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What: Shares of Carrizo Oil & Gas
So what: GAIL India Ltd. is buying a 20% stake in a shale gas play in the Eagle Ford shale from Carrizo for $95 million, including $63.7 million in cash and $31.3 million in future costs. The company expects to invest $300 million in U.S. shale gas assets over the next five years.
Now what: The market applauded the move for the first few minutes of trading, but shares fell quickly after the opening bell. GAIL also expects to partner with Carrizo to explore shale gas plays in India and other countries, so this could be a long-term partnership. With a forward P/E of 5.4, Carrizo looks to be priced right, and this deal will help reduce risk and provide opportunities for the future.
Interested in more info on Carrizo Oil & Gas? Add it to your watchlist by clicking here.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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