HOUSTON, Aug. 5 /PRNewswire/ -- Avista Capital Partners, a leading private equity firm, today announced the execution of an agreement by its wholly-owned entity, ACP II Marcellus LLC ("ACPM"), to sell approximately 52,200 net acres of its Marcellus Shale mineral rights in Pennsylvania to a subsidiary of Reliance Industries Limited ("Reliance") for $326.6 million in cash.
Upon completion of the sale of its Pennsylvania acreage, Avista, through ACPM, will continue to hold a direct interest in approximately 70,000 net acres in the Marcellus Shale region primarily in West Virginia and New York. This acreage will continue to be developed in partnership with Carrizo through ACPM's existing joint venture.
In a related announcement, Avista's joint venture partner, Carrizo Oil & Gas, Inc. (Nasdaq: CRZO), will also sell a portion of its Pennsylvania acreage to Reliance in a separate transaction. Avista formed its joint venture with Carrizo in December 2008 to focus on the acquisition and development of natural gas properties in the emerging Marcellus Shale play. Avista said its joint venture with Carrizo will now focus on acquiring and developing acreage prospective for the Marcellus Shale primarily in the states of West Virginia and New York. Avista's original $150 million equity commitment to the joint venture to fund the purchase of mineral acreage will remain in place to fund continuing operations.
Robert Cabes, a Partner at Avista, said, "Avista is pleased with the sale of a portion of acreage in the joint venture. The sale to Reliance will allow Carrizo to team with a respected, well capitalized industry partner in order to accelerate the development of the acreage in central and northeast Pennsylvania. We look forward to continuing our successful joint venture with Carrizo and enhancing the value of our extensive acreage position in West Virginia and New York."The transaction is expected to close by mid – September 2010, subject to certain closing conditions. J.P. Morgan acted as financial advisor and Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to Avista.