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

Pioneer Eagle Ford Production Chart

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 Expanding Use of Pad Drilling in 2013

Pioneer Eagle Ford Update Map

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.

Pioneer Cuts Back Eagle Ford Dry Gas Drilling Again

Pioneer Eagle Ford Update Map

Pioneer Natural Resources is cutting back its dry-gas development plans in the Eagle Ford from 15% to just 10% of its budgeted activity. Gas drilling is only going forward at this level to secure leases for when gas prices improve.

The company reported earnings for the second quarter at the end of July and is right on target to meet expectations for the year in South Texas. Highlights from the quarter include:

• Drilled 34 wells and brought 37 to production
• Added three central gathering plants to reach a total of 11 in operation
• Lowered dry-gas activity from 15% to 10% of wells budgeted. Gas drilling is only being utilized to hold acreage by production
• Expanding the use of White Sand into gas well completions ($700,000 savings)

Pioneer produced approximately 23,000 boe/d in the first quarter, 24,000 boe/d in the second quarter and has provided guidance of 25,000-29,000 boe/d for 2012. Expect the company to realize its biggest production increases in the second half of the year.

Read more about the company's position at our Pioneer Eagle Ford page.

Pioneer Natural Resources (PXD) Grows Eagle Ford Production 15% in Q1

Pioneer Natural Resources continues its focus on lower costs and further improving its Eagle Ford assets.  Along the way, the company grew Eagle Ford production 15% quarter over quarter from 20,000 boe/d to 23,000 boe/d.  Current expectations are for more than 50,000 boe/d in 2014. Pioneer reported that results continue to hold up on the 45 wells where white sand was used instead of ceramic proppant in completions. The company tested white sand in more shallow areas of the play and has recognized a cost savings of $700,000 per well. If production results hold up, we might see a more significant shift to the use of white sand.

The company has 10 wells waiting to be completed and plans to bring online 125 wells this year. With 26 brought online in the first quarter, we'll see an increase to more than 30 wells per quarter over the remainder of the year.

You can read more quarterly commentary at our Pioneer Eagle Ford page.

Pioneer Taps the Brakes in the Eagle Ford

Pioneer Natural Resources had planned to grow its rig count to 14 in 2012, but 25% of the company's development was set for dry gas. With natural gas prices below $3/mmbtu, Pioneer is backing off and delaying the two new rigs until 2013. The company still plans to have 19 rigs running by 2015. Production also made a considerable jump in the fourth quarter. The company produced more than 20,000 boe/d, compared to 14,000 boe/d in the third quarter. Gathering constraints are being eased and more companies are seeing significant production jumps. 

The company's well costs are expected to run $7-8 million per well in 2012 and the white sand, instead of ceramic, proppant will be used in 50% of the company's wells. White sand saves the company $700,000 per well.

The company's midstream partnership with Reliance Industries will also complete three additional central gathering plants in 2012. That will bring the total number of gathering plants to 11 across the company's acreage.

Read more at the Pioneer Natural Resources Eagle Ford page.