Pioneer Natural Resources to Acquire Approx. 28,000 Midland Basin Acres for $435 Million and to Add 5 Horizontal Rigs During the Second Half of 2016

Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that it has signed a purchase and sale agreement with Devon Energy Corporation to acquire approximately 28,000 net acres in the Midland Basin for $435 million, subject to normal closing adjustments. The acreage is located in Martin, Midland, Upton, Reagan, Glasscock, Andrews, Dawson, Gaines and Howard counties. Current net production is approximately 1,000 barrels of oil equivalent per day (BOEPD), with oil comprising approximately 70% of the production. Substantially all of the acreage is held by production.Substantially all of the 28,000 net acres is located in the core of the Midland Basin, with significant portions of the acreage being acquired offsetting existing Pioneer acreage. Of the core acreage being acquired, approximately 15,000 net acres are located in the Sale Ranch area in Martin County and northern Midland County where Pioneer has drilled its most productive Wolfcamp B wells. The majority of the Wolfcamp B acreage that Pioneer is acquiring in the Sale Ranch area sits directly below Pioneer’s Wolfcamp A acreage. The acquisition, combined with Pioneer’s existing footprint in the area, will add approximately 70 Wolfcamp B locations to Pioneer’s Sale Ranch area drilling inventory. These locations have an average lateral length of approximately 9,000 feet. The Company expects before-tax internal rates of return on these wells to be in excess of 50% and a before-tax net present value per well of approximately $10 million assuming current strip prices, an $8 million drill and complete cost, production performance that is expected to be similar to existing Sale Ranch horizontal wells (described below) that have comparable lateral lengths and a 10% discount rate. The leases associated with these additional locations account for approximately 7,000 net acres (of the 15,000 net acres acquired in this area), and Pioneer will have an average working interest of 95% in these wells.

Source: Pioneer Natural Resources Company to Acquire Approximately 28,000 Midland Basin Acres for $435 Million and to Add 5 Horizontal Rigs During the Second Half of 2016 | Business Wire

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