Pushing further its interest in shale gas resources, the Mukesh Ambani-controlled Reliance Industries Ltd is set to sign a joint venture deal with US-based Pioneer Natural Resources Co to develop shale gas assets in the Eagle Ford gas field in Texas.

Under the agreement, Pioneer will sell a 45 per cent interest in approximately 212,000 net acres leased by the company in the highly prospective Eagle Ford Shale play for a total price of $1.15 billion.

Reliance will pay $266 million in cash to Pioneer at closing and will pay an additional $879 million to carry Pioneer's share of future drilling costs. Reliance will also participate with Pioneer in the development of midstream assets in the Eagle Ford Shale as a 49.9 per cent partner.

After drilling another highly productive well in the Eagle Ford Shale acreage early last month, Scott Sheffield, chairman and CEO of Pioneer had said that in order to further accelerate Eagle Ford Shale development, the company was actively pursuing a joint venture, with an announcement expected by the end of the second quarter of 2010.

Since then it had been in talks with RIL to buy a stake in its shale gas assets. (See: Reliance Industries plans second shale gas JV in US)

While RIL was still tight-lipped about the transaction, saying it could not comment at this point, Pioneer has gone ahead and announced the deal on Wednesday.

For RIL, this would be second deal of its kind in recent months. In April, the company had entered into a partnership with Atlas Energy by picking up a 40 per cent stake in its core Marcellus shale gas operations in eastern US. (See: Reliance to invest $1.7 billion in JV with Atlas Energy) 

The oil refinery-to-retail conglomerate's chairman Mukesh Ambani had at its annual general meeting last week said that his company would continue to pursue ''similar joint development opportunities with operators besides building on its own a substantial upstream business in North America.'' 

Pioneer's shale gas assets comprise 310,000 acres is in the Eagle Ford region of south Texas. RIL's deal with Atlas Energy valued the 3.43-lakh acres in the Marcellus region of southwestern Pennsylvania at $14,167 an acre. 

The Atlas deal size was $1.7 billion, with RIL committing to a capital expenditure of $3.5 billion over 10 years. While Atlas will hold 60 per cent of the block and also the operatorship, RIL is expected to begin acting as development operator in certain regions in the coming years as part of the joint venture.

''Low operating costs and proximity to the US northeast gas markets combine to make the Marcellus one of the most economically attractive unconventional natural gas resource plays in North America,'' RIL had said in a statement at the time.

Shale gas accounts for 15 to 20 per cent of US gas production. Its production is expected to quadruple in the coming years. Companies across the globe are increasingly looking at investing in shale gas.

Shale gas is natural gas stored in organic-rich sedimentary rocks. It is considered an unconventional source as the gas may be attached to organic matter. The gas is contained in difficult-to-produce reservoirs that require special completion, stimulation or production techniques to achieve economic production.

Pioneer, a Fortune 500 company, is the largest operator in the Spraberry oil field in West Texas and the gas-rich Raton basin in Southeastern Colorado.

The company is one of the largest operators in the Hugoton gas field in Kansas and the West Panhandle gas field in the Texas Panhandle and has been the most active driller for several years in the South Texas Pawnee and Edwards Reef plays.

More than 90 per cent of its proven reserves and production are in low-risk, predictable basins in the US.

Pioneer holds 310,000 acre in Eagle Ford Shale with a gross resource potential of more than 11 trillion cubic feet equivalent.

The company has now drilled five highly-productive wells across its acreage at Eagle Ford Shale and has the development potential for 1,750 identified added locations in the acreage.