Northern Oil and Gas purchases Reliance Marcellus assets for $250M
Friday, April 9, 2021
Northern Oil and Gas recently announced it purchased Reliance Industries assets in the Marcellus Shale play for $250 million, according to Natural Gas World.
The company paid nearly $121 million in cash and issued 3.25 million of common stock warrants for the business.
The business is expected to produce 75-85 mcf per day and receive $20-25 million of capital expenditure in 2021. Northern has hedged 66% of the assets’ forecasted gas production in the remainder of the year at an average price of $3/m Btu, and 33% of their projected output in the first quarter of 2022 at $3.17/m Btu.
Learn more: Natural Gas World > Northern closes $250MN reliance purchase
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.