DALLAS, April 3 /CNW/ - Pioneer Natural Resources Company (NYSE: PXD)
announced today that the Company has discovered a new gas field in northern
Alberta and initiated production at a gross rate of approximately 18 million
cubic feet of gas per day (MMcfpd) from three wells. Pioneer has a 100%
working interest and a 75% net revenue interest in the new field assuming a
25% sliding-scale government royalty.
The new field is located within a trend of Devonian and Cretaceous aged
gas fields that have produced more than 2.2 trillion cubic feet of gas. The
initial discovery well was drilled during the prior winter season in early
2006. Field operations are limited to the winter season in this area of
Alberta. This winter, Pioneer drilled three successful development wells and
constructed gas processing facilities and gathering pipelines. Within a week,
production is expected to reach a sustainable rate of 24 MMcfpd, fully
utilizing the initial capacity of the gas processing facilities in place. The
facilities can be readily expanded to 40 MMcfpd with additional compression to
accommodate future drilling success.
The gas reservoir in the new field is very shallow at only 2,000 feet,
and the producing wells are flowing gas at rates that are 5 to 10 times the
historical average for the trend. Permeability varies significantly and is
unusually high in the producing wells. Horizontal drilling was used for the
first time in this area and is also contributing to the high production rates.
Two of the three producing wells were drilled as horizontal wells with
laterals of approximately 300 feet. The total cost to drill, complete and tie
in the producing wells has averaged $1.2 million per well.
Pioneer has acquired a significant land position within this gas field
trend of more than 375,000 acres at an average working interest of 98% for a
cost of less than $70 per acre. Six look-alike prospects have also been
identified on these lands, and two prospect wells have tested gas and are
awaiting development. Pioneer plans to test these prospects in future winter
operation windows and will be able to produce successful wells through the
Pioneer facilities constructed this past winter. Total gas resource potential
from these prospects is currently estimated to be 50 to 180 billion cubic
"I am excited to announce this new discovery," stated Scott Sheffield,
Pioneer's Chairman and CEO. "Since drilling the discovery last year, our team
in Canada has done an outstanding job building our substantial acreage
position and constructing facilities to bring this production online. With
relatively low well costs and high flow rates, this new play is expected to
deliver strong returns and make a significant contribution to Pioneer's
projected 2007 production growth in Canada of 30% to 35%."
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. For more information, visit Pioneer's
website at www.pxd.com.
Except for historical information contained herein, the statements in
this News Release are forward-looking statements that are made pursuant to the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements and the business prospects of Pioneer are
subject to a number of risks and uncertainties that may cause Pioneer's actual
results in future periods to differ materially from the forward-looking
statements. These risks and uncertainties include, among other things,
volatility of oil and gas prices, product supply and demand, competition, the
ability to obtain environmental and other permits and the timing thereof,
other government regulation or action, third party approvals, international
operations, the costs and results of drilling and operations, availability of
drilling equipment, Pioneer's ability to implement its business plans or
complete its development projects as scheduled, access to and cost of capital,
the assumptions underlying production forecasts, uncertainties about estimates
of reserves, quality of technical data or environmental and weather risks.
These and other risks are described in Pioneer's 10-K and 10-Q Reports and
other filings with the Securities and Exchange Commission.
Cautionary Note to U.S. Investors -- The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved reserves
that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and
operating conditions. Pioneer uses certain terms in this release, such as
"resource potential" or other descriptions of volumes of reserves potentially
recoverable through additional drilling or recovery techniques that the SEC's
guidelines prohibit Pioneer from including in filings with the SEC. These
estimates are by their nature more speculative than estimates of proved
reserves and accordingly are subject to substantially greater risk of being
recovered by Pioneer.
For further information:
For further information: Pioneer Natural Resources Company Investors:
Frank Hopkins or Scott Rice, 972-444-9001 or Media and Public Affairs: Susan