Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company added proved reserves totaling 161 million barrels oil equivalent (MMBOE) during 2012 from discoveries, extensions, improved recovery and technical revisions of previous reserve estimates. These drillbit proved reserve additions equate to replacing 264% of Pioneer’s full-year 2012 production of 61 MMBOE (includes proved reserves used for field fuel of 3 MMBOE and production of 1 MMBOE from South Africa prior to its sale). The drillbit finding and development (F&D) cost related to proved reserve additions was $17.72 per barrel oil equivalent (BOE).
The NYMEX prices used for 2012 proved reserves reporting purposes were $94.84 per barrel for oil and $2.76 per million British thermal units (MMBtu) for gas. The oil price for 2012 was slightly below the oil price used to calculate proved reserves for 2011 ($96.13 per barrel), while the gas price for 2012 was significantly lower than the gas price used to calculate proved reserves for 2011 ($4.12 per MMBtu). The significant decline in gas prices resulted in moving proved undeveloped (PUD) gas reserves to probable reserves in the Raton field in southeastern Colorado, the Edwards Trend in South Texas and the Barnett Shale play in North Texas. As a result, the Company recognized negative price revisions of 82 MMBOE during 2012.
The Company’s successful horizontal Wolfcamp Shale drilling results in 2012 has led the Company to shift more of its future drilling activity in the Spraberry field from vertical drilling to horizontal drilling. As a result, Pioneer no longer expects to drill a significant number of its previously recorded vertical PUD locations within the next five years. Consequently, in compliance with Securities and Exchange Commission guidelines, 80 MMBOE of PUD reserves associated with vertical drilling locations in the Spraberry field have been moved to probable reserves. This reduction in proved reserves is reflected in technical revisions. Based on the horizontal drilling conducted by Pioneer to date in the Spraberry field, sufficient production data is not yet available to support the entire replacement of the vertical PUD reserves that were removed in 2012 with horizontal PUD reserve additions. Reserve additions during 2012 include 37 MMBOE of proved reserves added as a result of horizontal Wolfcamp Shale drilling in the Spraberry field. The Company expects to gain additional production data during 2013 from its expanding horizontal drilling program which is expected to support the addition of incremental horizontal proved developed (PD) and PUD reserves during 2013 and beyond.