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This excerpt taken from the PXD 10-Q filed Nov 7, 2008. Nigeria. In June 2007, the Company entered into an agreement to divest its interest in a subsidiary (owned 59 percent by the Company) that held the interest in the deepwater Nigerian Block 320. The agreement was subject to governmental approval. The governmental approval was not obtained by the deadline and as a result, Pioneer terminated
the agreement. Also, as a result of due diligence efforts that emerged as part of the Company's compliance efforts, and with assistance from outside counsel, the Company determined that it could not, consistent with its legal obligations, fund or approve future operations in connection with Block 320. As a result, during the third quarter of 2007, the Company engaged in a process to withdraw from the production sharing contract relating to Block 320 and related agreements. As a
part of this process, the Company transferred the shares in its Nigeria subsidiary to an unaffiliated third party. During the nine months ended September 30, 2007, the Company recorded a $9.6 million impairment charge related to the exit from Nigeria, including a $2.6 million decrease to the impairment charge during the three months ended September 30, 2007.
PIONEER NATURAL RESOURCES COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2008 (Unaudited)
This excerpt taken from the PXD 10-K filed Feb 21, 2008. Nigeria. In June 2007, the Company
entered into an agreement to divest its interest in a subsidiary (owned 59 percent by
the Company, the "Nigeria Subsidiary") that held an interest in the deepwater Nigerian
Block 320. The agreement was subject to governmental approval. The governmental
approval was not obtained by the deadline and as a result, Pioneer terminated the
agreement. Also, as a result of due diligence efforts that emerged as part of the
Company's compliance efforts, and with assistance from outside counsel, the Company
determined that it could not, consistent with its legal obligations, fund or approve
future operations in connection with Block 320. As a
100
PIONEER NATURAL RESOURCES COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007, 2006 and 2005
result, during the third quarter of 2007 the Company engaged in a process to withdraw from the production sharing contract relating to Block 320 and related agreements. As a part of this process the Company disposed of its shares in the Nigeria Subsidiary to an unaffiliated third party. As a result, the Company no longer owns any interest in the Nigeria Subsidiary or Block 320 and will not fund or participate in any future operations in connection with Block 320. See Note S for additional information regarding the Nigerian impairment.
This excerpt taken from the PXD 10-Q filed Nov 9, 2007. Nigeria. A subsidiary of the Company joined
other companies in a production sharing contract covering the oil prospecting license
for Block 320 in deepwater Nigeria, gaining exploration rights from the Nigerian
National Petroleum Corporation. During the third quarter of 2007, the Company disposed
of all its shares in the subsidiary holding Block 320. As a result of the
disposition of the shares in the Nigerian subsidiary, the Company no longer
owns any interest in Block 320 and will not fund or participate in any future
operations in connection with Block 320.
During the second quarter of 2007, the Company participated in the drilling of the Ofuruma 1X well on the Devon Energy-operated Block 256 in deepwater Nigeria. The Ofuruma 1X well found only non-commercial oil and gas accumulations and fulfilled the Company's drilling commitments on Block 256. The Company is in the process of relinquishing its interest in Block 256. Once the relinquishment of Block 256 is complete and with the disposal of the Nigerian subsidiary, the Company will complete its exit from Nigeria. See Note P of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for specific information regarding Nigeria.
41
PIONEER NATURAL RESOURCES COMPANY
This excerpt taken from the PXD 10-Q filed Aug 9, 2007. Nigeria. During the second quarter of 2007,
the Company participated in the drilling of the Ofuruma 1X well on the Devon
Energy-operated Block 256 in deepwater Nigeria. The Ofuruma 1X well found only
non-commercial oil and gas accumulations and fulfills the Company's drilling
commitments on Block 256. The Company is in the process of relinquishing its interest
in Block 256.
A subsidiary of the Company joined other companies in a production sharing contract covering the oil prospecting license for Block 320 in deepwater Nigeria, gaining exploration rights from the Nigerian National Petroleum Corporation. The subsidiary, which holds a 51 percent interest in Block 320, is indirectly owned 59 percent by the Company and 41 percent by an unaffiliated third party. In July 2007, the Company announced that it had reached an agreement to divest its interest with respect to Block 320, subject to governmental approvals and certain other conditions. The purchaser was unable to obtain the requisite governmental approvals prior to the deadline set forth in the agreement (as extended) and as a result, the Company terminated the agreement.
As a result of on-going due diligence efforts that emerged as part of the Company’s compliance efforts, the Board of Directors of the Company with assistance from outside counsel determined that the Company cannot, consistent with its legal obligations, fund or approve future operations in connection with Block 320. In particular, the Board of Directors of the Company determined that based on recently obtained information, the Company could not continue its efforts with respect to Block 320 in a manner that is consistent with the U.S. Foreign Corrupt Practices Act. As a result, the Company is undertaking a process of withdrawal from the production sharing contract relating to Block 320 and related agreements. Although the Company believes that its actions are compliant with its contractual obligations, other parties may dispute the Company's right to withdraw from (or its position that it is not obligated to perform under) the production sharing contract and related agreements and may bring legal actions against the Company to enjoin the actions or recover damages they allege have been caused thereby.
This excerpt taken from the PXD 10-Q filed May 9, 2007. Nigeria. The Company currently plans to drill two exploratory wells offshore Nigeria during 2007. The first well on the Devon Energy-operated Block 256 is expected to spud in the second quarter of 2007 and the second well on the Pioneer-operated Block 320 is expected to spud in the second half of 2007.
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