Avista Capital Partners has sold roughly 52,200 net acres of its Marcellus Shale mineral rights in Pennsylvania to Reliance Industries for $326 million. The New York-based firm will retain approximately 70,000 net acres in the Marcellus Shale region, primarily in West Virginia and New York, which will continue to be developed by Avista’s joint venture with Carrizo Oil and Gas.
Avista made an original investment of $116 million in the JV, from a total of $150 million commitment from its second fund. The firm closed the fund on $1.8 billion earlier this year.
“The sale to Reliance will allow Carrizo to team with a respected, well capitalised industry partner in order to accelerate the development of the acreage in central and Northeast Pennsylvania,” said Avista partner Robert Cabes.
Separately, Carrizo has also announced it will sell a portion of its Pennsylvania acreage to Reliance in a separate transaction. Avista teamed up with Carrizo in December 2008 to acquire and develop natural gas properties in the Marcellus Shale region. The JV will now focus on Marcellus Shale acreage in West Virginia and New York, and Avista’s original $150 million commitment will remain in place to fund continuing operations.
Avista makes controlling and minority investments, primarily in U.S.-based companies, in connection with leveraged buyouts, build-ups and growth financings. Avista focuses primarily on the energy, healthcare and media sectors.