Thursday, September 16, 2010

Reliance Looking at Fourth Shale Deal?

Recent speculation has Reliance Industries, India's most valuable public company, eying a joint venture deal with Chesapeake Energy for its interests in the Eagle Ford Shale (also).  If consummated, this would be the fourth U.S. shale deal in the past several months for Reliance.

Chesapeake has around 600,000 acres in the Eagle Ford and has been vocal about its plans to complete a joint venture for the acreage soon to accelerate development of the play.  The company has eight rigs working in the play but plans to ramp up to 43 by year end 2012 (in case you're wondering what CHK plans to do with its Haynesville rigs once its acreage is HBP...)

A deal with Chesapeake would make perfect sense for Reliance.  The company's strategy is to spend money to learn the shale game in advance of the government of India leasing three potential shale plays next year.  There's nobody better to learn from than Chesapeake.  The problem might be finding a seat at the academy now that the company has so many international partners.

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