EXHIBIT 99.2
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Announces Acquisitions, Intention to Offer
Common Stock Under Shelf Registration Statement
Dallas, Texas, April 9, 2002 -- Pioneer Natural Resources Company
("Pioneer")(NYSE:PXD) (TSE:PXD) today announced that it has purchased an
additional 30% working interest ("WI") in the Falcon field development and
associated acreage in the deepwater Gulf of Mexico for $55 million. Pioneer has
also signed an agreement to purchase the assets and remaining 23% of the rights
it doesn't already own in its core area West Panhandle Field in the Texas
Panhandle and is in final negotiations on another agreement to acquire the
related West Panhandle field gathering system for a total purchase price of $138
million. Pioneer also announced that it intends to publicly offer and sell
10,000,000 newly issued shares of its common stock to fund the acquisitions.
Pioneer also expects to grant the underwriters of the offering an option to
purchase up to 1,500,000 additional shares of common stock to cover
over-allotments, if any.
Falcon Acquisition
Pioneer has purchased from Mariner Energy, Inc. ("Mariner") a 25% WI in the
Falcon field development located in the East Breaks 579, 580 and 623 blocks, in
approximately 3,400 feet of water, 100 miles east of Corpus Christi, Texas.
Associated with the purchase, Pioneer will become operator of the Falcon project
within 30 days. This will be Pioneer's first operated deepwater Gulf of Mexico
project. In addition, Pioneer is acquiring an additional 25% WI from Mariner in
11 blocks that surround the Falcon discovery and that were acquired jointly by
the companies in August 2001. Pioneer plans to drill exploration prospects that
have already been identified on these blocks in an effort to enhance production
through the Falcon development system. The Mariner transaction has an effective
date of January 1, 2002. Pioneer has also recently acquired a 5% WI in the
Falcon field development from another minority owner with an effective date of
July 1, 2001.
As a result of these transactions, Pioneer will own a 75% WI and operate the
Falcon field development and related exploration blocks. Through the
acquisitions, Pioneer expects incremental initial gas production of
approximately 50 million cubic feet per day ("MMcfd") commencing in the first
quarter of 2003. Pioneer will be assuming approximately $31 million of
additional 2002 capital requirements related to the 30% WI it is acquiring in
the Falcon transactions. Pioneer has implemented new natural gas hedges for 40
MMcfd for the first three years of production related to the acquisitions at an
average price of $3.60 per Mcf.
West Panhandle Acquisition
Pioneer has also signed a definitive purchase and sale agreement with Colorado
Interstate Gas Company and CIG Production Company, L.P., subsidiaries of El Paso
Corporation ("CIG"), to acquire CIG's working interest and other rights in the
gas produced from the West Panhandle gas field and CIG's 100% entitlement to all
field fuel. Pioneer is also in final negotiations with Colorado Interstate Gas
Company to acquire CIG's wholly-owned gathering system related to the West
Panhandle field. In connection with the settlement of a capital cost obligation
related to these assets, Pioneer expects to recognize an extraordinary charge of
approximately $14 million for the early extinguishment of this obligation in the
quarter in which the transaction closes. Annual interest savings of $9 million
would be realized as a result of settling the capital cost obligation. In
addition, Pioneer is acquiring a 100% WI from El Paso Production GOM Inc. in ten
deepwater Gulf of Mexico blocks that surround the Falcon discovery. The CIG
transactions are subject to various closing conditions including consents to
assign and certain regulatory approvals.
As a result of these transactions, Pioneer will own a 100% WI in the West
Panhandle field and gathering system. Pioneer expects incremental production of
approximately 20 MMcfd from this transaction. Pioneer anticipates continuing its
successful program of horizontal drilling in the field, where it has identified
approximately 330 drilling locations.
Scott D. Sheffield, Chairman and CEO, stated, "We are very excited about these
acquisitions, as they further our strategy of acquiring assets in our own
backyard, high-quality assets that we know best. We are acquiring 137 Bcf of
proved reserves at an acquisition cost of $0.93 per Mcf, settling related net
obligations and purchasing a gathering system. We are looking forward to
operating the Falcon project, a cornerstone asset in our deepwater Gulf of
Mexico portfolio. Falcon will significantly enhance our gas production when it
comes on stream next year, and as we explore the 24 prospective blocks that we
will control in the area after these transactions, we expect to add even more
value to the project. The West Panhandle field is a legacy long-lived gas field
that has been a foundation asset for Pioneer. Owning and operating 100% of the
field will allow us to drill wells more economically and implement significant
cost efficiencies. These transactions, in combination with the planned issuance
of ten million new common shares to fund them, are anticipated to be accretive
to cash flow per share in 2003 and accretive to Pioneer's net asset value per
share."
The lead managers of the offering are Credit Suisse First Boston, Banc of
America Securities LLC, JPMorgan and Lehman Brothers Inc. Deutsche Bank
Securities Inc., Friedman Billings Ramsey, Howard Weil, Johnson Rice & Company,
L.L.C., Petrie Parkman & Co., Raymond James and Wachovia Securities are acting
as co-managers. A copy of the preliminary prospectus supplement and prospectus
relating to the offering may be obtained, when available, from the Prospectus
Department of Credit Suisse First Boston, Eleven Madison Avenue, New York, NY
10010. These documents will be filed with the Securities and Exchange Commission
("SEC") and are available over the Internet at the SEC's website at
http://www.sec.gov.
The shares will be offered and sold by means of a prospectus relating to a shelf
registration statement that was previously filed and declared effective. This
press release shall not constitute an offer to sell or a solicitation of an
offer to buy shares of Pioneer common stock. The prospectus shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there be any
sale of these securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
Pioneer also issued press releases today providing an update on exploration
activities and updating its first quarter of 2002 outlook, recent Argentine
developments and hedging activities.
Pioneer is a large independent oil and gas exploration and production company
with operations in the United States, Canada, Argentina, South Africa, Gabon and
Tunisia. Pioneer's headquarters are in Dallas. For more information, visit
Pioneer's website at www.pioneernrc.com.
Except for historical information contained herein, the statements in this Press
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 Natural Resources
Company 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 oil and gas prices, product supply and demand,
competition, government regulation or action, foreign currency valuation
changes, foreign government tax and regulation changes, litigation, the costs
and results of drilling and operations, Pioneer's ability to replace reserves,
implement its business plans, or complete its development projects as scheduled,
access to and cost of capital, uncertainties about estimates of reserves,
quality of technical data, and environmental risks. These and other risks are
described in Pioneer's 10-K and 10-Q Reports and other filings with the
Securities and Exchange Commission.