PIONEER NATURAL RESOURCES COMPANY
NYSE : PXD

PIONEER NATURAL RESOURCES COMPANY

September 28, 2005 07:59 ET

PetroSA and Pioneer Natural Resources Reach Agreement on South Coast Gas Development

JOHANNESBURG, South Africa--(CCNMatthews - Sep 28, 2005) -

PetroSA and Pioneer Natural Resources Company (NYSE:PXD) announced today that they have reached an agreement to develop gas fields previously discovered offshore South Africa. The companies have signed a memorandum of understanding finalizing the terms for jointly developing the South Coast gas fields to provide feedstock for PetroSA's onshore gas-to-liquids (GTL) plant at Mossel Bay. The agreement is subject to customary approvals by the board of directors of each company, expected by the end of October.

Sipho Mkhize, PetroSA President and Chief Executive Officer, stated, "The development of South Coast gas will contribute towards the sustainability of the GTL refinery in Mossel Bay. I believe that this agreement will deliver good results."

Since 2003, PetroSA and Pioneer have been producing oil from the Sable field while reinjecting associated gas. The South Coast Gas project will include the subsea tie-back of gas from the Sable field and six additional gas accumulations to the existing production facilities on the F-A platform for transportation via an existing pipeline to the GTL plant. Production is expected to begin during the second half of 2007 and increase to an average of approximately 100 million cubic feet per day of gas and 3,000 barrels per day of condensate over the initial phase of the project through 2012. PetroSA will be the operator of the project with a 55% interest. Pioneer holds a 45% interest.

Scott Sheffield, Pioneer's Chairman and CEO, stated, "Pioneer is pleased to expand our valued partnership with PetroSA and play a part in progressing this important project to extend the availability of gas feedstock for their GTL plant, a key asset in South Africa's energy infrastructure."

PetroSA is the National Oil Company of South Africa, with activities in South Africa, Nigeria, Equatorial Guinea, Gabon and Sudan.

Pioneer is a large U.S. independent oil and gas exploration and production company with operations in the United States, Argentina, Canada and Africa. 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 News 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 are subject to a number of risks and uncertainties which 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, government regulation or action, third party approvals, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to 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, environmental and weather risks, acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.

Contact Information

  • PetroSA, Johannesburg
    Letebele Masemola-Jones, 021 929 3000 (South Africa)
    *27 21 929 3000 (international)
    or
    Pioneer Natural Resources Company, Dallas
    Investors:
    Frank Hopkins or Chris Paulsen, 972-444-9001
    or
    Media and Public Affairs:
    Susan Spratlen, 972-444-9001