Acquisitions and Divestitures

Divestitures Recorded in Continuing Operations

The Company recorded net gains on disposition of assets in continuing operations of $6 million and $24 million during the three months ended March 31, 2014 and 2013, respectively, which were primarily comprised of the following:

•

Vertical drilling rigs. During December 2013, the Company committed to a plan to sell the Company's majority interest in Sendero Drilling Company, LLC ("Sendero") to Sendero's minority interest owner. At December 31, 2013, the assets and liabilities of Sendero were classified as held for sale at their estimated fair value. In March 2014, the Company completed the sale of Sendero for cash proceeds of $31 million and recognized a gain of $1 million associated with the completion of the sale during the three months ended March 31, 2014. As part of the sales agreement, the Company committed to lease from Sendero 12 vertical rigs through December 31, 2015, and eight vertical rigs in 2016.


•	Permian Basin. During February 2014, the Company completed the sale of proved and unproved properties in Gaines and Dawson counties in the Spraberry field in West Texas for net cash proceeds of $68 million, which resulted in a gain of $3 million.


•	West Panhandle. During the first quarter of 2013, the Company completed a sale of its interest in unproved oil and gas properties adjacent to the Company's West Panhandle field operations for net cash proceeds of $38 million, which resulted in a gain of $22 million.

Divestitures Recorded as Discontinued Operations

Alaska. During the fourth quarter of 2013, the Company committed to a plan to sell 100 percent of the capital stock in Pioneer's Alaska subsidiary ("Pioneer Alaska"). In April 2014, the Company completed the sale of Pioneer Alaska to an unaffiliated third party pursuant to an amended purchase and sale agreement for $300 million before normal closing and other adjustments.

The Company has classified (i) Pioneer Alaska's assets and liabilities as held for sale in the accompanying consolidated balance sheets and (ii) Pioneer Alaska's results of operations as income from discontinued operations, net of tax in the accompanying consolidated statements of operations.

Based upon the provisions in the amended purchase and sale agreement for Pioneer Alaska, the Company recorded an additional noncash impairment charge of $97 million in discontinued operations during the three months ended March 31, 2014 to reduce the carrying value of Pioneer Alaska to its sales value, including normal closing adjustments, of $253 million. See Note D for additional information about the Pioneer Alaska impairment charge.

Barnett Shale. During the fourth quarter of 2013, the Company committed to a plan to divest of its net assets in the Barnett Shale field in North Texas. The plan is expected to result in the sale of the Barnett Shale net assets during 2014. The Company has classified its (i) Barnett Shale assets and liabilities as held for sale in the accompanying consolidated balance sheets and (ii) Barnett Shale results of operations as income from discontinued operations, net of tax in the accompanying consolidated statements of operations.

Due to reductions in the fair value of the Barnett Shale net assets, primarily due to cash flow received during the first quarter, an additional impairment charge of $14 million was recorded in discontinued operations during the three months ended March 31, 2014. See Note D for additional information about the Barnett Shale impairment charge.

The Company continues to pursue the sale of its Barnett Shale net assets. No assurance can be given that the sale will be completed in accordance with the Company's plans.

The following table represents the components of the Company's discontinued operations for the three months ended March 31, 2014 and 2013:



		Three Months Ended March 31,
		2014			2013
	(in millions)
Revenues and other income:
Oil and gas		$	68		$	60
Interest and other (a)		29			19
		97			79
Costs and expenses:
Oil and gas production		18			20
Production and ad valorem taxes		3			3
Depletion, depreciation and amortization		—			19
Impairment of oil and gas properties		111			—
Exploration and abandonments		1			10
General and administrative		2			2
Other		3			—
		138			54
Income (loss) from discontinued operations before income taxes		(41		)	25
Current tax provision		—			(1		)
Deferred tax (provision) benefit		15			(8		)
Income (loss) from discontinued operations		$	(26	)	$	16

____________________


(a)	Primarily comprised of cash received associated with Alaskan Petroleum Production Tax ("PPT") credits on qualifying capital expenditures.

The carrying values of the Company's ownership in Pioneer Alaska and the Barnett Shale field as of March 31, 2014, and the carrying values of the Company's ownership in Pioneer Alaska, the Barnett Shale field and Sendero as of December 31, 2013, were included in assets and liabilities held for sale in the accompanying consolidated balance sheet and were comprised of the following:



	March 31, 2014		December 31, 2013
	(in millions)
Composition of assets included in assets held for sale:
Current assets	$	76	$	58
Property, plant and equipment	478		526
Total assets	$	554	$	584

Composition of liabilities included in liabilities held for sale:
Current liabilities	$	79	$	29
Other liabilities	14		10
Total liabilities	$	93	$	39