DALLAS--(BUSINESS WIRE)--Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company has entered into a purchase and sale agreement with Caelus Energy Alaska LLC to sell 100% of the equity in Pioneer’s subsidiary, Pioneer Natural Resources Alaska, Inc., for cash proceeds of $550 million, subject to normal closing adjustments. The transaction has an effective date of October 1, 2013 and is expected to close by the end of the year.
Scott D. Sheffield, Chairman and CEO, stated, “The sale of our Alaska asset will allow us to strategically redeploy capital to our core, oil-related Spraberry/Wolfcamp asset. We are currently delineating multiple prospective horizontal targets (Wolfcamp, Jo Mill and Spraberry shales) across more than 600,000 gross acres in the northern part of this asset. We believe this area holds recoverable resource potential of more than three billion barrels oil equivalent. The current drilling program for the northern Spraberry/Wolfcamp calls for an increase from five horizontal rigs during the second half of 2013 to eight horizontal rigs in 2014. With the redeployment of capital from the Alaska asset sale to the northern Spraberry/Wolfcamp, we plan to increase the horizontal rig count to ten rigs in 2014 and will ramp up this rig count faster than originally anticipated thereafter.”
Mr. Sheffield continued, “I want to personally thank all of our Alaska employees for their hard work and dedication that contributed to our success in becoming the first independent E&P company to operate on the North Slope. I am pleased that Caelus plans to build on this success.”
The sale of Pioneer’s Alaska subsidiary is expected to result in a noncash loss of approximately $350 million which will be recorded in the fourth quarter of 2013. The financial and operating results related to Pioneer’s Alaska activities will be reflected as discontinued operations for the quarter ending December 31, 2013, and for all prior periods that will be presented in the Company’s December 31, 2013 Form 10-K. Net production from the Alaska subsidiary averaged approximately 4,000 barrels oil equivalent per day over the first nine months of 2013.
James C. Musselman, President and CEO of Caelus Energy Alaska LLC, stated, “We are excited to enter the North Slope through the purchase of Pioneer’s assets. The current Pioneer Alaska team is very impressive and has the experience to develop the significant resource potential they have identified and help us grow the business in the future. We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives, such as SB 21, that the state has put in place to encourage energy investment by independent oil and gas companies.”
Pioneer Natural Resources Company is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States. For more information, visit Pioneer’s website at www.pxd.com.
Caelus Energy LLC is a privately held diversified international energy group focused on the identification, pursuit and development of unique opportunities across the energy sector. The company is involved in a wide range of energy projects including conventional and unconventional exploration and production projects. Headquartered in Dallas, Texas, Caelus Energy has an experienced management and technical team with domestic and international experience. Prior to establishing Caelus in 2011, Mr. Musselman was Chairman and CEO of Kosmos Energy and President and CEO of Triton Energy, both independent international oil and gas exploration companies. For more information, visit Caelus Energy’s website at www.caelusenergy.com.
Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to complete the Company’s operating activities, access to and availability of transportation, processing, fractionation and refining facilities, Pioneer's ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to Pioneer’s credit facility and derivative contracts and the purchasers of Pioneer’s oil, NGL and gas production, uncertainties about estimates of reserves and resource potential and the ability to add proved reserves in the future, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, including the possible impacts of climate change, the risks associated with the ownership and operation of an industrial sand mining business and acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the U.S. Securities and Exchange Commission (SEC). In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these statements except as required by law.
Cautionary Note to U.S. Investors -- The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than “reserves,” as that term is defined by the SEC. In this news release, Pioneer includes estimates of quantities of oil and gas using certain terms, such as “resource potential,” “estimated ultimate recovery,” “EUR” or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC’s definitions of proved, probable and possible reserves, and which the SEC's guidelines strictly prohibit Pioneer from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Pioneer. U.S. investors are urged to consider closely the disclosures in the Company’s periodic filings with the SEC. Such filings are available from the Company at 5205 N. O'Connor Blvd., Suite 200, Irving, Texas 75039, Attention: Investor Relations, and the Company’s website at www.pxd.com. These filings also can be obtained from the SEC by calling 1-800-SEC-0330.