Pioneer Natural Resources Company participated in the drilling of the Ofuruma 1X well on the OPL 256 block (25% WI) in deepwater Nigeria. The well tested multiple objectives on a thrust structure located near the northeastern corner of the block, but found only non-commercial oil and gas accumulations. The Company has also reached an agreement to divest its interest in the OPL 320 block in deepwater Nigeria. The transaction is subject to governmental approvals and certain other conditions.
The Company expects to report a charge in its second quarter earnings associated with the unsuccessful Ofuruma 1X well and its agreement to divest its interest in the OPL 320 block. Also during the second quarter, the Company expects to recognize a cumulative tax benefit, associated primarily with its Nigerian activities, which will offset the charge..