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GAIL acquires shale gas assets in the US
GAIL has entered into a joint venture with US-based Carizzo Oil & Gas (Carizzo) to
acquire a 20% interest in Carizzo Eagle Ford Shale, which owns shale gas assets. The joint
venture will have 20,200 gross acres, out of which GAIL’s share will be 4,040 acres. The
upfront payment is US$63.7mn; and there is a carryover amount of US$31.3mn, which
will be linked to Carizzo’s future drilling and development costs. Over the next five years,
the joint venture will invest ~US$300mn in the assets. Currently, the joint venture produces
2,350boe per day from 8 wells, while it is expected to drill another 139 wells in the
acreage. We await further clarity on the timing of production from these assets.
Meanwhile, we maintain our Buy rating on the stock with a target price of `516.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
GAIL acquires shale gas assets in the US
GAIL has entered into a joint venture with US-based Carizzo Oil & Gas (Carizzo) to
acquire a 20% interest in Carizzo Eagle Ford Shale, which owns shale gas assets. The joint
venture will have 20,200 gross acres, out of which GAIL’s share will be 4,040 acres. The
upfront payment is US$63.7mn; and there is a carryover amount of US$31.3mn, which
will be linked to Carizzo’s future drilling and development costs. Over the next five years,
the joint venture will invest ~US$300mn in the assets. Currently, the joint venture produces
2,350boe per day from 8 wells, while it is expected to drill another 139 wells in the
acreage. We await further clarity on the timing of production from these assets.
Meanwhile, we maintain our Buy rating on the stock with a target price of `516.
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