Pioneer Sells West Texas Spraberry Properties
Pioneer Natural Resources has sold certain oil and gas properties in the Spraberry field in West Texas to Pioneer Southwest Energy Partners L.P. (PSE) for $171.2 million in cash, subject to customary purchase price adjustments. The transaction also includes the assignment of certain 2009 through 2013 commodity price derivative positions. Based on the Company's current tax attributes, it does not expect to pay any cash taxes associated with the sale of properties and assignment of derivative contracts.
The sold properties have estimated proved reserves of approximately 18.9 million barrels oil equivalent, of which 37% are proved developed reserves and 63% are proved undeveloped reserves. Production from the sold properties is currently approximately 1,300 barrels oil equivalent per day. Of this amount, approximately 65% is oil, 20% is natural gas liquids and 15% is gas.
Scott D. Sheffield, Chairman and CEO, stated, "This transaction provides an attractive opportunity to sell assets and use the proceeds to further reduce debt and improve financial flexibility. Recognizing that PSE plans to initiate a two-rig drilling program during the fourth quarter of 2009 and that Pioneer owns 68% of PSE, this transaction effectively adds two rigs to the 10 to 12 rig drilling program Pioneer has planned in the Spraberry field for 2010 and will increase our total well count next year by approximately 50 wells to 300 to 350 wells."
"Approximately 50% of Pioneer's proved reserves are in the Spraberry field. The strong performance of PSE in the market since its IPO in May of 2008 continues to demonstrate the value of these long-lived oil reserves."
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