Marubeni Offshore Production (USA) Inc., a subsidiary of Marubeni Corp., plans to acquire deepwater Gulf of Mexico assets from Pioneer Natural Resources USA Inc., a subsidiary of Pioneer Natural Resources Co., Dallas, (NYSE: PXD) for $1.3 billion in cash. The transaction includes Pioneer's interests in three producing projects, Falcon Corridor, Devils Tower and Canyon Express; two potential development projects, Ozona Deep and Thunder Hawk; and 88 exploration blocks. The properties had net daily production in December of approximately 38,000 BOE. Pioneer is retaining its 55% operated interest in Green Canyon blocks 299 and 300 where it drilled the Clipper discovery in October 2005. Approximately 92% of Pioneer's production and 98% of its proved reserves will now be onshore North America. Pioneer plans to use a portion of the proceeds to buy back the remaining $350 million of shares authorized under its previously announced $1-billion share-repurchase program. Proceeds will also be used to fund a portion of its 2006 capital budget and reduce short-term debt. Scott D. Sheffield, Pioneer chairman and chief executive, says, "We are pleased to have completed this transaction with Marubeni while retaining the opportunity to utilize our commercialization expertise to develop Clipper. With the completion of our divestitures and our commitment to complete the $1-billion share repurchase program, we are successfully delivering on the strategic initiatives we announced last September." The Houston Exploration Co., Houston, (NYSE: THX) plans to sell the Texas portion of its Gulf of Mexico assets to Dallas-based Merit Energy Co. for $220 million in cash. At year-end 2005, the assets included in this sale included proved reserves of approximately 58.5 billion cu. ft. of gas equivalent. As announced in November 2005, Houston Exploration is in the process of shifting its focus onshore the U.S. Houston-based Mariner Energy Inc. (NYSE: ME) has closed the acquisition of the offshore Gulf of Mexico operations of Forest Oil Corp., Denver, (NYSE: FST) for 0.8 Mariner share per Forest share in a deal valued at $1.17 billion. Forest will distribute the Mariner shares to its investors. Mariner is now a Gulf-focused E&P company, while Forest's assets are now wholly onshore. Eric Pipa, an analyst with Morgan Stanley, says Forest will now have proved reserves of 1.1 trillion cu. ft. of gas equivalent and production of 267 million equivalent per day. Its proved reserves are now concentrated onshore North America, including Canada, Alaska, its Western U.S. unit and its Southern U.S. unit. Its reserve-life index will now increase to 11.4 years, up from eight, Pipa says. Mariner has proved reserves of 615 billion equivalent and production of 319 million equivalent per day from the Gulf and the Permian Basin. This acquisition adds 344 billion cu. ft. of gas equivalent in proved reserves and production of 228 million cu. ft. of gas equivalent per day from Forest. Citigroup Corporate and Investment Banking and Credit Suisse First Boston LLC were financial advisors and JP Morgan Securities Inc. provided advisory services to Forest. Lehman Brothers Inc. was advisor and provided a fairness opinion to Mariner. Legal advisors included Vinson & Elkins LLP and Weil, Gotshal & Manges LLP for Forest and Baker Botts LLP for Mariner.
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