Bloomberg News

Pioneer Rises on Valuations for Permian Ventures: Dallas Mover

August 01, 2012

Pioneer Natural Resources Co. (PXD:US), the most active driller in Texas’s Permian Basin, rose after the company said it expects higher valuations than a competitor for joint ventures in shale oilfields.

Pioneer gained (PXD:US) 5.9 percent to $93.86 at the close in New York.

Pioneer, based in Irving, Texas, expects to receive higher prices for stakes in Permian Basin fields than Devon Energy Corp. (DVN:US), which said today it sold a 30 percent stakes in two shale oilfields to Sumitomo Corp. (8053) for $1.4 billion.

“Our acreage is a lot more proven and has a lot more upside,” Pioneer Chairman and Chief Executive Officer Scott Sheffield said today during a conference call with analysts. “It obviously should demand a much, much higher price.”

Pioneer can target as many as five producing deposits with each well, compared with one zone for wells in the area where Devon holds leases, he said.

Wells in the planned joint-venture area in the Wolfcamp shale play in the Permian Basin produce an average of the equivalent of 365 barrels of oil a day, according to the company.

Devon is getting about $6,500 an acre in its venture with Sumitomo, according to Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets LLC.

To contact the reporter on this story: Benjamin Haas in New York at bhaas7@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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Companies Mentioned

  • PXD
    (Pioneer Natural Resources Co)
    • $216.46 USD
    • -5.00
    • -2.31%
  • DVN
    (Devon Energy Corp)
    • $75.09 USD
    • -0.41
    • -0.55%
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