Acquisitions and Divestitures

Premier Silica Business Combination

On April 2, 2012, a wholly-owned subsidiary of Pioneer acquired 100 percent of the share capital of Industrial Sands Holding Company and its wholly-owned subsidiary, Oglebay Norton Industrial Sands, LLC (the "Acquisition"). During April 2012, the name of Oglebay Norton Industrial Sands, LLC was changed to Premier Silica LLC ("Premier Silica"). Premier Silica's core business is the operation of mines and processing facilities that produce, process and sell sand, primarily to upstream oil and gas companies for proppant used in the fracture stimulation of oil and gas wells in the United States. Premier Silica's business is supportive to the Company's vertical integration strategy of controlling major cost components of the Company's drilling and production activities in the areas where the Company has a significant inventory of drilling locations and a significant number of producing wells. The aggregate purchase price of Premier Silica was $296.0 million, including estimated closing adjustments, and was funded from available cash and borrowings under the Company's credit facility.

The Acquisition was accounted for as a business combination which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair values. The Company's assessment of the fair values of Premier Silica's assets and liabilities is preliminary, and may be adjusted as a result of normal closing adjustments. The fair value of the tangible assets acquired totaled $468.9 million and were primarily comprised of proved sand reserves, probable sand reserves and mine processing facilities and equipment of $454.5 million. The fair value of liabilities assumed totaled $172.9 million and were primarily comprised of deferred income taxes of $150.8 million.

The Company recognized $1.2 million and $2.2 million of acquisition-related costs that were expensed in the three and six months ended June 30, 2012. These costs are included in other expense in the accompanying consolidated statements of operations for the three and six months ended June 30, 2012.

Divestitures Recorded as Discontinued Operations

South Africa. During December 2011, the Company committed to a plan to exit South Africa and initiated a process to divest of its net assets in South Africa ("Pioneer South Africa"). In March 2012, the Company agreed to sell its net assets in Pioneer South Africa to an unaffiliated third party, using a January 1, 2012 effective date, for net cash proceeds of $52.0 million, before normal closing adjustments. The sale is expected to close in the third quarter of 2012. The Company has classified (i) Pioneer South Africa's assets and liabilities as discontinued operations held for sale in the Company's accompanying consolidated balance sheets as of June 30, 2012 and December 31, 2011 and (ii) Pioneer South Africa's results of operations as income from discontinued operations, net of tax in the accompanying consolidated statements of operations (representing a recasting of Pioneer South Africa results of operations for the three and six months ended June 30, 2011, which were originally classified as continuing operations).

Tunisia. In February 2011, the Company sold 100 percent of the Company's share holdings in Pioneer Natural Resources Tunisia Ltd. and Pioneer Natural Resources Anaguid Ltd. (referred to in the aggregate as "Pioneer Tunisia") to an unaffiliated third party for cash proceeds of $802.5 million, including normal closing adjustments and excluding cash and cash equivalents sold, resulting in a pretax gain of $645.2 million. Accordingly, the Company has classified the results of operations of Pioneer Tunisia, prior to its sale, as discontinued operations, net of tax in the accompanying consolidated statement of operations for the six months ended June 30, 2011.

Gulf of Mexico. During the six months ended June 30, 2011, the Bureau of Ocean Energy Management, Regulation, and Enforcement paid the Company $2.0 million of interest on excess royalty payments associated with properties that were sold by the Company during 2006. Accordingly, the interest income is classified as income from discontinued operations.

The following table represents the components of the Company's discontinued operations for the three and six months ended June 30, 2012 and 2011:



	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in thousands)
Revenues and other income:
Oil and gas	$	20,172		$	21,520		$	39,765		$	65,051
Interest and other	—			35			20			4,971
Gain (loss) on disposition of assets, net	—			(4,574		)	(23		)	645,298
	20,172			16,981			39,762			715,320
Costs and expenses:
Oil and gas production	1,345			714			2,135			3,937
Depletion, depreciation and amortization (a)	—			13,544			—			27,236
Exploration and abandonments	1			1,875			86			4,587
General and administrative	12			2,582			1,132			9,397
Accretion of discount on asset retirement obligations (a)	652			610			1,304			1,302
Interest	—			773			(75		)	773
Other	1,581			3,012			1,185			4,214
	3,591			23,110			5,767			51,446
Income (loss) from discontinued operations before income taxes	16,581			(6,129		)	33,995			663,874
Current tax provision	(3,334		)	(12,745		)	(8,739		)	(26,638		)
Deferred tax (provision) benefit (a)	(1,230		)	15,849			(2,544		)	(220,379		)
Income (loss) from discontinued operations	$	12,017		$	(3,025	)	$	22,712		$	416,857

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(a)	Represents the significant noncash components of discontinued operations.

Divestitures Recorded in Continuing Operations

The Company's net gain/loss on disposition of assets for the three and six months ended June 30, 2012 of $1.1 million and $44.7 million, respectively, was primarily associated with the sale of a portion of its interest in an unproved oil and gas property in the Eagle Ford Shale field during the three months ended March 31, 2012 to unaffiliated third parties for proceeds of $54.7 million, including normal closing adjustments. Associated therewith, the Company recorded a pretax gain of $42.6 million.

During the three and six months ended June 30, 2011, the Company's net loss on disposition of assets was primarily associated with the sales of excess materials and supplies inventory.