IRVING, Texas (AP) -- Pioneer Natural Resources is selling a portion of its interest in its stake in the Texas Wolfcamp Shale play to a Chinese company in a $1.7 billion deal.
The transaction includes 40 percent of Pioneer's interest in about 207,000 net acres in the play.
Pioneer said Wednesday that the Sinochem Group will pay $500 million in cash. The remaining $1.2 billion will be paid in the form of future drilling and facilities costs. Pioneer can draw those funds for six years, with an option to extend that period under certain circumstances.
The company's stock gained $3.27, or 2.8 percent, to $120.64 in morning trading. The shares hit a 52-week high of $123.86 earlier in the session.
Pioneer will keep 60 percent of its stake at Wolfcamp. The Dallas company will continue to serve as the operator and perform all leasing, drilling, completion, operations and marketing activities in the joint interest area, which includes parts of the Upton, Reagan, Irion, Crockett and Tom Green counties in Texas.
Pioneer Natural Resources Co. and Sinochem agreed to jointly develop as many as 86 horizontal wells during 2013, 120 wells in 2014 and 165 wells in 2015.
Pioneer has successfully drilled and completed 39 horizontal wells in the Wolfcamp Shale joint interest area through December 31.
The deal is expected to close in the second quarter.
Pioneer also announced Wednesday that it no longer plans to sell its properties in the Barnett Shale in Texas. In September, the company said that it was trying to sell its properties there in order to lower debt and focus operations on more productive areas.
Pioneer, based in Irving, Texas, began operating in the Barnett Shale in 2007.
The company said that it received several bids, but that it felt none of them properly valued the properties.
Pioneer said that it will talk about future plans for its Barnett Shale properties on Feb. 14, when it will also discuss its fourth-quarter and full-year financial results.