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Pioneer Announces Two New Discoveries and Continued Production Growth in South Texas Edwards Trend
DALLAS--(BUSINESS WIRE)--Oct. 23, 2007--Pioneer Natural Resources Company (NYSE:PXD) today announced continued success with its drilling program in the Edwards Trend in South Texas.
Two new fields have been discovered in the trend, bringing total discoveries in the Edwards expansion area to eight. The two new wells encountered 150 feet to more than 200 feet of vertical gas pay. An appraisal well is currently drilling on one of the discoveries where 3-D seismic is available. Appraisal of the second discovery will begin after 3-D seismic data has been acquired and interpreted in 2008.
Development drilling is also delivering positive results, with current net gas production reaching approximately 60 million cubic feet per day (MMCFPD), a 50% increase since year-end 2006. Average net gas production is expected to exceed the 30% annual growth rate targeted for 2007 and is expected to increase approximately 25% next year based on current 2008 drilling plans. Pioneer continues to add new treating capacity to handle the increasing gas production and is making progress on a 37-mile extension of the Company's existing 44-mile gathering pipeline.
Pioneer's strong growth from the Edwards Trend reflects a successful 2007 drilling program which has focused primarily on lower-risk development wells on existing discoveries with 3-D seismic coverage. Pioneer is utilizing multiple isolation packer devices to fracture stimulate gas pay sections in most of these wells which adds about $1 million to the cost per well, but results in a much more effective stimulation yielding both increased production rates and reserves. Pioneer estimates that the enhanced stimulation is increasing average recoverable gas reserves per well by approximately 1 to 1.5 billion cubic feet (BCF) to an average of 4.5 to 5 BCF per well.
In the Pawnee Field, Pioneer has applied aggressive restimulation techniques to a number of older producing wells. After six months, sustained production continues to average about 2.5 times the rate prior to the restimulation. Similar to new wells being drilled in the Edwards Trend, estimated recoverable gas reserves from restimulated Pawnee wells have increased by an average of 1 to 1.5 BCF per well.
More than 900 square miles of 3-D seismic is being shot over discoveries drilled during 2006 and 2007 to allow for the more accurate location of horizontal development wells. Despite weather-related delays, approximately one-third of the processed data is now in hand and being interpreted. Another third of the data is expected to be available by the end of the first quarter with the remainder being processed through the end of 2008.
"The Edwards Trend is one of Pioneer's four onshore core areas in the U.S. and Tunisia which are delivering consistent production growth and providing the basis for our confidence in achieving our 12+% production per share annual growth target over the 2007 through 2010 period," 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, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to replace reserves, 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 and 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 "recoverable gas reserves" 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
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