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Pioneer Cashes In on Divestment Strategy

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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