Dallas-based Pioneer Natural Resources Co. has signed agreements worth $177 million with two undisclosed parties to purchase additional assets in two key U.S. onshore core areas, the Permian Basin and South Texas.
In total, the assets hold approximately 70 MMboe of “substantially undeveloped” proved reserves with daily production of approximately 1,800 boe and an estimated 800 undrilled locations. The transactions are expected to close within 30 days.
“We already own a minority interest in more than 80% of the producing wells and development locations included in these acquisitions…,” said CEO Scott D. Sheffield. “These transactions provide new opportunities that are an excellent fit with our existing assets, allowing us to leverage our expertise, consistent with our long-standing core area acquisition strategy.”
Pioneer expects to invest $400 million over the next five years to develop the acquired reserves, accelerating the pace of drilling in each of these two core areas beginning later this year. It said that production from the acquired assets could exceed 10,000 boe/d once the reserves are fully developed.
U.S. onshore reserves represent approximately 75% of Pioneer’s proved reserve base, and its onshore holdings are concentrated in four key fields.
The long-lived Hugoton natural gas field is located in southwest Kansas, and Pioneer has a working interest in approximately 1,200 wells, most of which are company-operated. Pioneer also is one of the largest operators in the West Panhandle gas field, where it has an interest in 600 wells and continues to expand the field by drilling horizontal wells into formations that are less than 3,500 feet deep. Pioneer controls the wells, production equipment, gathering system and gas processing plant for its portion of the field. Its Spraberry field covers eight West Texas counties, and it produces sweet crude and gas from formations between 6,700-9,200 feet deep in about 3,300 wells.
As a result of the recent merger with Evergreen Resources, Pioneer also holds key acreage in the Rocky Mountains’ Raton Basin, where it has about 1,000 producing gas wells and the opportunity to drill another 1,000-1,500 wells.
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