Netherland, Sewell and Associates, Inc. (NSA), a top oil and gas reserve engineering firm, audited the proved reserves of significant fields that represent approximately 85% of the present value and approximately 88% of the quantity of Pioneer's proved reserves at year-end 2004. NSA also audited the proved reserves of Pioneer's significant fields at year-end 2003.
Pioneer added 303 million barrels oil equivalent (MMBOE) of proved reserves during 2004, replacing 441% of production at a finding and development cost of $10.48 per barrel oil equivalent (BOE). Pioneer acquired 278 MMBOE of proved reserves, primarily in the Rockies through its merger with Evergreen Resources, Inc., and added 39 MMBOE of proved reserves from discoveries and field extensions in the U.S., Argentina, Tunisia and Canada. During 2004, Pioneer also produced 69 MMBOE, sold 1 MMBOE and had downward revisions to prior reserve estimates of 14 MMBOE.
Costs incurred during 2004 totaled $3.2 billion, including $557 million for development and exploration activities, $2.6 billion for acquisitions and $15 million for asset retirement obligations. Of Pioneer's 2004 development and exploration cost incurred, 56% was invested in developing proved undeveloped reserves booked in prior years, and 15% was invested in non-drilling related categories including seismic and other geologic and geophysical activities.
Year-end proved reserves and costs incurred are detailed in the attached supplemental schedule.
For the three years ending in 2004, Pioneer's finding and development cost averaged $8.90 per BOE. Over the three-year period, Pioneer added 519 MMBOE for total costs incurred of $4.6 billion. Three-year average reserve replacement was 311%. For the five years ending in 2004, Pioneer's finding and development cost averaged $8.27 per BOE. Over the five-year period, Pioneer added 678 MMBOE for total costs incurred of $5.6 billion. Five-year average reserve replacement was 269%.
Scott D. Sheffield, Chairman and CEO, stated, "I'm excited about the quality of the reserves we added to our portfolio in 2004 and the potential represented by the opportunities we've generated over the past year. We enter 2005 with an enhanced long-lived asset base in North America, additional opportunities for development drilling, several new fields with significant unrecorded reserve potential awaiting final commercialization decisions and an even stronger foundation for our exploration program. In past years, we've invested heavily in building a broad portfolio of exploration opportunities in each of our focus areas, including the Gulf of Mexico, Alaska, North Africa and West Africa. In 2005, we should begin to realize the benefit of these investments as we step up the level of drilling and test the potential of our more mature prospect inventory."
Most Popular Articles