Pioneer Natural Resources Company (NYSE:PXD)
(“Pioneer” or “the Company”) today announced that the Company added proved reserves totaling 141 million barrels oil equivalent (MMBOE) during 2013 from discoveries, extensions, improved recovery and technical revisions of previous estimates (excludes revisions of previous estimates of 319 MMBOE of proved undeveloped (PUD) reserves that are no longer expected to be drilled and 30 MMBOE of positive pricing revisions). These drillbit proved reserve additions equate to replacing 211% of Pioneer’s full-year 2013 production of 67 MMBOE, which includes 5 MMBOE of production associated with assets held for sale (Alaska and Barnett Shale) and production used for field fuel of 3 MMBOE. The Company’s substantial reserve additions in 2013 are primarily due to the continued successful execution of Pioneer’s horizontal drilling programs in the Spraberry/Wolfcamp and Eagle Ford Shale plays. The drillbit finding and development (F&D) cost was $19.70 per barrel oil equivalent (BOE).
The Company continues to shift its drilling activity in the Spraberry/Wolfcamp play in the Midland Basin of West Texas from vertical drilling to horizontal drilling. The Company believes that replacing vertical drilling with horizontal drilling will enhance ultimate resource recoveries and improve rates of return per dollar invested. As a result, Pioneer no longer expects to drill a significant number of its previously recorded vertical PUD locations. Consequently, a total of 231 MMBOE of PUD reserves associated with vertical drilling locations in the Spraberry/Wolfcamp field have been removed. This reduction in proved reserves is reflected in revisions of previous estimates. Based on the limited horizontal drilling that Pioneer has completed in six Wolfcamp and Spraberry shale intervals across Pioneer’s extensive acreage position in the Spraberry/Wolfcamp field, sufficient production and well control data is not yet available to support the replacement of the vertical PUD reserves that were removed in 2013 with horizontal PUD reserve additions. Horizontal drilling in the Spraberry/Wolfcamp play contributed 72 MMBOE of proved reserve additions during 2013, or 50% of the Company’s total proved reserve additions during the year. Based on current horizontal drilling plans, the Company expects to collect additional production and well control data during the next few years as it increases drilling activity to support the addition of more than 600 MMBOE of incremental horizontal proved developed (PD) and PUD reserves by the end of 2016.