DALLAS--(BUSINESS WIRE)--Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company has entered into purchase and sale agreements to sell all of its assets in the Hugoton field and the Barnett Shale for total cash proceeds of $495 million.
Scott D. Sheffield, Chairman and CEO, stated, “I want to personally thank all of our Hugoton and Barnett Shale employees for their strong efforts, dedication and the value they have created for our shareholders. The sale of these assets will allow us to strategically redeploy capital to our core, oil-related Spraberry/Wolfcamp assets in the Permian Basin of West Texas where we are successfully transforming the substantial resource potential we delineated in 2013 into strong production growth.”
Hugoton
Pioneer has entered into a purchase and sale agreement to sell all of its assets in the Hugoton field in Kansas to Linn Energy, LLC (NASDAQ: LINE) for cash proceeds of $340 million, subject to normal closing adjustments. The transaction has an effective date of July 1, 2014, and is expected to close by the end of the third quarter of 2014. The assets being sold represent all of Pioneer’s interests in the field, including all of its producing oil and gas wells, all of its interest in the Satanta gas processing plant and all other associated infrastructure.
The sale of Pioneer’s Hugoton assets is expected to result in a pretax noncash loss of approximately $20 million, which is expected to be recorded in the third quarter of 2014. The financial and operating results related to Pioneer’s Hugoton activities for the quarter ending September 30, 2014, and all prior periods presented in future filings, are expected to be reflected as discontinued operations. Net production from Hugoton averaged approximately 6,600 barrels oil equivalent per day during the first six months of 2014, consisting of gas and natural gas liquids.
Barnett Shale
Pioneer has entered into a purchase and sale agreement to sell all of its Barnett Shale assets in North Texas to an undisclosed private company for cash proceeds of $155 million, subject to normal closing adjustments. The transaction has an effective date of August 1, 2014, and is expected to close by the end of the third quarter of 2014.
The financial and operating results related to Pioneer’s Barnett Shale activities have been reflected as discontinued operations since the fourth quarter of 2013 when Pioneer announced that it planned to sell these assets. Net production from the Barnett Shale averaged approximately 10,300 barrels oil equivalent per day during the first six months of 2014, consisting of oil, natural gas liquids and gas.
Pioneer Natural Resources Company is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States. For more information, visit Pioneer’s website at www.pxd.com.
Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, completion of planned divestitures, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to perform the Company's drilling and operating activities, access to and availability of transportation, processing, fractionation and refining facilities, Pioneer's ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to Pioneer's credit facility and derivative contracts and the purchasers of Pioneer's oil, NGL and gas production, uncertainties about estimates of reserves and resource potential and the ability to add proved reserves in the future, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, including the possible impacts of climate change, the risks associated with the ownership and operation of the Company’s industrial sand mining and oilfield services businesses, and acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these statements except as required by law.