Exploration Increases Production, Pioneers Hopes Trend will Continue
In the Spraberry oil field, Pioneer Natural Resources increased production by 13% in 2007 compared to 2006, drilling approximately 350 wells. The Company continues to have success drilling into the deeper Wolfcamp zone adding approximately 20% to the reserves and production of a typical Spraberry-only well. A similar drilling program is planned for 2008 with expected production growth of approximately 15%.
Pioneer increased its 2007 production in the Raton Basin by 10% compared to 2006. The Company completed approximately 300 coal bed methane wells during 2007, benefiting from improved drilling and completion efficiencies. Pioneer expects to complete 175 wells during 2008, increasing production by approximately 10%.
A news release covering new developments and Pioneer's 2007 results in the Edwards Trend was issued earlier this week. Highlights of the release included 2007 production growth of 38%, an expansion of the gross discovered gas resource potential to 400 BCF to 600 BCF from nine new field discoveries to date and three recent well tests of 12 MMCFPD to 16 MMCFPD each.
During 2007, Pioneer entered the Barnett Shale, building a land position of approximately 80,000 gross acres with more than 450 drilling locations and more than 600 BCF of net resource potential. The Company plans to drill approximately 20 wells in 2008, with plans to ramp up drilling in 2009.
In Tunisia, Pioneer's production grew 65% in 2007 from 2006 levels and is expected to grow 80% to 90% in 2008. Nine new discoveries were drilled in 2007, and production from Pioneer's operated Jenein Nord block commenced during the fourth quarter. Jenein Nord oil production will gradually increase during 2008 as wells are tied in and gross facility capacity is expanded from 5,000 BPD currently to 10,000 BPD in the third quarter and 20,000 BPD by year end. Pioneer plans to drill 15 to 17 wells in Tunisia during 2008.
Offshore South Africa, gas and condensate production from the South Coast Gas project has been initiated. Gas that is currently being reinjected (90 MMCFPD) to support Sable oil production represents approximately 90% of the reserves to be produced through the South Coast Gas project. Strong oil prices have extended the life of the Sable oil project and have led Pioneer to delay the start-up of Sable gas sales, pending the completion of facilities modifications that will allow for the simultaneous production of oil and gas from Sable. The modifications are expected to be completed in late 2008 or early 2009.
Production facilities are in place for Pioneer's Oooguruk project on Alaska's North Slope, and drilling is underway. The Company expects to drill 13 to 15 wells in 2008 and initiate production during the first half of the year. First sales are expected mid-year. Pioneer's net sales from the project are expected to reach 3,000 BOEPD to 4,000 BOEPD by year-end 2008.
On the Cosmopolitan project, offshore Kenai Peninsula, Pioneer has completed the drilling and testing of a horizontal appraisal well from an onshore pad. The initial unstimulated well test results are encouraging, indicating incremental production potential from a second zone ranging from 400 BOPD to 500 BOPD. The Company plans to begin permitting activities and continue facilities planning during 2008 for a potential future development of the project and to drill another appraisal well in 2009.
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