Pioneer Resources Reveals Q4 & 2015 Capex

February 12, 2015 Elizabeth Alford

Pioneer Natural Resources, an Irving-based independent oil and gas company, announced its 2014 fourth quarter financials this week and revealed it will slash 2015 capex by 45%. Like many energy companies, Pioneer is making tough choices in order to ride out the current pricing storm.

Pioneer ended the year with a net income of of $431 million and strong production numbers including an 8% increase in oil production (up 15 MBOEPD) from the third quarter. 2014 Eagle Ford highlights include placing 16 horizontal wells on production exporting approximately 10 MBOEPD gross of Eagle Ford Shale condensate.

Related: Comstock Resources Q4 Report

Looking to the new year, the company estimates that of its $1.85 billion budget, $1.6 billion will be earmarked for drilling. The remainder of the funds will focus on infrastructure.

“In response to the current low oil price environment and reduced margins, we are preserving our strong cash position and balance sheet by reducing drilling activity and related infrastructure spending until margins improve significantly. Even with this slowdown, we will be able to continue to prudently develop and grow our industry-leading positions in the Spraberry/Wolfcamp and Eagle Ford Shale plays during 2015 by focusing our drilling activity in the best areas of both plays.”

Pioneer’s Eagle Ford Highlights for 2015

Approximately 20 MBOEPD gross (7 MBOEPD net) of Eagle Ford Shale condensate has been committed for export during 2015.
Part of the cuts in 2015 will include reducing horizontal drilling activity in Eagle Ford by six rigs. The company hopes to add horizontal rigs later in 2015 if conditions improve.

Read the full report at pxd.com

Pioneer Addresses Eagle Ford Exports in Q2 2014 Report

August 21, 2014 Kirk Eggleston

Recently, the U.S. Commerce Department (U.S. DoC) granted Pioneer Natural Resources Co. and Enterprise Product Partners LP permission to export minimally processed Eagle Ford condensate. According to Pioneer officials, the U.S. DoC confirmed that condensate processed at Pioneer’s Eagle Ford Shale central gathering plants in South Texas is a petroleum product that can be exported without a license.

The news in June 2014 that Pioneer was granted permission to export condensate made headlines and sparked a debate about the oil export ban, which has been in place for nearly forty years. Earlier this week, Eagle Ford Operator BHP Billiton confirmed it had applied for an export permit with the U.S. DoC.

It shouldn't come as a huge surprise, but Pioneer is looking to Asian markets to sell its processed Eagle Ford condensate. According to the Energy Information Administration (EIA), Asia surpassed North America as the largest petroleum-consuming region in 2008, with demand increasing 146% (15 million b/d) from 1980 to 2010.

“We are pleased that the U.S. Department of Commerce has recently confirmed that Pioneer may begin exporting processed condensate from the Eagle Ford Shale. Our first cargo was shipped in late July and monthly shipments are expected through the end of this year at prices higher than domestic condensate sales. International interest for our processed Eagle Ford Shale condensate is growing, particularly from Asian petrochemical companies.”

— Pioneer CEO, Scott Sheffield

Pioneer Eagle Ford Q2 2014 Production and Operations Update

During the second quarter, Pioneer had record average Eagle Ford production of 47,000 boe/d. Thirty-one wells were placed on production during the quarter.

For 2014, the company expects to place approximately 125 liquids-rich wells on production in the Eagle Ford Shale (63 wells in the first half of 2014 and 62 wells in the second half). Company officials say most of these wells will be drilled utilizing three-well and four-well pads. The 2014 program reflects longer lateral lengths and larger fracture stimulations compared to 2013. Full-year production is forecasted to range from 46,000 boe/d to 49,000 boe/d, an increase of 22% to 30%, compared to 2013.

Pioneer's Eagle Ford Growth Back Weighted - Drilling 2-6 Well Pads

August 1, 2013 R.T. Dukes

Pioneer Natural Resources brought on 58 Eagle Ford wells in the first half of the year and expects to bring on 78 wells in the second half. Production growth will be weighted to fourth quarter due to a shift from single-well to multiple-well pad drilling.

Only 45% of wells drilled in 2012 were drilled from pads, but that will grow to 80% in 2013. Wells drilled from pads take longer to bring to production, so the shift has delayed production growth. It takes Pioneer 100-120 days from the time of first spud to production from a three well pad.

Pad drilling saves time and costs, but it results in more lumpy production growth. Pad drilling saves $600,000-700,000 per well and will allow Pioneer to drill at a level similar to 2012 with two fewer rigs.

Production growth slowed in the second quarter, but will pick up again in the second half of the year. Production grew to an average of 38,000 boe/d in the second quarter from 37,000 boe/d in the first quarter.

Watch for results from Pioneer in regard to testing 40-acre pilot wells and 10,000 ft horizontal laterals in certain areas.

The company continues to expand the use the white-sand proppants and now publicizes a savings of $1.1 million per well compared to wells completed with ceramic proppant.

Read the full press release at pxd.com

Pioneer Natural Resources Eagle Ford Production Up & Costs Down

May 29, 2013 R.T. Dukes

Pioneer Natural Resources' Eagle Ford production was up to 37,000 boe/d in the first quarter.

That's an increase from 35,000 boe/d in the fourth quarter and a 2012 average of 28,000 boe/d.

Pioneer drilled 37 wells in the quarter and brought 35 of those to production. In total, the company expects to drill 130 wells at a cost of $7-8 million each this year. Those wells will be drilled with just 10 rigs compared to 12 in 2012.

Four out of every five wells will be drilled from centralized pads this year. That's up from just 45% of wells in 2012 and one reason costs continue to fall. Pad drilling saves $600,000-700,000 per well and also saves precious time.

“Our three liquids and resource-rich core assets in Texas, the Spraberry vertical, the horizontal Wolfcamp Shale and the Eagle Ford Shale, were the drivers of this significant increase.”

— Scott Sheffield, Chairman and CEO

Testing Downspacing & White Sand Proppants

Pioneer continues to test the viability of 70-80 acre downspacing and is even testing 40-acre spacing in areas. The liquids prone areas will likely call for tighter spacing. We should know results from the 70-80 acre spacing tests later in the year.

The company is also expanding the use of white sand proppant. Ceramic proppants have been used in the deeper portions of the play, but the use of white sand can save as much as $700,000 per well. Pioneer estimates it will use cheaper sand in 70% of its Eagle Ford completions in 2013.

A total of 11 central gathering facilities are in place and one more will be added in 2014. The major midstream hurdles faced when the company began developing the play have largely been eliminated.

Don't expect natural gas drilling in the Eagle Ford to pick up at current gas prices. The company indicated it is not going to get around to dry gas acreage even at gas prices of $4.25-4.50.

Read the full press release at pxd.com

Pioneer Natural Resources Expanding Use of Pad Drilling in 2013

February 15, 2013 R.T. Dukes

Pioneer Natural Resources' (PXD) Eagle Ford drilling will come from centralized pads 80% of the time in 2013. That's up from 45% of the time in 2012 and will allow the company to drill 130 wells with just 10 rigs. Pioneer saves $600,00-700,000 per well when utilizing pads. Approximately 130 wells were drilled in 2012 with an average of 12 rigs running.

Pioneer plans to spend $575 million of its $3 billion 2013 capital budget in the Eagle Ford.

“Pioneer plans to spend $575 million of its $3 billion 2013 capital budget in the Eagle Ford.”

Pioneer will be using the savings from pad drilling to extend the lateral reach of its average well. Horizontal laterals averaged 5,700 ft in 2012, but PXD will be targeting 6,200 ft in 2013. The extra 500 ft of reservoir contact will cost about $500,000 to drill and complete. In general, longer laterals decrease the number of wells needed over the life of the play.

White sand completions will be tested in deeper areas of the Eagle Ford in 2013. PXD has been monitoring the use of white sand completions in shallow wells for the past two years and is now confident enough to test the practice in deeper areas with higher pressures. To date, the company has test 97 wells completed with white sand and has saved an average of $700,000 per well.

PXD has 11 central gathering plants in place and expects to bring one more online in late 2013.

Production grew from an average of 12 mboe/d in 2011 to 28 mboe/d in 2012. In 2013, the company has issued guidance of 38-42 mboe/d.