Pioneer Natural Resources Co. (PXD) said Friday that it has closed its previously announced deal with Sinochem Petroleum USA LLC, a U.S. subsidiary of the Sinochem Group, to sell 40% of Pioneer's interest in about 207,000 net acres leased by the company in the highly prospective horizontal Wolfcamp Shale play in the southern portion of the Spraberry Trend Area Field for a total price of $1.7 billion.
At closing, Sinochem paid $631 million in cash to Pioneer, of which $522 million was the up-front portion of the deal price and $109 million was Sinochem's 40% share of net expenditures in the joint interest area from the December 1, 2012 effective date of the deal to the closing date.
Sinochem will pay the remaining $1.2 billion of the deal price by carrying 75% of Pioneer's share of future drilling and facilities costs until the drilling carry is fully utilized.
Production from the joint interest area is approaching 10,000 barrels oil equivalent per day, and Sinochem will commence receiving its share effective immediately.
Sinochem is acquiring 82,800 net acres of Pioneer's leasehold. Pioneer retains 60% of its interest in the Wolfcamp and deeper horizons, with Sinochem receiving 40% of Pioneer's interest.
Pioneer will continue as operator and will conduct all leasing, drilling, operations and marketing activities in the joint interest area.
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