DALLAS--(BUSINESS WIRE)--Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company has closed its previously announced transaction with Sinochem Petroleum USA LLC, a U.S. subsidiary of the Sinochem Group (“Sinochem”), to sell 40% of Pioneer’s interest in approximately 207,000 net acres leased by the Company (“joint interest area”) in the highly prospective horizontal Wolfcamp Shale play in the southern portion of the Spraberry Trend Area Field for a total price of $1.7 billion.
At closing, Sinochem paid $631 million in cash to Pioneer, of which $522 million was the up-front portion of the transaction price and $109 million was Sinochem’s 40% share of net expenditures in the joint interest area from the December 1, 2012 effective date of the transaction to the closing date. Sinochem will pay the remaining $1.2 billion of the transaction price by carrying 75% of Pioneer’s share of future drilling and facilities costs until the drilling carry is fully utilized. Production from the joint interest area is approaching 10,000 barrels oil equivalent per day, and Sinochem will commence receiving its share effective immediately.
Sinochem is acquiring 82,800 net acres of Pioneer’s leasehold. Pioneer retains 60% of its interest in the Wolfcamp and deeper horizons, with Sinochem receiving 40% of Pioneer’s interest. Pioneer will continue as operator and will conduct all leasing, drilling, operations and marketing activities in the joint interest area. The joint interest area covers defined portions of Upton, Reagan, Irion, Crockett and Tom Green counties in Texas. Pioneer retains its current working interests in all horizons shallower than the Wolfcamp horizon.
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.
Sinochem is a Chinese conglomerate whose core businesses span globally over energy, agriculture, chemicals, real estate and financial services. For more information, visit Sinochem’s website at www.Sinochem.com.
Except for historical information contained herein, the statements in this 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, 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, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to complete the Company's operating activities, access to and availability of transportation, processing and refining facilities, Pioneer's ability to implement its business plans or complete its development activities as scheduled, the financial strength of counterparties to Pioneer's credit facility and derivative contracts and the purchasers of Pioneer's oil, NGL and gas production, quality of technical data, environmental and weather risks, including the possible impacts of climate change, 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.