Pioneer Replaces 208% of Production in 2001
Pioneer Natural Resources Company announced that as of December 31, 2001, its total proved oil and gas reserves were 671 million barrels oil equivalent (MMBOE), or 4 trillion cubic feet (Tcf) natural gas equivalent, including 325 million barrels (MMBbls) of crude oil and natural gas liquids and 2 Tcf of natural gas.
Pioneer replaced 208% of production at a finding cost of $7.49 per BOE during 2001. Excluding 25 MMBOE of downward revisions due to the decline in commodity prices, Pioneer replaced 268% of its production at a finding cost of $5.81 per BOE during 2001. Costs incurred during 2001 totaled $647 million, including $171 million for acquisitions and $476 million for development and exploration activities. Reserves as stated above were based on year-end NYMEX prices for oil and natural gas of $19.76 per barrel and $2.73 per Mcf, respectively. Year-end proved reserves and costs incurred are detailed in the attached supplemental schedule. Proved developed reserves account for approximately 70% of total proved reserves.
During 2001, Pioneer drilled 390 wells with 85% success worldwide, including 101 exploration and extension wells with 60% success. The Company drilled 271 wells in the U.S., 51 wells in Canada, 62 wells in Argentina, four wells in South Africa and one each in Gabon and Tunisia. Domestic drilling included 179 Spraberry oil wells, 41 wells in the Hugoton/West Panhandle gas field and 51 wells in other domestic fields.
For the three years ending in 2001, Pioneer's finding cost averaged $4.74 per BOE. Over the three-year period, Pioneer added 250 MMBOE for total costs incurred of $1.2 billion. Three-year average reserve replacement was 184%.
Over the past three years, Pioneer has added proved reserves related to its interest in its "Big 4" discoveries, Canyon Express, Devils Tower and Falcon in the deepwater Gulf of Mexico and Sable in the shallow waters offshore South Africa. The Company believes these projects hold potential for further reserve additions over time.
Pioneer also participated in discoveries for which no reserves have been recorded. During 2001, Pioneer made discoveries on its first well in the Olowi Block offshore Gabon and on Ozona Deep in the deepwater Gulf of Mexico and confirmed the presence of significant natural gas offshore South Africa. Pioneer plans to appraise these discoveries during 2002.
On the 2002 exploration front, Pioneer also plans to drill a second prospect offshore Gabon to test the oil rim on the southern section of the feature. Pioneer plans to continue exploration by drilling two wells in South Africa and two to three wells in Tunisia in North Africa. On the Gulf of Mexico shelf, the Company plans to drill the Gallup prospect which is similar to the Stirrup field where the Company drilled a discovery during 2001. In the deepwater Gulf of Mexico, Pioneer plans to test prospects near both Falcon and Devils Tower to take advantage of the new infrastructure currently under development in these areas.
Scott D. Sheffield, Chairman and CEO, stated, "Pioneer's exploration strategy, supported by incremental acquisitions in key areas, has added significant proved reserves and the potential for 55% to 60% production growth over the next 14 months. Pioneer also has several projects in the pipeline, in both the appraisal and prospect stages, which offer the potential to extend our production growth into 2004 and beyond. In 1997, we made a commitment to transform Pioneer into a successful exploration company and are very proud of our track record to date."