OIL, IOC acquires 30% stake in Houston-based Carrizo’s shale assets

OIL, IOC acquires 30% stake in Houston-based Carrizo’s shale assets India's public sector companies Oil India Ltd (OIL) and Indian Oil Corp. (IOC) have jointly acquired a 30 per cent stake in Houston-based Carrizo Oil & Gas Inc's Colorado-based liquid rich shale assets.

The assets, situated in Denver-Julesburd Basin, are comprised of 69 per cent of crude oil, 17 per cent of gas, and the remaining is rich liquid.

OIL will own 20 per cent stake in the US oil company, while IOC hold 10 per cent of the equity acquired by the duo.

Speaking about the deal, OIL director (finance) T K Ananth Kumar added, "This deal also marks OIL's first overseas acquisition as a lead partner in a consortium. We are going to close a few more deals in the coming months."

OIL and IOC confirmed the acquisition on Thursday, and stated that they would invest $82.5 million, which would include an upfront cash investment of $41.25 million. The remaining $41.25 million would be invested based on drilling & development costs in future.

The assets currently produce 1,850 to 2,000 barrels of oil. The Indian oil companies would receive 600 to 700 barrels of oil as their share.

OIL and IOC are not the first Indian companies that have hit business deal with Carrizo. In 2011, GAIL (India) had purchased a 20 per cent stake in Carrizo's Eagle Ford shale acreage business. Carrizo also has a joint venture (JV) with Reliance Industries Ltd in the Marcellus shale acreage in Pennsylvania.