Pioneer Natural Resources is selling its Alaska assets to raise capital for its unconventional oil operations in west Texas, the independent announced this morning.
The Dallas-based company plans to sell its Alaska subsidiary — Pioneer Natural Resources Alaska Inc. — to Caelus Energy Alaska LLC for $550 million in cash.
Pioneer expects the sale to close by the end of the year, retroactive to Oct. 1, 2013.
“I want to personally thank all of our Alaska employees for their hard work and dedication that contributed to our success in becoming the first independent E&P company to operate on the North Slope,” Pioneer Chairman and CEO Scott D. Sheffield said in a statement. “I am pleased that Caelus plans to build on this success.”
The Dallas-based Caelus is a “privately held diversified international energy group” with upstream and downstream assets, conventional and unconventional operations, and holdings in traditional and renewable energy, according to a description on its website.
“We are excited to enter the North Slope through the purchase of Pioneer’s assets. The current Pioneer Alaska team is very impressive and has the experience to develop the significant resource potential they have identified and help us grow the business in the future,” Caelus Energy Alaska President and CEO James C. Musselman said in a statement. “We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives, such as SB 21 (the More Alaska Production Act), that the state has put in place to encourage energy investment by independent oil and gas companies.”
The centerpiece of the sale is the Oooguruk unit.
Pioneer brought the nearshore North Slope oil field into production in mid-2008, less than five years after unitizing the leases. The development required Pioneer to build a six-acre gravel island and a subsea pipeline bundle connecting to onshore facilities.
In the years since Pioneer brought the field online, the company has been expanding Oooguruk by increasing reserve estimates of the initial Kuparuk and Nuiqsut pools, developing the shallower Torok pool, adding acreage along the southern end of the unit and using heftier completion techniques honed in Lower 48 unconventional plays. The company is currently permitting onshore facilities to complement its offshore facilities, as well as expansions to the gravel island that would accommodate expanded drilling.
See more in Nov. 3 issue, available online at 11 a.m., Friday, Nov. 1 at www.PetroleumNews.com