Pioneer Natural Resources Co. of Dallas announced thetermination of a purchase and sale agreement between Pioneer andCostilla Energy Inc. for the sale of certain oil and gas propertiesto Costilla. As a result of Costilla’s failure to close the April 1agreement, Pioneer has received one million additional shares ofCostilla common stock as liquidated damages.
“We are clearly disappointed that Costilla was not able to closethis transaction, but we remain committed to the divestiture ofapproximately $500 million of non-core, non-strategic properties,”said Scott D. Sheffield, Pioneer CEO. “We will immediately executeour contingency plan to re-market these properties. Strengtheningoil and natural gas prices and the considerable level ofthird-party interest in these properties combine to support ourconfidence that re-marketing will be successful. Under ourre-marketing plan, we anticipate closing new transactions relatedto these properties by the end of the third quarter.”
Pioneer also said it has signed a letter of intent with anundisclosed third party, providing for the sale of certainunrelated gas properties in South Texas, with existing productionand exploration potential, for consideration of $65 to $70 million.Closing is anticipated by the end of the second quarter.
Pioneer is also soliciting bids on several divestiture packagesof Canadian non-core gas and oil properties with bids due April 29and mid-May. The divestitures are expected to close by the end ofthe second quarter with anticipated proceeds of $60 to $80 million.
Southern Energy Inc., a unit of Southern Company, completed its$801 million purchase of power plants totaling 3,065 MW of capacityfrom San Francisco-based Pacific Gas and Electric Co. PG&E. ThePG&E stations, fueled mostly by natural gas, were sold in acompetitive bidding process Nov. 24.
Southern Energy is focusing its efforts to buy or build powerplants in four U.S. regions where it says generating assets arenecessary to be successful as an energy marketer – theCalifornia/Desert Southwest, Texas/Louisiana, the Midwest and theNortheast United States. The company will own power plants in allfour areas by October. With the California transaction, SouthernEnergy now owns seven gas-fired generation units at the Pittsburgstation and two at the Contra Costa station near the San FranciscoBay Delta, along with a gas-fired unit and three jet fuel-poweredcombustion turbines at Southeast San Francisco’s Potrero plant.
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