Sinochem Group has closed its previously announced $1.7 billion purchase of Wolfcamp assets in Texas from Pioneer Natural Resources Co.
PNR of Dallas sold 40% of its interest in 207,000 net acres in the horizontal Wolfcamp shale in the southern portion of the Spraberry trend.
At closing, Sinochem paid $631 million in cash of which $109 million was Sinochem’s 40% share of net expenditures in the joint interest area.
Sinochem will pay the remaining $1.2 billion by carrying 75% of PNR’s share of future drilling costs until the drilling carry is fully utilized.
Production from the joint interest area is approaching 10,000 boe/d, and Sinochem will commence receiving its share effective immediately, PNR said, adding it retains 60% interest in the Wolfcamp assets and will continue as operator.
The assets are in portions of Upton, Reagan, Irion, Crockett, and Tom Green counties in Texas. Pioneer retains its current working interests in all horizons shallower than the Wolfcamp horizon.
Sinochem is a Chinese business conglomerate that spans globally over energy, agriculture, chemicals, real estate, and financial services.