OMV Purchases Pioneer's Tunisian Assets for $866MM
Pioneer Natural Resources has entered into a purchase and sale agreement with a wholly-owned subsidiary of OMV to sell all of the stock of Pioneer's Tunisia subsidiaries for cash proceeds of $866 million, subject to normal closing adjustments. The transaction has an effective date of January 1, 2011 and is expected to close during the first quarter of 2011.
"I want to personally thank all of our London and Tunisian employees for the value that they have created for our shareholders since we acquired the Tunisia assets nine years ago. I also want to thank ETAP (Entreprise Tunisienne d'Activités Pétrolières) and the Tunisian government for being one of the best joint-venture partners and host governments that Pioneer has had the privilege to work with," said Scott D. Sheffield, Chairman and CEO.
The financial and operating results related to Pioneer's Tunisia activities will be reflected as discontinued operations for the quarter and year ending December 31, 2010 and all prior periods presented in the Company's December 31, 2010 Form 10-K. Net production from the Tunisia subsidiaries averaged approximately 5,400 barrels oil equivalent per day during 2010.
Mr. Sheffield continued, "The sale of Tunisia will allow us to strategically redeploy capital to our high-return, oil-related core assets in the U.S. We plan to utilize the proceeds from the divestiture to accelerate drilling in the Spraberry and the Eagle Ford Shale. Our most recent drilling program called for 30 rigs to be operating in the Spraberry during 2011, but we now plan to increase the rig count to 35 rigs by mid-year. In the Eagle Ford Shale, an acceleration plan has now been approved by the joint-venture partners, which will result in an average of 12 rigs operating during 2011 as compared to the initial development plan that ramped up to 10 rigs by the end of 2011. This accelerated drilling program, which is planned to ramp up further in 2012 and 2013, is expected to increase the Company's current compound annual production growth target of 15+% for the 2011 through 2013 period while maintaining our strong financial position. Additional details regarding the accelerated program, including Pioneer's 2011 capital budget, will be discussed during our fourth quarter 2010 earnings call on February 8."
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