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Pioneer Natural Resources Reports Third Quarter 2012 Financial And Operating Results

Stocks in this article: PXD

Based on the Company’s fourth quarter production forecast, Spraberry production is forecasted to grow from an average of 45 MBOEPD in 2011 to 66 MBOEPD to 67 MBOEPD in 2012. This reflects achieving the top end of Pioneer’s original guidance range for 2012.

In the liquids-rich Eagle Ford Shale in South Texas, Pioneer expects to drill approximately 125 wells in 2012. The 2012 drilling program continues to focus on liquids-rich drilling, with only 10% of the wells designated to hold strategic dry gas acreage in response to the current low gas price environment. The Company drilled 38 wells in the third quarter and placed 35 wells on production.

Pioneer’s drilling operations in the Eagle Ford Shale continue to become more efficient. The Company’s average drilling cost per foot has decreased by 18% and drilling feet per day has increased by 28% since the second quarter of 2011. The number of wells drilled from pads, as opposed to single-well locations, is expected to increase from 30% of the wells drilled in the first nine months of 2012 to 80% of the wells drilled in 2013, reflecting the fact that most of Pioneer’s acreage will be held by production next year.

Pioneer has been testing the use of lower-cost white sand instead of ceramic proppant to fracture stimulate wells drilled in shallower areas of the field. The Company is now expanding the use of white sand proppant to deeper areas of the field to further define its performance limits. The Company has tested 74 wells with white sand proppant through the third quarter, three of which were deeper dry gas wells, with a savings of approximately $700 thousand per well. Early well performance has been similar to direct offset ceramic-stimulated wells. Pioneer is continuing to monitor the performance of these wells and expects that 50% of its 2012 drilling program will have used the lower-cost white sand proppant. During 2013, the Company expects that greater than 50% of the wells drilled will use white sand proppant.

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