A. Lee Graham Reporter
Pioneer Natural Resources Co. has closed its previously announced transaction with Sinochem Petroleum USA LLC, a U.S. subsidiary of the Sinochem Group. The deal sees Dallas-based Pioneer sell 40 percent of its interest in about 207,000 net acres leased by the company in the Wolfcamp Shale play in West Texas for $1.7 billion. At closing, Sinochem paid to Pioneer $631 million in cash, of which $522 million was the up-front portion of the transaction price, with $109 million representing Sinochem’s 40 percent share of net expenditures in the joint interest area. Sinochem will pay the remaining $1.2 billion by carrying 75 percent of Pioneer’s share of future drilling and facilities costs until the drilling carry is fully utilized. Production from the joint interest area is approaching 10,000 barrels oil equivalent per day, and Sinochem will commence receiving its share effective immediately. Sinochem is acquiring 82,800 net acres of Pioneer’s leasehold, with Pioneer retaining 60 percent of its interest in the Wolfcamp and deeper horizons, and Sinochem receiving 40 percent of Pioneer’s interest. Pioneer will continue serving as operator and will conduct all leasing, drilling, operations and marketing activities in the joint interest area. The joint interest area spans certain portions of Upton, Reagan, Irion, Crockett and Tom Green counties. Pioneer Natural Resources Co. is an independent oil and gas exploration and production company. More information is available at www.pxd.com. Sinochem is a Chinese conglomerate whose core businesses comprise energy, agriculture, chemicals, real estate and financial services. More information is available at www.Sinochem.com.