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Pioneer Announces Three New Discoveries and Production Outlook for Tunisia
DALLAS--(BUSINESS WIRE)--Oct. 18, 2007--Pioneer Natural Resources Company (NYSE:PXD) today announced continued success in its development and expansion programs in Tunisia, including:
-- Two new discoveries on the Pioneer-operated Jenein Nord Block with 100% success on seven wells since late 2006 -- Continued progress in constructing Jenein Nord production facilities with first production expected late in the fourth quarter of 2007 -- A new discovery on the Adam Concession -- Expectations for Pioneer's net production from Tunisia to grow 80% in 2007 and at least 90% in 2008
Pioneer has a substantial acreage position in the Ghadames Basin of southern Tunisia with an interest in five blocks totaling 3.9 million acres.
Since mid-July, Pioneer has drilled two new operated discoveries on the Jenein Nord Block, Angham and Methaq. Testing has been completed on the Angham well and the Farrah discovery well announced in July. The cumulative rates from individual tests on multiple oil-bearing zones in the two wells totaled approximately 5,000 barrels of oil per day (BOPD). The Methaq well is expected to be tested in November.
With a total of seven discoveries on the Jenein Nord Block since late 2006, Pioneer is constructing production facilities which are planned to have an initial gross capacity of 10,000 BOPD and be expanded to 20,000 BOPD during the second half of 2008. With continued drilling success, the facilities will be capable of being further expanded beyond 20,000 BOPD. Pioneer plans to begin connecting the seven Jenein Nord discoveries to these facilities in late 2007. As the discoveries are tied in, gross production will gradually ramp up during 2008 and is expected to reach 15,000 to 20,000 BOPD by year end. Pioneer will hold a 50% interest in the resulting production concession, assuming that ETAP participates at the maximum 50% level pursuant to the relevant agreements.
In the Adam Concession, Pioneer has participated in 15 wells since 2003 with greater than 90% success. The Company holds a 20% interest in the Concession, and the remaining interest is held by Eni (Operator), Talisman and ETAP, the state oil company. Evaluation has been completed on the Nadir 1 well, a recent new field discovery in the Concession, where four of the six oil-bearing sections in the well tested at an individual zone cumulative rate of approximately 4,000 BOPD. Facilities are in place to commence production from the well by the end of October.
Pioneer and the other participants have acquired approximately 1,450 square kilometers of 3-D seismic to optimize the drilling programs on the Adam, Jenein Nord and Borj El Khadra blocks and plan to acquire an additional 1,900 square kilometers over the next year. Since the 3-D seismic acquisition began, Pioneer has had 100% success in exploration drilling and has identified more than 30 prospects and leads, some with resource potential as large as 25 million barrels oil equivalent. Pioneer plans to spud three additional wells in Tunisia over the remainder of 2007 and 15 to 19 wells during 2008.
A large-scale gas and condensate expansion project that could have a significant impact on Pioneer's production and reserves by 2011 continues to be pursued by Pioneer and the other participants. Sales of gas and condensate from the area are currently limited by the existing infrastructure. Pioneer and other producers in the country are working with the government to evaluate the opportunity to expand infrastructure and supply gas volumes from southern Tunisia to existing markets in northern Tunisia and southern Europe.
"We have built a strong position in the Ghadames Basin of southern Tunisia. This new core area for Pioneer offers low finding and development costs, attractive operating costs and excellent overall investment returns. We expect Tunisia to be an important contributor to our 12+% production per share annual growth target through 2010," stated Scott Sheffield, Pioneer's Chairman and CEO.
Pioneer Natural Resources Company is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States, 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 about Pioneer Natural Resources Company 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 Natural Resources Company 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 commodity 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 and associated international political and economic instability, 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, uncertainties about estimates of reserves, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, acts of war or terrorism.. 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.
CONTACT: Pioneer Natural Resources Company Investors: Frank Hopkins or Scott Rice, 972-444-9001 or Media and Public Affairs: Susan Spratlen, 972-444-9001 SOURCE: Pioneer Natural Resources Company
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