Sinochem Buys Stake in US Shale Play

China’s Sinochem has bought 40% interest in Pioneer Natural Resources’ Wolfcamp shale play in the southern portion of the Spraberry Trend Area Field in Texas for a total price of $1.7 billion.

Under the agreement, Sinochem will acquire approximately 82,800 net acres of leasehold held by Pioneer for all Wolfcamp depths and deeper horizons. Pioneer retains 60% of its interest in the Wolfcamp depths and deeper horizons, with Sinochem receiving 40% of Pioneer’s interest. Pioneer will continue as operator and will conduct all leasing, drilling, completion, operations and marketing activities in the joint interest area.

Pioneer has successfully drilled and completed 39 horizontal wells in theWolfcamp Shale joint interest area through December 31, 2012. Of these 39 wells, 22 wells were on production and 4 additional wells were flowing back. Of the 22 wells on production, 20 wells were completed in the B interval and 2 wells were completed in the A interval. Pioneer’s net horizontal Wolfcamp Shale production in the joint interest area averaged approximately 2,000 barrels oil equivalent per day (BOEPD) in 2012, with a year-end exit rate of approximately 5,000 BOEPD.