UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 26, 2005
Pioneer Natural Resources Company
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-13245 75-2702753
---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5205 N. O'Connor Blvd., Suite 900, Irving, Texas 75039
------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(972) 444-9001
----------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
| | Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
| | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
| | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
PIONEER NATURAL RESOURCES COMPANY
TABLE OF CONTENTS
Page
Item 1.01. Entry into a Material Definitive Agreement........... 3
Item 7.01. Regulation FD Disclosure............................. 3
Item 9.01. Financial Statements and Exhibits
(c) Exhibits....................................... 3
Signature........................................................ 4
Exhibit Index.................................................... 5
2
PIONEER NATURAL RESOURCES COMPANY
Item 1.01. Entry into a Material Definitive Agreement
On January 27, 2005, Pioneer Natural Resources Company (the "Company")
issued a news release that is attached hereto as exhibit 99.1. In the news
release, the Company announced that it has sold to Royalty Acquisition Company,
LLC (the "Purchaser") approximately two percent of its total proved reserves, or
20.5 million barrels of oil equivalent proved reserves, by means of two
volumetric production payments ("VPPs") for total proceeds of $593 million and
the assumption of the Company's obligations under certain derivative agreements,
referred to below. The production payment purchase and sale agreements governing
the VPP transactions are attached hereto as exhibits 99.2 and 99.3.
The Purchaser and Wachovia Bank, N.A. ("Wachovia Bank") are subsidiaries
and/or affiliates of Wachovia Corporation. The Company periodically enters into
derivative agreements with Wachovia Bank to hedge commodity price risk and
interest rate risk. In accordance with the terms of the VPPs, the Purchaser
assumed the Company's rights and obligations under certain derivative
agreements. The counterparty to the derivative obligations assumed by the
Purchaser is Wachovia Bank. Wachovia Bank is also a party to the Company's $700
million 5-Year Revolving Credit Agreement dated as of December 16, 2003, as
amended, and to the Company's $900 million 364-Day Credit Agreement dated as of
September 28, 2004, as amended.
The VPPs represent is a limited term overriding royalty interests in oil
and gas reserves which: (i) entitle the Purchaser to receive scheduled
production volumes over a period of time from specific lease interests; (ii) are
free and clear of all associated future operating costs, capital expenditures
and production and ad valorem taxes; (iii) are nonrecourse to the seller (i.e.,
the Purchaser's only recourse is to the assets acquired); (iv) transfer title to
the proved reserves to the buyer and (v) allow for retention by the Company of a
residual interest in the assets after the VPPs volumetric obligations have been
satisfied.
The first VPP on approximately 58 billion cubic feet primarily of the
Company's Hugoton field gas volumes has an approximate five-year term beginning
February 1, 2005 and ending December 31, 2009. The second VPP on approximately
10.8 million barrels of Spraberry field oil volumes has a seven-year term
beginning January 1, 2006 and ending December 31, 2012.
Item 7.01. Regulation FD Disclosure
In addition to the announcement referred to above under "Item 1.01. Entry
into a Material Definitive Agreement", the Company's news release (i) provided
an update to the Company's fourth quarter 2004 financial outlook based on
current expectations and (ii) announced that it intends to change the manner in
which it reports field fuel usage.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
99.1 News Release dated January 27, 2005.
99.2 Production Payment Purchase and Sale Agreement dated as of
January 26, 2005 among the Company, as the Seller, and
Royalty Acquisition Company, LLC, as the Buyer (related to
Hugoton gas).
99.3 Production Payment Purchase and Sale Agreement dated as of
January 26, 2005 among the Company, as the Seller, and
Royalty Acquisition Company, LLC, as the Buyer (related to
Spraberry oil).
3
PIONEER NATURAL RESOURCES COMPANY
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PIONEER NATURAL RESOURCES COMPANY
Date: February 1, 2005 By: /s/ Darin G. Holderness
-------------------------------------------
Darin G. Holderness
Vice President and Chief Accounting Officer
4
PIONEER NATURAL RESOURCES COMPANY
EXHIBIT INDEX
Exhibit No. Description
99.1(a) News Release dated January 27, 2005.
99.2(a) Production Payment Purchase and Sale Agreement dated as
of January 26, 2005 among the Company, as the Seller,
and Royalty Acquisition Company, LLC, as the Buyer
(related to Hugoton gas).
99.3(a) Production Payment Purchase and Sale Agreement dated as
of January 26, 2005 among the Company, as the Seller,
and Royalty Acquisition Company, LLC, as the Buyer
(related to Spraberry oil).
-------------
(a) filed herewith
5