Mayer Brown has announced today that it is representing Sinochem Petroleum USA LLC, a US subsidiary of the Beijing-based Sinochem Group, on a $1.7bn transaction to purchase a 40 per cent undivided interest in approximately 207,000 net oil and natural gas leasehold acres held by Pioneer Natural Resources Company in the highly prospective horizontal Wolfcamp shale play within the Spraberry Trend of the Midland Basin in west Texas.
Under the agreement, Sinochem will acquire approximately 82,800 net acres of leasehold with development rights for all the horizontal Wolfcamp shale play and deeper horizons.
At closing, Sinochem will pay $500m in cash to Pioneer, subject to adjustment. In addition, Sinochem has agreed to fund 75 per cent of Pioneer’s share of drilling and completion costs until an additional $1.2bn has been funded. Closing of the transaction is expected in the second quarter of 2013, subject to customary governmental approvals.
The Mayer Brown team is led by partners Kevin Shaw, Bill Moss and Pablo Ferrante, with assistance from associates Andrew J Stanger, Jeff Dobbs, Jon Scott, Gabriel Salinas and Robin Clarkson with the firm’s global Oil and Gas practice group based in Houston.