After unloading stakes in the Eagle Ford shale in Texas, Pioneer Natural Resources said it plans to boost drilling in an emerging area in the west of the state.
Pioneer and its partners at Reliance Holding sold pipeline operations in the Eagle Ford shale basin in Texas to a subsidiary of Enterprise Products Partners for $2.15 billion.
"The sale … will further improve our already strong balance sheet and allow us to strategically redeploy capital to our core, oil-rich Spraberry/Wolfcamp asset in the Permian basin of West Texas." Pioneer Chairman and Chief Executive Officer Scott Sheffield said in a statement.
A report from Bentek, the forecasting unit of energy news agency Platts, found oil production in the Permian basin increased 50 percent and natural gas production increased 30 percent in the last three years.
Pioneer's assets in Eagle Ford include 460 miles of gas-gathering pipelines and facilities that can process as much as 780 million cubic feet of natural gas. For Enterprise, the acquisition will "bolt on" to its existing Eagle Ford oil and natural gas networks in place.
For Pioneer, it said it's shifting its focus to the Spraberry/Wolfcamp basin with the aim of adding more wells during the second half of the year.
"We have already added two horizontal rigs in the northern Spraberry/Wolfcamp and plan to add an average of two horizontal rigs per month in this area over the remainder of 2015 as long as the oil price outlook remains constructive," Sheffield said.
The move follows a downturn in spending on drilling activity in a weakened crude oil market. A June report from consultant group IHS finds the west Texas basin has the potential to support steady production even in the low oil price era.
The U.S. Energy Information Administration ranks the shale basin within the Permian reserve area among the more lucrative in the nation.
