On June 24, 2010, Reliance Industries Limited (RIL), one of the top private companies of
The deal is valued $1.3 billion (Rs. 60 billion). It has been done through Reliance Eagle Upstream, a subsidiary of RIL. As per the deal, Reliance will have 45% share in the acreage, Pioneer 46% and Newpek holding 9%.
Pioneer has about 310,000 acres in Eagle Ford region. The company has 84% controlling interest while its partner, Newpek LLC, has 16% interest. Post the deal, both the companies will release 45% of their interests in the acreage to RIL.
Reliance will have to make an upfront payment of $266 million in cash to Pioneer and approximately $210 million to Newpek for acquiring their stakes. Reliance would also have to pay an additional $879 million to carry the Pioneer’s share of future drilling costs and $173 to carry Newpek’s share of future drilling costs. The money for drilling costs would have to be paid in the next four to six years.