offer as oil prices stabilized near $75 a barrel and new oil sands investments look profitable again. UTS will spin off its stake in the Frontier and Equinox oil sands properties into a new company, SilverBirch Energy Corp., to be owned by existing shareholders.

New York-based Hess Corp. said on June 21 it would exercise its right to pre-empt Total's sale to BP of its interests in a pair of Norwegian North Sea offshore fields, Valhall and Hod. Hess will gain additional interests of 7.85% in Valhall and 12.5% in Hod for $496 million in cash. Together with the completion of a previously announced strategic trade between Hess and Shell, the move will bring Hess's interests in Valhall and Hod to 64.05% and 62.5%, respectively. The deal is expected to close in the third quarter.

Click here to download the pdf of the "Rodman & Renshaw - Acreage Values of Unconventional Resource Plays — Select Transactions YTD 2010"

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