Production commenced with one Aconcagua well and one King's Peak well and is expected to be ramped up over the next one to two months to an expected peak production rate of 500 million cubic feet per day (Mmcfpd) when all wells from the three fields are on line. A Pioneer subsidiary owns 23.5% of the system through its ownership in the Aconcagua and Camden Hills fields, and the Company anticipates that its net production from the system will be approximately 115 Mmcfpd when peak production is achieved, increasing its worldwide production rate by approximately 17% compared to second quarter 2002.
Canyon Express now holds the world record water depth for production at 7,210 feet (2,198 meters), flowing through the world's third longest gas gathering line at 57 miles (92 kilometers). This is also the first time that production from multiple fields has been commingled using advanced subsea technology, including the use for the first time of subsea multiphase meters in allocating production from the three fields.
TotalFinaElf E&P USA, Inc., is the operator of the Canyon Express system, and Pioneer's other partners in the system are Marathon Oil Company, BP and Nippon Oil Exploration USA Ltd.
Canyon Express is the first of four significant projects from which Pioneer expects to initiate production over the next year. The Sable oil field being developed offshore South Africa and the Falcon gas field and Devils Tower oil field under development in the deepwater Gulf of Mexico are expected to commence production in 2003. When production from these four projects peaks, Pioneer expects its total worldwide daily production to reach approximately 185,000 barrels of oil equivalent per day, an estimated 60% increase from second quarter 2002 levels.
Scott D. Sheffield, Chairman and CEO, stated, "We are thrilled to finally reach the production phase of the first of our Big Four projects and look forward to reaching first production on the other three projects during 2003. We expect growth to continue into 2004 as we benefit from the first full year of production from these projects, and we are pleased with our lineup of discoveries and prospects that could provide the next tier of incremental growth in 2004 and beyond. The lineup includes our discoveries in the deepwater Gulf of Mexico, Gabon and Tunisia and an extensive portfolio of prospects in both North America and Africa."
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