The Company placed 16 new horizontal wells on production in the southern Wolfcamp joint venture area during the third quarter, with 24-hour peak initial production rates up to 1,241 BOEPD. Well performance across the area continues to meet expectations and reinforces the Company’s estimate that wells in this area will deliver an average EUR of at least 575 MBOE over the life of the well.

Pioneer is currently running eight rigs in the joint venture area and expects to spud approximately 100 wells in 2013 with an average lateral length of 8,300 feet. This includes twenty-four 10,000-foot lateral wells, with fifteen of these wells scheduled to be spud in the fourth quarter. These longer lateral wells are expected to increase the well’s EUR by 40% at an incremental cost of 20%. The average drilling and completion cost for the 2013 program is $7.5 million to $8.0 million per well. Approximately 70% of the wells drilled in this area during 2013 will be on three-well pads. It is taking approximately 150 days from the time the first well on a three-well pad is spud until all three wells on the pad are placed on production. This is also resulting in “lumpy” production growth.

Pioneer is testing downspacing from 720-foot spacing between wells (116-acre spacing) to 480-foot spacing between wells (77-acre spacing) in the Giddings area. The initial test includes 12 wells that have been drilled on three-well pads using zipper fracture stimulations. The wells are also staggered between the Upper Wolfcamp B and Lower Wolfcamp B intervals. All 12 wells are currently on production. The average 24-hour peak initial production rate for the 12 wells was 1,016 BOEPD. The wells all have approximately 6,200-foot perforated lateral lengths and were completed utilizing a 21-stage hybrid fracture stimulation. The initial production rates for the 12 downspaced wells compares favorably to the initial two Giddings Wolfcamp B interval wells, which averaged 830 BOEPD at similar lateral lengths.

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