-- The third discovery on the Pioneer-operated Jenein Nord Block
-- Plans to develop discoveries on Jenein Nord where the first two wells tested at a combined rate of more than 12,000 barrels of oil equivalent per day (BOEPD)
-- A successful appraisal well on the Adam Block
-- Production increases at Adam of more than 60% compared to average 2006 levels
-- Potential drilling of 9 additional Tunisia wells over the remainder of 2007
Pioneer has a substantial acreage position in the Ghadames Basin of southern Tunisia with an interest in 5 blocks totaling 3.9 million acres.
During the fourth quarter of 2006 and first quarter of 2007, the Tunisia drilling program gained significant momentum with four discoveries on two blocks adjacent to the Adam Concession, where Pioneer has enjoyed drilling success and increasing production since 2003. Three discoveries were drilled on the Pioneer-operated Jenein Nord Block (50% interest assuming ETAP participation) and one discovery was drilled on the Borj El Khadra Block (20% interest assuming ETAP participation).
Of the three Jenein Nord discoveries, two have been tested (Waha and Cherouq) at a combined rate of over 12,000 BOEPD from multiple zones. The combined tests, which are not necessarily indicative of ultimate production, resulted in production that was approximately 70% oil and 30% gas and condensate. The third discovery (El Badr) encountered approximately 35 meters of oil-bearing sands and is expected to be tested in mid-April.
Plans to construct oil production facilities on the Jenein Nord Block are well underway, with first oil production expected during the fourth quarter of 2007. A combined oil production rate forecast is expected to be available for the block by June after testing is completed on the El Badr discovery and production facility plans are finalized. Gas and condensate will not be sold from Jenein Nord until infrastructure is available to transport these products from the block to the northern part of Tunisia. Pioneer and other producers in the country are working with the government to evaluate the opportunity to expand infrastructure to supply gas production from southern Tunisia to northern markets.
On the Borj El Khadra Block, a late-2006 exploratory well (Nakhil) encountered an oil zone with excellent porosity and was tested at rates in excess of 1,000 barrels of oil per day. Since this discovery was made in a new reservoir, the well has been shut in for further evaluation and formulation of an appraisal program.
In the Adam Concession, Pioneer has participated in 12 wells since 2003 with greater than 90% success. The Company holds a 20% interest in the Concession in partnership with Eni (Operator), Talisman and ETAP. During March, the Nour-2 appraisal well was successfully completed and is expected to be brought on production during the second quarter. Total Adam production is expected to increase to approximately 25,000 BOEPD, or approximately 4,250 BOEPD net to Pioneer, at that time. This compares to 2006 average production of approximately 2,600 BOEPD net to Pioneer.
Pioneer and its partners have acquired approximately 1,200 square kilometers of 3-D seismic to optimize the drilling programs on the Adam, Jenein Nord and Borj El Khadra blocks. As a result, Pioneer has identified over 30 prospects and leads on these blocks, some with resource potential as large as 25 million barrels oil equivalent. Pioneer's drilling plans for the remainder of 2007 will be expanded to include up to five additional exploration wells on the Pioneer-operated Jenein Nord Block, three additional wells on the Adam Concession and possibly one well on Borj El Khadra.
"We have built a strong position in the Ghadames Basin of southern Tunisia and have had significant success to date. I'm excited that Tunisia is fast becoming a core area for Pioneer, offering strong production and reserve growth with low finding costs and attractive investment returns," stated Scott Sheffield, Pioneer's Chairman and CEO.
Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States, Canada, South Africa and Tunisia.
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