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Pioneer Initiates Gas Production Offshore South Africa
DALLAS--(BUSINESS WIRE)--Oct. 4, 2007--Pioneer Natural Resources Company (NYSE:PXD) today announced the start up of production from the South Coast Gas project (SCG) in Block 9, offshore South Africa. Pioneer holds a 45% working interest in the project, and PetroSA, the South African national oil company, has a 55% working interest and is operator. Pioneer's production from the project is sold to PetroSA under a gas and condensate sales agreement and will provide feedstock for PetroSA's onshore gas-to-liquids (GTL) plant in Mossel Bay. The prices to be received for both gas and condensate sold under the sales agreement are tied to Brent oil prices.
Gas and condensate production from five wells is expected to reach approximately 50 million cubic feet of gas equivalent per day (MMCFEPD) by the end of 2007. Within 12 to 18 months, production from the project is expected to rise significantly as oil production operations are completed at the Sable field and Sable gas production is tied into the project.
As a result of higher oil prices, the oil production life of the Sable field has been extended, and gas will continue to be reinjected into the field to enhance oil recovery. Gas development drilling in the Sable field is complete, and when Sable gas production is tied into SCG in late 2008 or early 2009, the project is expected to reach peak production of 100 MMCFEPD to 120 MMCFEPD. On average, gas condensate is expected to represent approximately 20% to 30% of total SCG production.
"The South Coast Gas project is an important component of our 12+% production per share annual growth target over the 2007 through 2010 period, and we're very pleased that the development phase of the project has been completed in the time expected. We appreciate the efforts of PetroSA in accomplishing this goal, and look forward to continuing our successful relationship," stated Scott Sheffield, Pioneer's Chairman and CEO. "With the completion of SCG and considering that a majority of the capital costs related to our Oooguruk development on the North Slope will be invested by the end of 2007, we expect our 2008 drilling and development budget to decrease significantly as compared to 2007 to approximately $1 billion, primarily focused on Pioneer's four core areas - Spraberry, Raton, Edwards and Tunisia."
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, 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, Pioneer's ability to implement its business plans 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.
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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