In announcing a $891 million net loss in 1997 ($17.14 pershare), Pioneer Natural Resources said it plans to sell off 95% ofits domestic fields in 1998 to “unlock the value” contained in itslong-lived reserve base and acreage position. The fields represent10-12% of its total reserve base and the sale is estimated to bringin $375-$550 million. About 95% of its domestic fields generateonly 15% of the company’s total cash flow, said CEO ScottSheffield. “Most of Pioneer’s domestic value is attributable toabout 25 of the company’s 450 fields. The purpose of this programis to shed non-strategic properties, redeploying the proceeds intohigher return assets. Exact timing of the sales will depend onmarket conditions.” The vast majority of these fields were acquiredby Parker and Parsley prior to 1995.

Pioneer, the company created last August from the merger ofParker and Parsley and Mesa and enlarged significantly lastDecember with the purchase of Chauvco Resources, also plans toreduce its current eight operating divisions to five. Thereorganization and divestiture program is expected to reduce totallease operating and administrative expenses by about 12%.

The company reported a $904 million ($11.58/share) net loss inthe fourth quarter, which included an $863 million non-cash aftertax charge related to the Statement of Financial AccountingStandard No. 121, Impairment of Long-Lived Assets. During 1997, itsproved reserves more than doubled from 302 MMboe to 762 MMboe, withthe majority of the increase relating to the acquisitions of Mesaand Chauvco. Reserves include 2.3 Tcf of gas and 384 million bbl ofliquids. Natural gas sales in the fourth quarter were 365 MMcf/d.

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