OMV has agreed to buy U.S.-based Pioneer Natural Resources' Tunisian units for $866 million as the Austrian energy group bulks up North African operations that have become a core business.

The deal adds immediate production capacity, significant scope for exploration and development, and opportunities to boost efficiency because the sites adjoin OMV's existing Tunisian fields, it said on Thursday. While for Pioneer, it enables the Dallas-based company to redeploy capital to some of its liquids-rich shale assets in the U.S.

Emerging Europe's biggest energy group OMV said existing cash and committed credit lines would finance the purchase initially, adding: "OMV remains committed to strict capital discipline and retains the clear objective of maintaining a strong investment-grade credit rating."

Fresh from a €1 billion ($1.31 billion) acquisition of Turkey's Petrol Ofisi, the company has said it will decide its long-term refinancing plans in the first half of 2011.

The deal gives OMV production of around 5,700 barrels of oil equivalent per day (boe/d) based on fourth-quarter 21010 output - 90% oil and 10% gas.

"The acreage offers considerable exploration upside and will complement OMV's existing south Tunisian assets, Jenein Sud and Nawara, very well," it said.

It noted Pioneer Tunisia and OMV are both partners in the South Tunisia Gas Project, which aims to build a 320 km gas pipeline to supply the Tunisian domestic market.

OMV said the final purchase price could vary if $66 million in working capital at the assets is adjusted and if Pioneer's partner exercises an option to buy out its share in the Anaguid exploration permit and in the Mona/Durra production concession.

Anaguid and Durra/Mona account for 13% of the underlying $800 million purchase price.

Liquids Move Continues
The deal also lets Pioneer, which has traditionally been gas focused, to accelerate drilling in the Spraberry and the Eagle Ford Shale. The company has been acquiring properties in areas like Eagle Ford and Barnett shale, which have a high liquids content.

Oil prices are up over 17% year-to-date but gas prices are down about 25%, pushing U.S. exploration and production firms to shift dollars to acreage with crude oil or natural gas with a high liquids content.

Pioneer plans to increase the rig count in the Spraberry to 35 by mid-year from its previous target of 30, while in the Eagle Ford Shale it expects to operate 12 rigs during 2011.