Pioneer Natural Resources Company has entered into purchase and sale agreements to sell all of its assets in the Hugoton field and the Barnett Shale for total cash proceeds of $495 million.
Scott D. Sheffield, Chairman and CEO, stated, “I want to personally thank all of our Hugoton and Barnett Shale employees for their strong efforts, dedication and the value they have created for our shareholders. The sale of these assets will allow us to strategically redeploy capital to our core, oil-related Spraberry/Wolfcamp assets in the Permian Basin of West Texas where we are successfully transforming the substantial resource potential we delineated in 2013 into strong production growth.”
Pioneer has entered into a purchase and sale agreement to sell all of its assets in the Hugoton field in Kansas to Linn Energy, LLC (NASDAQ: LINE) for cash proceeds of $340 million, subject to normal closing adjustments. The transaction has an effective date of July 1, 2014, and is expected to close by the end of the third quarter of 2014. The assets being sold represent all of Pioneer’s interests in the field, including all of its producing oil and gas wells, all of its interest in the Satanta gas processing plant and all other associated infrastructure.
The sale of Pioneer’s Hugoton assets is expected to result in a pretax noncash loss of approximately $20 million, which is expected to be recorded in the third quarter of 2014. The financial and operating results related to Pioneer’s Hugoton activities for the quarter ending September 30, 2014, and all prior periods presented in future filings, are expected to be reflected as discontinued operations. Net production from Hugoton averaged approximately 6,600 barrels oil equivalent per day during the first six months of 2014, consisting of gas and natural gas liquids.
Pioneer has entered into a purchase and sale agreement to sell all of its Barnett Shale assets in North Texas to an undisclosed private company for cash proceeds of $155 million, subject to normal closing adjustments. The transaction has an effective date of August 1, 2014, and is expected to close by the end of the third quarter of 2014.
The financial and operating results related to Pioneer’s Barnett Shale activities have been reflected as discontinued operations since the fourth quarter of 2013 when Pioneer announced that it planned to sell these assets. Net production from the Barnett Shale averaged approximately 10,300 barrels oil equivalent per day during the first six months of 2014, consisting of oil, natural gas liquids and gas.
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