Pioneer Natural Resources Company has signed an agreement to purchase half of Mariner Energy's interest in the Aconcagua Field and the Canyon Express pipeline project for $25.5 million. Pioneer will purchase an additional 12.5% working interest in the Aconcagua field (Mississippi Canyon 305), bringing its total interest in the field to 37.5%. Pioneer is also purchasing an additional interest of approximately 5.625% in the Canyon Express pipeline project, increasing Pioneer's interest to 23.5%. The Aconcagua field is one of three deepwater natural gas fields being jointly developed as part of the Canyon Express pipeline project which is scheduled to begin production in mid-2002 with the capacity to deliver 500 million cubic feet (Mmcf) of natural gas per day, or 117.5 Mmcf per day net to Pioneer.
The production to be acquired in this transaction has been hedged at $3.45 per mcf for 2003 through 2005.
Scott D. Sheffield, Chairman and CEO, stated, "We are pleased to have the opportunity to increase our interest in the Aconcagua field and the Canyon Express project, and by hedging the gas price during peak production, we have locked-in a very favorable return on investment. Through our interest in Canyon Express, we have the potential to increase our North American natural gas production by approximately 40% when the project comes on-stream next year."