Sunday, February 19, 2012

Barnett Shale Combo Play - Oil Field

By Tim -

Pioneer Natural Resources (PXD) - Barnett Shale Combo Play - Oil Field Texas

Pioneer Natural Resources (PXD) is out with their Barnett Shale Combo Play update. The Barnett Shale combo play is a zone of oil and natural gas.

In the liquids-rich Barnett Shale Combo play, Pioneer has built a 78,000 net acreage position, representing more than 1,000 drilling locations. The Company drilled 43 wells in 2011 and placed 42 wells on production. Pioneer operated two rigs in the play for much of 2011 and plans to remain at this level through 2012. The Company expects to increase to four rigs in 2013.

Production in the fourth quarter for the Barnett Shale Combo play was 6 MBOEPD, up from 4 MBOEPD in the third quarter. The Company expects production to increase from an average of 4 MBOEPD in 2011 to 7 MBOEPD to 9 MBOEPD in 2012 under the current two-rig program. With the expected increase to four rigs in 2013, production is forecasted to grow to 12 MBOEPD to 16 MBOEPD in 2013 and 18 MBOEPD to 23 MBOEPD in 2014. Production is comprised of 60% liquids (oil and NGLs) and 40% gas.

Pioneer’s internal rate of return in the Barnett Shale Combo play is expected to be 30% before tax. This assumes a targeted per-well drilling cost of $3.5 million for 5,000-foot lateral wells, a gross EUR of 460 MBOE and flat commodity prices of $100 per barrel for oil and $4 per MCF for gas. The internal rate of return has been impacted by the low gas price environment.