Wednesday, April 27, 2011

Pioneer investing $1.6 billion for 2011 drilling program (69% for Spraberry); Aims for 18% compounded annual growth for 2011-2013

Pioneer's capital program for 2011 totals $1.8 billion, consisting of $1.6 billion for drilling operations and $0.2 billion for vertical integration and facilities. The 2011 drilling capital of $1.6 billion is focused on oil and liquids-rich drilling, with 75% of the capital allocated to the Spraberry and Eagle Ford Shale plays. The company is projecting 18% compounded annual growth for 2011-2013.

Pioneer estimates that the company will drill approximately 700 wells into the Spraberry formation during 2011. This will increase its net production to between 38,000 boepd and 44,000 boepd by the final quarter of 2011. The company plans to substantially increase the number of rigs drilling the Spraberry formation in West Texas over the course of 2011.

“Our most recent drilling program called for 30 rigs to be operating in the Spraberry during 2011, but we now plan to increase the rig count to 35 rigs by mid-year,” revealed Pioneer Chairman and CEO Scott D. Sheffield.

Other companies working the Spraberry include Cheapeake Energy, which has 680,000 net acres in the Spraberry and three other plays in the Permian Basin.

In 2011, Pioneer Natural Resources will ramp up its development of the Eagle Ford Shale as well. The company will drill 70 gross wells within its joint venture area with Reliance Industries. In 2010, the company drilled 26 wells into the Eagle Ford Shale. The company estimates that this development will increase production from the Eagle Ford Shale to between 10,000 and 13,000 BOEpd in 2011, triple the level of production in 2010.

Pioneer holds 310,000 gross acres in the Eagle Ford Shale, which is growing in popularity among producers because it holds natural gas and oil.

Pioneer Natural Resources plans continued exploitation of its large acreage position in the Spraberry trend in 2011, along with increased development of the Eagle Ford Shale as the company seeks to boost its oil and liquids production. This accelerated drilling program, which is planned to ramp up further in 2012 and 2013, is expected to increase the company’s current compound annual production growth target of more than 15 percent for the 2011 through 2013 period.

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