U.S. Markets closed

Pioneer Natural closes $1.7B deal with Sinochem

DALLAS (AP) -- Pioneer Natural Resources Co. said Friday that it closed the $1.7 billion sale of part of its stake in the Texas Wolfcamp Shale play to a Chinese company.

The sale, originally announced in January, includes 40 percent of Pioneer's interest in about 207,000 net acres in the play.

At closing, Sinochem paid $631 million in cash to Pioneer, of which $522 million was the up-front portion of the sale price and $109 million was to cover Sinochem's 40 percent share of expenses in the joint interest area from Dec. 1, the day the deal went into effect.

The remaining $1.2 billion will be paid in the form of future drilling and facilities costs.

Pioneer said production from the joint interest area is approaching 10,000 barrels oil equivalent per day, and Sinochem will begin receiving its share immediately.

Pioneer will keep 60 percent of its stake at Wolfcamp. The Dallas company will continue to serve as the operator and perform all leasing, drilling, completion, operations and marketing activities in the joint interest area, which includes parts of the Upton, Reagan, Irion, Crockett and Tom Green counties in Texas.

Pioneer shares fell $4.30, or 3 percent, to $140.17 in afternoon trading.