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Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company has entered into a purchase and sale agreement with Caelus Energy Alaska LLC to sell 100% of the equity in Pioneer’s subsidiary, Pioneer Natural Resources Alaska, Inc., for cash proceeds of $550 million, subject to normal closing adjustments. The transaction has an effective date of October 1, 2013 and is expected to close by the end of the year.
Scott D. Sheffield, Chairman and CEO, stated, “The sale of our Alaska asset will allow us to strategically redeploy capital to our core, oil-related Spraberry/Wolfcamp asset. We are currently delineating multiple prospective horizontal targets (Wolfcamp, Jo Mill and Spraberry shales) across more than 600,000 gross acres in the northern part of this asset. We believe this area holds recoverable resource potential of more than three billion barrels oil equivalent. The current drilling program for the northern Spraberry/Wolfcamp calls for an increase from five horizontal rigs during the second half of 2013 to eight horizontal rigs in 2014. With the redeployment of capital from the Alaska asset sale to the northern Spraberry/Wolfcamp, we plan to increase the horizontal rig count to ten rigs in 2014 and will ramp up this rig count faster than originally anticipated thereafter.”
Mr. Sheffield continued, “I want to personally thank all of our Alaska employees for their hard work and dedication that contributed to our success in becoming the first independent E&P company to operate on the North Slope. I am pleased that Caelus plans to build on this success.”
The sale of Pioneer’s Alaska subsidiary is expected to result in a noncash loss of approximately $350 million which will be recorded in the fourth quarter of 2013. The financial and operating results related to Pioneer’s Alaska activities will be reflected as discontinued operations for the quarter ending December 31, 2013, and for all prior periods that will be presented in the Company’s December 31, 2013 Form 10-K. Net production from the Alaska subsidiary averaged approximately 4,000 barrels oil equivalent per day over the first nine months of 2013.