Pioneer exits Barnett, to focus on Permian

Oct. 16, 2014
Pioneer Natural Resources Co., Irving, Tex., has agreed to sell all of its Barnett shale assets in North Texas to an undisclosed private company for $155 million.

Pioneer Natural Resources Co., Irving, Tex., has agreed to sell all of its Barnett shale assets in North Texas to an undisclosed private company for $155 million.

During the first half of the year, the leasehold produced roughly 10,000 boe/d, primarily gas. The sale is part of an effort to increase the proportion of oil and NGL in Pioneer's production mix. The company first announced its intention to exit the Barnett shale in the fourth quarter of 2013.

The transaction is expected to close by the end of the third quarter and carry an effective date of Aug. 1.

Pioneer has also signed a separate agreement to sell its holdings in the gas-rich Hugoton field in Kansas to Linn Energy LLC for $340 million.

Linn will acquire 235,000 net acres, 1,200 producing oil and gas wells, a 51% interest in the Satanta gas processing plant, and other associated infrastructure. Net production from the leasehold averaged 6,600 boe/d of gas and NGL in the first half of 2014. That transaction is expected to close in the third quarter and carry an effective date of July 1.

The divestitures of gas-rich assets come as Pioneer turns its focus toward developing liquids-rich leasehold in West Texas that is prospective to the Spraberry and Wolfcamp formations.

Pioneer this year reserved $2.2 billion, or 66% of its capital spending budget, for developing its northern Spraberry and Wolfcamp acreage in the Permian basin. It will place 93 horizontal wells and 200 vertical wells on production there this year.

Pioneer's annual capital spending budget also includes $205 million for the company's Southern Wolfcamp joint venture area, $545 million for the Eagle Ford shale in South Texas, and $100 million for other assets.