Pioneer Natural Resources Announces Divestiture of Pioneer Pumping Services Assets and Long-Term Agreement with ProPetro
Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the
Company”) today announced that it has entered into an agreement with
ProPetro Holding Corp. (NYSE:PUMP) (“ProPetro”) by which ProPetro
will become a strategic long-term service provider to Pioneer providing
pressure pumping and related services for up to 10 years. Under the
agreement, Pioneer will divest its pressure pumping assets (“PPS”) to
ProPetro in exchange for total consideration of $400 million comprised
of $110 million of cash and 16.6 million shares of PUMP common stock
representing approximately 17% ownership in ProPetro following issuance.
The transaction is expected to close during the fourth quarter of 2018,
subject to the satisfaction of customary closing conditions, including
regulatory approval.
Timothy L. Dove, Pioneer President and CEO, stated, “We are very pleased
to announce our agreement with ProPetro that provides Pioneer with
dedicated capacity from the leading pressure pumping service provider in
the Permian Basin. Their robust operational track record aligns with our
commitment to being the most efficient, low-cost Permian operator. We
have had a strong relationship with the ProPetro team for many years,
and this contract solidifies their position as a key partner in our
development program. The long-term nature of this agreement will benefit
both companies.
“I would also like to personally thank all of the dedicated employees of
Pioneer Pumping Services. Their unrelenting commitment to safety,
efficiency and execution has underpinned our success in the Permian
Basin and we are excited to have them continue working on Pioneer
locations for years to come in our partnership with ProPetro.”
Dale Redman, ProPetro co-founder and CEO, stated, “We could not be more
excited about the opportunity to expand our relationship with Pioneer
through this transformational transaction. The combination of ProPetro
and Pioneer Pumping Services will result in the largest and most
efficient pressure pumping provider in the Permian Basin. As important
is our strategic long-term service agreement, and we look forward to
continuing our close partnership with Pioneer as they further develop
their extensive resource base in the Permian Basin.
“We are proud to welcome our new teammates from Pioneer Pumping Services
as the combination with ProPetro will create an unmatched workforce in
the industry. Finally, we want to thank our people, our customers, our
supply chain partners, and the Permian Basin community for their
continued long-term support of the Company and our efforts.”
PPS assets include 8 fleets with 510,000 hydraulic horsepower (HHP) and
related facilities. Upon closing of the transaction, ProPetro will have
28 fleets with 1,415,000 HHP operating in the Permian Basin. This
agreement is expected to increase ProPetro’s scale in the Permian Basin
and expand its leading operational track record while allowing Pioneer
to improve capital efficiency and long-term cost competitiveness in its
core operations.
Pioneer is a large independent oil and gas exploration and production
company, headquartered in Dallas, Texas, with operations in the United
States. For more information, visit www.pxd.com.
ProPetro is a Midland, Texas-based oilfield services company providing
pressure pumping and other complementary services to leading upstream
oil and gas companies engaged in the exploration and production of North
American unconventional oil and natural gas resources. For more
information concerning ProPetro, visit www.propetroservices.com
Except for historical information contained herein, the statements in
this news release are forward-looking statements that are made pursuant
to the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements and the business
prospects of Pioneer are subject to a number of risks and uncertainties
that may cause Pioneer's actual results in future periods to differ
materially from the forward-looking statements. These risks and
uncertainties include, among other things, volatility of commodity
prices, government regulation or action, the ability to obtain approvals
from third parties and negotiate agreements with third parties on
mutually acceptable terms, completion of planned divestitures and
litigation. These and other risks are described in the Company's Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings
with the Securities and Exchange Commission. In addition, the Company
may be subject to currently unforeseen risks that may have a materially
adverse impact on it. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward-looking statements. Pioneer
undertakes no duty to publicly update these statements except as
required by law.
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