Atlas Energy, Inc.(NASDAQ ATLS) , an an independent natural gas and oil producer based in Moon Township, Pennsylvania has announced a joint venture with Indian based Reliance Industries Ltd.
Under the terms of the agreement Reliance Industries Ltd. will pay Atlas Energy $1.7 billion for a share of Atlas' Marcellus Shale natural gas assets. Reliance will control a 40% interest in 300,000 acres in the Marcellus region. Reliance will pay Atlas Energy $340 million in cash upon closing of the deal, with the remaining $1.36 billion to be in the form of drilling carry whereby Reliance will cover 75% of joint venture drilling and completion costs.
The two energy companies plan to drill 45 horizontal Marcellus Shale natural gas wells in 2010. Atlas and Reliance's 5 year development plan for their Marcellus Shale assets call for as many as 300 natural gas wells in 2013 and 2014.
The Marcellus Shale, which covers much of the Appalachian Basin, is highly prized for vast and untapped natural gas reserves.
Shares of Atlas Energy, Inc. (NASDAQ ATLS) rallied on the news with ATLS stock price finishing up 20.25% to $38.25, the highest level since September 2008.