|View printer-friendly version|
Pioneer Announces Fourth Quarter 2007 Net Gain of Approximately $50 Million from Unusual Items
DALLAS--(BUSINESS WIRE)--Dec. 21, 2007--Pioneer Natural Resources Company (NYSE:PXD) announced today that it expects fourth quarter net income to include an after-tax gain of approximately $50 million related to the net effect of several unusual items. These items principally include the previously announced gain on the sale of the Company's Canadian operations, partially offset by a charge related to the Company's withdrawal from the Clipper project in the deepwater Gulf of Mexico.
Pioneer recently announced that the Company expected to record an after-tax gain on the sale of its Canadian subsidiary in excess of $85 million during the fourth quarter of 2007. As a result of a favorable translation adjustment associated with the weakening U.S. dollar, this fourth quarter gain is now expected to be approximately $100 million, which will be reported in discontinued operations.
During 2005, the Company announced a discovery on its Clipper prospect in the deepwater Gulf of Mexico (Green Canyon Blocks 299 and 300). During 2006, the Company drilled two appraisal wells and began evaluating plans for potential development of the discovery. Projected capital costs for the project have doubled since the evaluation began. As a result, Pioneer no longer plans to pursue the development of the project and will recognize a noncash after-tax charge of approximately $48 million in the fourth quarter of 2007 to write off the project's carrying value. This completes the Company's exit from the deepwater Gulf of Mexico, with the majority of assets having been divested in 2006.
For the fourth quarter of 2007, Pioneer also expects to record a noncash after-tax charge of approximately $11 million to eliminate the remaining carrying value of its Equatorial Guinea assets and to recognize a tax benefit of approximately $9 million associated with the relinquishment of Pioneer's other remaining interests in West Africa.
With the divestiture of Canadian assets and the write-off of the remaining carrying value of interests in deepwater Gulf of Mexico and West Africa, Pioneer is focusing on growth in its core operating areas to achieve its goal of delivering 12+% compounded average annual production per share growth for 2007 through 2010, pro forma for the divestiture of Canada.
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, South Africa and Tunisia. For more information, visit Pioneer's website at www.pxd.com.
Except for historical information contained herein, the statements in this News Release about Pioneer Natural Resources Company are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer Natural Resources Company are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, third party approvals, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to replace reserves, implement its business plans (including its plan to repurchase stock) or complete its development projects as scheduled, access to and cost of capital, the assumptions underlying production forecasts, uncertainties about estimates of reserves, quality of technical data, environmental and weather risks, acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.
CONTACT: Pioneer Natural Resources Company
Copyright West LLC. Minimum 15 minutes delayed.