Pioneer Natural Resources signed a contract to sell a $266 million acreage package in Martin Country, Texas, to an undisclosed buyer, according to a new article by World Oil.
Roughly 1,500 barrels per day of crude are currently produced on the land. By selling the productive land, Pioneer has continued its recent pattern of “high-grading” by selling its most valuable assets and keeping the rest.
The sale, set to go into effect on January 1, 2017, will be subject to normal closing adjustments, which will occur by the end of April.
Pioneer is a Texas-based shale oil and gas driller. Its CEO, Scott Sheffield, said in Houston earlier this month that oil prices could fall as low as $40 if the Organization of Petroleum Exporting Countries (OPEC) does not agree to cut production for at least another six months.
"If OPEC does not extend, we will see $40 oil," Sheffield said. "That will have a major impact on future investments in the U.S. shale business."
The U.S. domestic rig count has seen consistent growth over the past 18 months due to the stability of oil prices in the $55 to $60 range.
Saudi Arabia, the de facto leader of OPEC, has warned shale drillers like Pioneer they should limit heightened production to protect the price gains made at the expense of the bloc and other non-U.S. partners.
Saudi energy minister Khalid al-Falih said oil investors should not engage in “wishful thinking that OPEC or the kingdom will underwrite the investments of others at our own expense and long-term interests. Saudi Arabia will not allow itself to be used by others.”
So far, engagement from OPEC officials has been received well in the U.S. "They’re trying to understand our business model," Pioneer’s Sheffield said of OPEC. "I think they’re trying to understand more about our ability to produce, what the cost structure is and what’s going to happen over the next several years."
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…