HOUSTON, June 2 (UPI) -- The $2.15 billion sale of Eagle Ford shale interests in Texas is a chance to shift to the oil-rich Permian basin in the state, Pioneer Natural Resources said.
Pioneer and its partners at Reliance Holding entered into a sales agreement with an affiliate of rival Enterprise Products Partners for the sale of its Eagle Ford Shale Midstream business. The midstream business includes 460 miles of gas-gathering pipelines and facilities that can process as much as 780 million cubic feet of natural gas.
Pioneer Chairman and Chief Executive Officer Scot Sheffield said the sale will support future operations in Permian shale acreage. The company operates 10 rigs in the Spraberry/Wolfcamp basin within the Permian shale.
"Starting in July, we will add an average of two horizontal rigs per month in the northern Spraberry/Wolfcamp through the remainder of the 2015 as long as the oil price outlook remains positive," he said in a statement.
A report from Bentek, the forecasting unit of energy news agency Platts, found oil production in the Permian basin increased 50 percent and natural gas production increased 30 percent in the last three years.
While other reserve basins are seeing a decline in rig activity, Bentek said the Permian shale has shown resiliency in the era of low oil prices.
Enterprise last month said it had the long-term agreements in place to support the development of a 416-mile pipeline to send crude oil and condensate, an ultra-light grade of oil found largely in U.S. shale deposits, from its terminal in Midland, Texas, to a storage facility in Sealy, west of Houston.
The new pipeline would be able to carry as much as 540,000 barrels per day, largely from the Permian shale basin in Texas, and be in service by 2017. With the new midstream asset in hand, the company said it was establishing itself as a vital cog in Texas shale basins.
The $2.15 billion purchase price will be paid by Enterprise in two installments.
