Pioneer to apply Tunisian proceeds to US plays
OMV AG will pay $866 million for the Tunisian oil and gas properties of Pioneer Natural Resources Co., Dallas, which plans to redeploy the proceeds to its Eagle Ford shale and Spraberry plays in the US.
By OGJ editors
HOUSTON, Jan. 6 – OMV AG will pay $866 million for the Tunisian oil and gas properties of Pioneer Natural Resources Co., Dallas, which plans to redeploy the proceeds to its Eagle Ford shale and Spraberry plays in the US.
The deal, expected to close in the 2011 first quarter retroactive to Jan. 1, is subject to normal closing adjustments. Net production from Pioneer’s Tunisian subsidiaries averaged 5,400 b/d of oil equivalent in 2010, 90% oil.
OMV said Pioneer Tunisia’s acreage has 38 million boe of proved and probable reserves and 21 million boe of possible reserves. It said the acreage offers considerable exploration upside and will complement OMV’s existing south Tunisian assets, Jenein Sud and Nawara.
Substantial field operating synergy is possible. Also, Pioneer Tunisia and OMV are partners in the South Tunisia Gas Project to build a 320-km gas pipeline from the Adam production concession to the city of Gabes by 2014. The Pioneer acquisition will facilitate the STGP decision-making process, OMV said.
Pioneer Tunisia’s interest in the Anaguid exploration permit and in the Mona/Durra production concession is subject to a preemption right of Pioneer Tunisia’s partner under the respective Joint Operating Agreement. Anaguid and Mona/Durra account for 13% of the purchase price. If Pioneer’s partner exercises the preemption right, the purchase price will be adjusted.
Pioneer said its most recent drilling program called for 30 rigs to be operating in the Spraberry in 2011, but with the sale to OMV it will hike that to 35 rigs by midyear.
Joint venture partners have approved an Eagle Ford acceleration plan that will result in an average 12 rigs operating during 2011 and more rigs the next 2 years. The initial plan called for a ramp-up to 10 rigs by the end of 2011.
The company expects the accelerated Eagle Ford program to boost its current compound annual production growth target of 15+% for 2011 through 2013 while maintaining a strong financial position.
Tunisia’s state ETAP and the Tunisian government are “one of the best joint-venture partners and host governments that Pioneer has had the privilege to work with,” said Scott D. Sheffield, Pioneer chairman and chief executive officer.