Pioneer Closes Sale of Canadian Assets
Pioneer Natural Resources has closed the sale of its Canadian subsidiary, Pioneer Natural Resources Canada Inc., to Abu Dhabi National Energy Company PJSC for cash proceeds of $540 million, subject to normal closing adjustments.
For the fourth quarter of 2007, Pioneer expects to record a gain on the sale in excess of $85 million and to pay little to no income taxes related to the sale. As previously disclosed, net results related to Pioneer’s Canadian operations prior to its sale will be reflected in Income from Discontinued Operations. Fourth quarter financial guidance and estimated 2007 all-in finding and development costs, provided by Pioneer in its press release and conference call presentation on November 6, 2007, remain unchanged.
As of December 31, 2006, Pioneer reported net proved reserves from its Canadian operations of 31.1 million barrels of oil equivalent. Net production from Canadian operations averaged approximately 8,600 barrels of oil equivalent per day during the third quarter of 2007.
Proceeds from the divestiture along with amounts that Pioneer expects to receive in connection with the initial public offering of limited partnership interests by its subsidiary, Pioneer Southwest Energy Partners L.P., will be used (i) to fund three recently announced acquisitions of oil and gas properties in its onshore U.S. growth areas – a $205 million acquisition of Raton Basin coal bed methane properties, a $90 million acquisition of Spraberry oil properties and a $150 million acquisition of gas properties in the Barnett Shale play and (ii) to reduce outstanding indebtedness.
"This divestiture allows us to enhance our financial flexibility, high grade our asset mix and redeploy capital into higher-return opportunities," stated Scott Sheffield, Chairman and CEO. "The Raton, Spraberry and Barnett Shale acquisitions increase our inventory of proved drilling locations to fuel future production growth and provide many additional low-risk step-out drilling opportunities with the potential to significantly increase proved reserves."
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Company: Abu Dhabi National Oil Company more info
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