Pioneer to Sell Tierra del Fuego Assets in Argentina

Neuquen Basin
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Pioneer Natural Resources Company (NYSE: PXD) plans to sell its non-operated position in oil and gas fields in Tierra del Fuego province, southern Argentina, the company said in a statement.

"We have been approached and have received very attractive expressions of interest," president and CEO Scott Sheffield said in a conference call on Thursday.

Pioneer has not disclosed a price range for the sale or the names of the interested parties.

The sale is part of Pioneer's wider asset divestment plan that includes assets in the deepwater Gulf of Mexico.

"High commodity prices and an active asset market have prompted Pioneer to pursue the potential divestiture of its properties in the deepwater Gulf of Mexico and southern Argentina," the statement said.

The divestments will allow Pioneer to reduce its risk profile and focus more on its core assets in North America. The company also plans to develop new exploration prospects in West Africa and Alaska.

Following the divestment of Tierra del Fuego, Pioneer's "staff will be refocused on Pioneer's remaining Argentine core assets in the Neuquén basin," Sheffield said.

Estimated production from Pioneer's Tierra del Fuego assets should average 12,000 barrels of oil equivalent a day in 2006, Sheffield said. These assets cover about 715,000 acres and hold about 50 million barrels of oil equivalent of current proved and probable reserves.

Pioneer's total natural gas production in Argentina rose about 21% to 133 million cubic feet of gas in the first half compared to 1H04 due to higher domestic demand.

Gas prices are rising gradually after they were frozen in early 2002 as part of the government's emergency measures following the devaluation of the peso.

However, Pioneer's oil production in Argentina fell 7% to 7,992 barrels a day in 1H05 compared to the same period of 2004.

Pioneer had nine onshore rigs working in Argentina at the end of the first half.

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