Pioneer Natural Resources sells $827MM in equity

Pioneer Natural Resources sold 5,250,000 common shares at $157.52 each on June 15 to gross $827 million. The company also granted underwriters a 30-day overallotment option for 787,500 more common shares, which if fully exercised, along with proceeds from the main offering, would net Pioneer an estimated $925 million. Underwriters were Credit Suisse, JP Morgan, Deutsche Bank and Morgan Stanley.

Some of the proceeds will be used to fully fund its pending acquisition of oil and gas properties in the Midland Basin. Pioneer said it entered into a definitive agreement June 15 to buy about 28,000 net acres there for $435 million in cash. The acreage, in Martin, Midland, Upton, Reagan, Glasscock, Andrews, Dawson, Gaines and Howard counties, Texas, produces an aggregate 1,000 boe/d (70% oil).

The company said the pending acquisition along with improved outlook for oil prices will result in increasing its horizontal rig count by five to 17 from 12 in the northern Spraberry/Wolfcamp, with the first one to be added in September 2016 and two additional rigs to be added in each of October and November 2016.

The rest of the net proceeds will be used for general corporate purposes, including funding the drilling program on that acreage. Assuming the offering and full exercise of the greenshoe, Pioneer would have 169,601,781 common shares outstanding, making this offering about 3.7% dilutive to existing shareholders.


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