Pioneer is also operating 15 vertical rigs in the Spraberry field during 2013, which are expected to drill approximately 300 wells. These rigs are required to meet continuous drilling obligations. Approximately 90% of the 300 wells in the 2013 vertical drilling program are expected to be completed in the deeper Strawn and Atoka intervals. Pioneer drilled 75 vertical wells in the third quarter and placed 86 vertical wells on production. With 15 rigs running, vertical production is expected to decline in 2013 by 10%. The Company expects to reduce its vertical rig count going forward, allowing it to devote more of its capital to higher rate of return horizontal drilling.
Third quarter production from the entire Spraberry/Wolfcamp area averaged 79 MBOEPD. This included an increase in horizontal production to 8 MBOEPD and a decrease in vertical production to 71 MBOEPD. Third quarter production was impacted by the conveyance of 3 MBOEPD to Sinochem as part of the southern Wolfcamp joint venture transaction and the loss of approximately 1 MBOEPD due to the Midkiff/Benedum gas processing system rejecting ethane as a result of low ethane prices. Production for the fourth quarter is forecasted to grow to 85 MBOEPD to 88 MBOEPD as a result of placing approximately 45 new horizontal wells on production during the quarter.
For 2013, total Spraberry/Wolfcamp production is forecasted to grow to 80 MBOEPD to 81 MBOEPD, an increase of 21% to 22% compared to 2012. The range has been increased from the previous forecast of 17% to 21% to reflect the strong performance by this asset over the first nine months of 2013. The 2013 growth forecast for the Spraberry/Wolfcamp area also reflects that the vertical rig count decreased from an average of 32 rigs in 2012 to 15 rigs in 2013, while the horizontal rig count increased from an average of three rigs in 2012 to an average of 12 rigs in 2013. Pioneer expects horizontal production to increase from an average of 2 MBOEPD in 2012 to 10 MBOEPD in 2013.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts