Irving-based Pioneer Natural Resources said Thursday that it plans to sell its Barnett Shale holdings, developed since it entered the natural gas field in 2007.
Pioneer said it expects to use the proceeds, which it did not estimate, to trim debt.At the same time, it will redirect capital spending to what it called more profitable areas in West Texas and South Texas. It hopes to have a sale completed in the first quarter of 2013.Pioneer is the latest in a string of producers to sell Barnett Shale assets. Others include Fort Worth-based Titan Operating, WPX Energy (formerly part of Williams Cos.) and Encana Oil & Gas.In its latest investor presentation, Pioneer said it drilled 12 wells in the second quarter but went from two active drilling rigs to one "in response to low gas and NGL prices," referring to natural gas liquids. Its holdings of 155,000 gross acres are concentrated in northern Wise and southern Montague counties, which have attracted more attention in the past year because that portion of the Barnett field contains oil and natural gas liquids, which command higher prices than natural gas.Pioneer said Thursday that it is producing the equivalent of 7,000 barrels of oil a day from the Barnett."The sale of our Barnett Shale properties will allow us to strategically reallocate capital to our higher-return core assets," CEO Scott Sheffield said. He identified those areas as the Spraberry and Wolfcamp formations in the Permian Basin and the booming Eagle Ford Shale in South Texas.Investors liked the news, bidding up Pioneer's shares (ticker: PXD) by 3.4 percent to $99.31.In the most recent large Barnett Shale deal, Atlas Resource Partners bought Titan Operating Llc., a private Fort Worth-based producer, for about $200 million in July.It was Atlas' second acquisition in the field: In March, it acquired 12,000 acres and 110 producing wells from Carrizo Oil & Gas for $190 million. In Tarrant County, Titan had assets in Arlington and Northeast Tarrant County.In April, KKR Natural Resources made its third purchase of Barnett properties, paying $306 million for WPX Energy's holdings here and also in the Arkoma Basin of Arkansas and Oklahoma. Last year, KKR bought Barnett assets from ConocoPhillips and Carrizo.And in November, Canada's Encana Oil & Gas sold all its Barnett Shale holdings to EV Energy Partners and Enervest Ltd. for $1.2 billion.Low natural gas prices have reduced producers' interest in the field, but investors can find the properties attractive for their relatively predictable production and possible appreciation.Pioneer said it expects to open a data room in October -- a location where interested parties can inspect records and information about the properties.Jim Fuquay, 817-390-7552Twitter: @jimfuquayHave more to add? News tip? Tell us
