Pioneer Natural Resources Co. of Dallas agreed to sell oil andgas properties in Texas and Canada for about $105 million, whichwill be used to retire Pioneer bank debt.

Pioneer signed a definitive agreement to sell South Texas gasproperties to CNG Producing Co. for $62.3 million. Closing isexpected Aug. 31 with a July 1 effective date. Pioneer also agreedto sell West Texas field for $8.2 million with closing anticipatedJune 30.

In Canada, Pioneer began divesting 68 non-core propertiesearlier this year. About half of the properties are now under eightpurchase and sale agreements with combined proceeds of about $35million. The agreements have effective dates within the secondquarter and are expected to close by the end of June. Five lettersof intent also have been signed for additional proceeds of $35million with closings anticipated early in the third quarter. Whilethe properties to be divested represent about 49% of Pioneer’sCanadian production, they represent only 24% of Canadian provedreserves. Pioneer is retaining eight core properties in Canada,more than 90% of which are operated by the company. Production fromthese properties is 82% gas with an approximate operating cost of$2.00/Boe.

“These divestitures are another significant step in theexecution of Pioneer’s strategy to streamline operations and reducebank debt,” said CEO Scott D. Sheffield. “Combined with thepreviously announced divestiture to Prize Energy Corp., Pioneer hassigned definitive agreements for the sale of approximately $350million of domestic and Canadian non-core properties. We anticipatethat additional domestic non-core property divestitures currentlyunder negotiation and the remaining $35 million of Canadiantransactions will bring total proceeds from asset sales to morethan $400 million by the end of the third quarter.”

As of March 31, Pioneer’s debt stood at about $2.2 billion, aspokeswoman said. “Through the course of asset divestitures thisyear, we plan to reduce that amount by $400 million.” Further debtreduction could come next year with more sales of non-core assetsand the application of excess cash flow to debt payment, she said.

Pioneer struck a deal in May with Tulsa, OK-based Prize Energyfor the sale of $245 million in oil and gas properties in onshoreTexas and Oklahoma (see Daily GPI May 18, 1999). The agreementfollowed the failure of a previous deal with Costilla Energy forthe same assets. Costilla was unable to close the deal.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.