Pioneer to Increase Argentina Production 12-17% in 2004

US oil firm Pioneer Natural Resources expects to increase its Argentine oil and gas production by 12-17% and double its capital investment program in 2004, the company said in its fourth quarter earnings presentation.

"We expect 2004 to be a record year in Argentina in terms of gas production," Pioneer chairman and CEO Scott Sheffield said during a conference call to discuss the results.

Pioneer plans to drill six wells in the South American country in 2004. Argentina was Pioneer's star performer until the devaluation of the peso in early 2002, which caused the company to stop drilling for 6-7 months. However, Argentine oil and gas production is "back on track" thanks to the stronger economy, rising gas demand and "pesofied" exploration costs, Sheffield said.

"Argentine production returned to the peak levels of 2000 with our drilling results and the improvements in the economy and gas demand," he said. The company's average Argentine daily oil production increased 8.8% to 8,687 barrels a day (b/d) in 2003 compared to the previous year, the company said in a statement. Natural gas liquids production increased 89.4% to an average of 1,318b/d, while natural gas production rose 20.3% to 94.1 million cubic feet a day (mcf/d), despite gas tariffs still being frozen at their January 2002 pesofied levels.

Pioneer currently has seven active rigs in Argentina's Neuquen and Austral basins. The company reported net income of US$57.4mn in 4Q03 compared to US$18.4mn in the year-ago period.

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