Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company added proved reserves totaling 148 million barrels oil equivalent (MMBOE) during 2011 from discoveries, extensions, improved recovery and technical revisions of previous estimates. These drillbit proved reserve additions equate to replacing 313% of Pioneer’s full-year 2011 production of 49 MMBOE (including production of 230 thousand barrels oil equivalent from Tunisia prior to its sale and proved reserves used for field fuel of 3 MMBOE). The drillbit finding and development (F&D) cost related to proved reserve additions was $13.83 per barrel oil equivalent (BOE).
Scott D. Sheffield, Chairman and CEO, stated, “In 2011, we again delivered reserve replacement well in excess of production and achieved our targeted drillbit F&D cost of $10 to $15 per BOE for the year. This strong performance is mostly due to the successful execution of our drilling programs in the Spraberry field, the Eagle Ford Shale and the Barnett Shale Combo play.”
The NYMEX prices used for 2011 proved reserves reporting purposes were $96.13 per barrel for oil and $4.12 per million British thermal units (MMBtu) for gas, compared to $79.28 per barrel of oil and $4.37 per MMBtu of gas used to calculate proved reserves for 2010. The increase in oil prices resulted in positive oil and natural gas liquids (NGL) price revisions due to the higher prices extending the economic life of certain producing wells in the Spraberry field. However, the decline in gas prices combined with management’s current outlook for future gas prices resulted in the Company reallocating the planned capital spending from certain gas areas to liquids-rich areas with higher rates of return. The negative gas price revisions associated with this reallocation were primarily related to moving proved undeveloped gas reserves in the Company’s Raton field in southeastern Colorado that are not expected to be drilled in the next five years to probable reserves. As a result, the Company recognized net negative price revisions of 28 MMBOE during 2011.