Pioneer Natural Resources is again shopping its Barnett Shale properties, something it did in 2012 without results. And the effort is already proving costly.
In its 2013 earnings report released last month, the Irving-based producer disclosed that it shaved $189.5 million off the book value of its holdings in the North Texas field as it re-evaluated the matter in the fourth quarter.
According to Texas Railroad Commission data, Pioneer was the No. 12 producer in the Barnett last year.
It’s the second big write-off, called an impairment, that Pioneer has taken on its Barnett holdings, which are concentrated in the field’s northwestern reaches, where more crude oil and natural gas liquids are produced. In 2012, when it previously put the properties up for sale and not long after natural gas prices bottomed out at a 10-year low, it took a $532.6 million impairment.
Impairments are taken when a company’s estimate of the present value of its assets are less than what it paid for the assets. Many natural gas producers have taken impairments since the price of gas plummeted from more than $13 per 1,000 cubic feet in 2008 to below $2 in 2012. It’s now trading around $4.50.
Pioneer dropped its first effort to sell the Barnett properties in January 2013. At that time, it said it had 181 producing wells.
Pioneer started 56 wells in the field last year and spent $201 million in 2013, according to its latest earnings report. It said its Barnett properties averaged daily production last year of 23.4 million cubic feet of natural gas, 3,193 barrels of natural gas liquids and 1,492 barrels of oil.
After a flurry of transactions in 2011 and 2012, sales of Barnett properties have slowed.
Last year’s deals saw Quicksilver Resources sell a 25 percent stake in its local holdings for $485 million to Tokyo Gas, while Carrizo Oil and Gas exited the field entirely with its third sale in three years. EnerVest, which bought the last of the Carrizo holdings, also made a smaller acquisition from an unnamed seller in November.