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Pioneer Signs Option to Increase Interest in Permian Basin Gas Processing System
DALLAS--(BUSINESS WIRE)--July 27, 2007--Pioneer Natural Resources Company (NYSE:PXD) ("Pioneer") today announced that it has entered into an agreement with Atlas Pipeline Partners ("Atlas") under which Pioneer has the option to purchase an additional 22% interest in the Spraberry Midkiff-Benedum gas processing system ("system") in West Texas for $230 million. Pioneer has the option to purchase the additional interest in increments over the next two years which would ultimately bring Pioneer's total interest in the system to approximately 49%. Atlas today closed its acquisition of approximately 73% interest in the system from Anadarko Petroleum Company and has been named operator of the system.
Pioneer's percentage of proceeds ("POP") contract for gas processed by the Midkiff-Benedum system has also been amended, extending the term of the contract ten years to 2022 and allowing for incremental increases in Pioneer's POP beginning in 2009.
The Midkiff-Benedum system handles gas gathering, field compression and processing for a majority of Pioneer's Spraberry production. During 2006, the system processed more than 138 million cubic feet of gas per day ("Mmcfpd"), the majority of which was supplied by Pioneer. Plant capacity is currently 173 Mmcfpd. Other facilities associated with the system include 12 field compressor stations and approximately 2,500 miles of gathering pipelines.
"We look forward to working with Atlas as the new operator of this key asset. By extending our gas processing contract and increasing the POP over time, we significantly increase the value of our Spraberry assets, while allowing Atlas to benefit from Pioneer's expansion in the field. Combined with the option to increase our interest in the Midkiff-Benedum system, this transaction is a great enhancement to our plans for steady growth in the Permian Basin. Looking forward, the interests in these midstream assets have the characteristics that also make them well suited for ownership by a master limited partnership," stated Scott Sheffield, Chairman and CEO.
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, Canada, 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 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
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