Your current position: Home > Press Room > News Release

Sinochem Signed $1.7 Billion Horizontal Wolfcamp Shale Transaction Agreement With Pioneer Natural Resources

Date:2013-01-31     Source:Sinochem Group

On January 30th, Sinochem Group signed a definitive agreement with Pioneer Natural Resources Company (“Pioneer”, NYSE:PXD) whereby Sinochem Petroleum USA LLC, a wholly-owned subsidiary of Sinochem Group, will purchase a 40% undivided interest in approximately 207,000 net oil and natural gas leasehold acres (“joint interest area”) held by Pioneer in the southern Midland Basin Wolfcamp play, part of the larger Permian Basin. Under the agreement, Sinochem will acquire approximately 82,800 net acres of leasehold with development rights for all Wolfcamp and deeper horizons. Consideration for the sale includes $500 million in cash at closing, subject to adjustment. In addition, Sinochem has agreed to fund 75% of Pioneer’s share of drilling and completion costs until an additional $1.2 billion has been funded. Closing of the transaction is expected in the second quarter of 2013 subject to customary governmental approvals.
The highly concentrated assets are located in the heart of the horizontal Wolfcamp Shale play within the Spraberry Trend in the Midland Basin. The Wolfcamp Shale provides predictable geology, underpinned by abundant well control from thousands of vertical penetrations. Over 400 industry horizontal Wolfcamp Shale wells have been spud to-date, and over 35 active horizontal rigs highlight the potential of multiple target zones within the Wolfcamp horizon. Pioneer, as operator, will conduct all leasing, drilling, completion, operations, and marketing activities within the joint interest area. 

 Mr. Zhang Wei, Vice President of Sinochem Group, commented, “We are pleased to establish a long-term partnership with such a premier operator as Pioneer in the Permian Basin. This transaction provides Sinochem with valuable exposure to an attractive US oil shale play, further strengthening our foreign investment portfolio. With decades of potential, we look forward to successful joint development and continued growth of our relationship with Pioneer.”
Tudor, Pickering, Holt & Co. Securities, Inc. and Mayer Brown LLP acted as financial advisor and legal adviser to Sinochem respectively on the transaction.
Sinochem Group’s core businesses span globally over energy, agriculture, chemicals, real estate and financial services. For more information, visit Sinochem’s website.
Pioneer Natural Resources Company is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States. For more information, visit Pioneer’s website.

Sinochem Tendering Co Helps China's Railway Industry "Go Global" 2015-09-18
Sinochem Group Got A for 11 Consecutive Times in Business Performance Assessment 2015-07-03
Sinochem Group Signs Memorandum of Understanding for Strategic Cooperation with  2015-07-01
Sinochem Issued Seven-year Bonds to Raise CHF 250 Million 2015-05-26
Sinochem Issued Seven-year Bonds to Raise CHF 250 Million 2015-05-26