Buyout shop Avista Capital Partners has teamed up with Carrizo Oil and Gas Inc. to buy and develop properties in Ohio’s Utica shale. The Utica shale is thought to hold large amounts of crude oil and natural gas. Avista could contribute up to $130 million to the venture, Reuters reported. Carrizo will initially own a 10% stake in the venture, but holds options to increase its stake to 50%, Reuters wrote.
(Reuters) – Carrizo Oil and Gas Inc said it has formed a joint venture with private equity firm Avista Capital Partners to acquire and develop properties in the liquids-rich Utica Shale.
Oil and gas company Carrizo will initially own a 10 percent stake in the joint venture properties, while Avista will hold the remaining interest.
Houston-based Carrizo holds two options to increase its stake in the JV properties to 50 percent over the next 18 months.
Avista could contribute up to $130 million to the JV. The private equity firm may raise this amount by another $70 million, Carrizo said in a statement.
The JV has closed on its first acquisition of 15,000 net acres in eastern Ohio and northwestern Pennsylvania.
Carrizo will initially serve as operator of the joint venture properties and will provide certain management services to Avista related to the JV.
The Utica shale in Ohio is a massive field that is thought to hold vast quantities of crude oil and more valuable natural gas that has a high liquids content.
Carrizo’s shares closed at $23 on Thursday on Nasdaq. (Reporting by Swetha Gopinath in Bangalore; Editing by Viraj Nair)