Pioneer Natural Resources Co, an American oil and gas company, said on Wednesday that a 40 percent stake in the Wolfcamp oil-gas field, which is worth $1.7 billion, will be sold to Sinochem Group, one of China's four State oil companies.

Sinochem will buy a 40 percent stake in the 207,000 acres (837.7 square kilometers) Wolfcamp oil-gas field, while Texas-based Pioneer will retain a 60 percent stake, as well as operating rights for the field.

The Chinese company will pay $500 million in cash for the stake, with $1.2 billion to be paid in the form of drilling equipment.

Pioneer will get the capital within six years, but the period can be extended under certain circumstances.

The two companies have also agreed to join hands to develop up to 86 horizontal wells in 2013, 120 in 2014, and 165 in 2015.