Must-know: US oil industry reaction to the loosening export ban (Part 5 of 11)
(Continued from Part 4)
Pioneer Natural Resources
Pioneer Natural Resources (PXD), based in Texas, is a major oil and gas in the U.S. PXD is considered to be one of the most active drillers in the Eagle Ford Shale.
Pioneer started full development in the Eagle Ford after signing a joint venture agreement with Reliance Industries (or RIL) in June, 2010. Pioneer and Reliance Industries reached a joint venture agreement where Pioneer sold a 45% interest in approximately 212,000 net acres for a total price of $1.15 billion. Reliance paid $266 million initially and will carry future drilling costs of $879 million. The joint venture intends to utilize horizontal drilling to produce gas and condensate in the liquids-rich portion of the formation.
The company was also recently named by the Commerce Department to produce and export condensate. The U.S. Department of Commerce has ruled that Pioneer and Enterprise Products Partners, a Houston pipeline company, can export condensate provided it has been processed in a distillation tower.
In a formal statement, the company said that, “BIS recently confirmed our interpretation that the distillation process by which our Eagle Ford Shale condensate is stabilized is sufficient to qualify the resulting hydrocarbon stream as a processed petroleum product eligible for export without a license.”
PXD was one of the large groups of producers that had been lobbying to end the crude export ban. It had approached the commerce department earlier this year to get them to agree.
Loosening the export ban is a huge win for the company. It affects a significant portion of PXD’S production in the Eagle Ford formation where the company is planning to make huge investments in 2014.
ETFs that include Pioneer Resources are the Energy Select Sector SPDR Fund (XLE), the iShares U.S. Energy ETF (IYE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the Vanguard Energy ETF (VDE).
Continue reading the next section in this series to learn about other oil producers that stand to benefit from loosening the export ban.
Continue to Part 6
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