Discontinued Operations

6 Months Ended

Jun. 30, 2011

Discontinued Operations

Discontinued Operations

NOTE Q. Discontinued Operations

During December 2010, the Company committed to a plan to sell Pioneer Tunisia and in February 2011 completed the sale of 100 percent of the Company's share holdings in Pioneer Tunisia to an unaffiliated party for net cash proceeds of $853.7 million, including normal post closing adjustments, resulting in a pretax gain of $645.3 million. During the three months ended June 30, 2011, the Company reduced the net gain on the transaction by $4.6 million. The historical results of operations of Pioneer Tunisia have been classified as discontinued operations herein.

During the six months ended June 30, 2011 and 2010, the BOEMRE paid the Company $2.0 million and $35.3 million, respectively, 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. See Note B for additional information about the BOEMRE payments.

The following table represents the components of the Company's discontinued operations for the three and six months ended June 30, 2011 and 2010:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(in thousands)
Revenues and other income:
Oil and gas	$	—		$	40,096		$	22,130		$	75,848
Interest and other		18			42,619			4,586			44,414
Gain (loss) on disposition of assets, net (a)		(4,574	)		—			645,298			—
		(4,556	)		82,715			672,014			120,262
Costs and expenses:
Oil and gas production		—			3,278			2,126			6,894
Depletion, depreciation and amortization (a)		—			6,006			—			12,346
Exploration and abandonments		1,692			4,379			4,246			8,329
General and administrative		2,279			1,940			8,898			4,573
Accretion of discount on asset retirement obligations (a)		—			103			81			204
Other		675			533			1,857			1,161
		4,646			16,239			17,208			33,507
Income (loss) from discontinued operations before income taxes		(9,202	)		66,476			654,806			86,755
Current tax provision (b)		(1,963	)		(5,737	)		(9,537	)		(5,294	)
Deferred tax (provision) benefit (a) (b)		9,581			(18,888	)		(232,211	)		(35,799	)
	$	(1,584	)	$	41,851		$	413,058		$	45,662

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

(b) During the three months ended June 30, 2011, the Company's taxes from discontinued operations include (i) a current provision and a deferred benefit amounting to $5.2 million associated with a Tunisian reinvestment reserve adjustment and (ii) a $3.7 million deferred foreign tax credit carryover benefit.