Pioneer Cashes In on Divestment Strategy
Pioneer Natural Resources announced the closing of a number of
asset and property sales yesterday totaling $286 million. The
Irving, TX-based exploration and production company said $256
million of the total will be used to reduce outstanding bank debt.
And the fire sale is not over. Additional transactions for the
sale of Texas and Canadian properties are anticipated to close
during the third quarter, bringing the value of total proceeds to
over $400 million. Susan Spratlen, a Pioneer spokesperson, said
once all the sales have closed, the company will have reduced its
debt to $1.75 billion. The company has a 12-month goal to reduce
its debt to $1.5 billion.
"By divesting non-strategic properties and streamlining
operations, we have reduced debt and improved operating margins and
will now focus on further maximizing the value of our core
properties. We move forward with one of the highest quality asset
bases in our industry as a foundation from which to execute our
growth strategy," Scott D. Sheffield, Pioneer's CEO said.
The key component of the transactions was a $245 million property
sale to Tulsa, OK-based Prize Energy Corp. (See Daily GPI, May 18). It included 400 fields with a
total production of 60 MMcf/d. Pioneer still has involvement with
these fields, however, as the company is a preferred shareholder of
Prize Energy and these fields are Prize's initial assets. Spratlen
also added the sale of these fields is just a small portion of their
Midcontinent production operations.
Pioneer also closed a West Texas property and seven Canadian
property sales yesterday for a total of $41 million.
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