Pioneer Natural Resource plans a strategic retreat from the Eagle Ford while cutting its horizontal drilling program in half.
Related: Pioneer Resources Doubles Profits for Q3
In an earnings call last week, Pioneer executives reported a fourth quarter loss of $27 million, production of 215,000 barrels of oil equivalent per day and that projected spending for 2016 capital expenditures will be about $2 billion.
After bucking the trend to reduce spending last year, Pioneer is now joining the ranks of other producers who are cutting back during this drastic downturn.
“Our activity is down zero here shortly. And we’re going to have to wait until prices get back into the mid to high 40s before we start back up again. And so, it may be a while. And so, all of our acreage is held by production. And so, in today’s market, I don’t think you will see anybody be trading Eagle Ford production or acreage just because the prices are too low. You got to have some type of recovery, in my opinion, over the next two years, before people start moving Eagle Ford acreage and values.”
Besides reducing drilling, Pioneer also announced that will close its Victoria pumping services site in a move that will mean cutting 50 jobs and transferring another 100.
Eagle Ford Operational Highlights for 2016
- Rig count will reduce from six rigs at year-end 2015 to zero rigs during the first quarter
- Relocating Pioneer’s two Eagle Ford Shale pressure pumping fleets to the Spraberry/Wolfcamp
- 17 DUCs that the company will hold off until prices come back, likely 2017
- Spending in the Eagle Ford Shale for 2016 will be $60 million ($30 million for the horizontal drilling program and $30 million for compression, land and other)