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Pioneer Touts Q1 Wolfcamp D IP24s at 4,100 BOEPD; Drilling Activity Up 13% YOY

Share Print Bookmark    |    Friday,May 10,2019

Pioneer Natural Resources Co. reported its Q1 2019 results. Here are the highlights.

During Q1, the Company's Permian drilling, completion and facilities capital expenditures totaled $831 million.

Pioneer Turns on Taps at +13% More Wells YOY in Q1

• Pioneer placed 71 horizontal wells on production during Q1 - up +13% YOY

•  The Company maintains its plan to operate an average of 21 to 23 horizontal rigs in the Permian Basin during 2019, including approximately five rigs in the southern joint venture area. This is comparable to its 2018 average.

Wolfcamp D Pad Avgs. 4,100 BOEPD IP24; More Appraisals Planned

A two-well Wolfcamp D pad that was placed on production early in the first quarter of 2019, which had an average IP24 of 4,100 BOEPD and continues to outperform.

This two-well pad has recorded a 90-day cumulative production of approximately 340 thousand barrels of oil equivalent, with a 67% oil mix. The Company plans additional Wolfcamp D appraisals in 2019.

Stackberry Appraisal

The Company's third multi-zone Spraberry appraisal pad (Stackberry), located in Martin County, consists of five wells: one in the Middle Spraberry, two in the Jo Mill and two in the Lower Spraberry Shale. Cumulative production has outperformed previous horizontal Spraberry wells in the area by approximately 24%. As a result, an additional approximately 30,000 acres in the surrounding area for the Middle Spraberry, Jo Mill and Lower Spraberry Shale intervals have been de-risked, progressing the transition of the Spraberry intervals from appraisal to development mode. As a result of the three Stackberry projects initiated since 2018, approximately 120,000 acres have been de-risked for this type of development.

Realized Prices

For the first quarter, the average realized price for oil was $49.38 per barrel. The average realized price for NGLs was $22.79 per barrel, and the average realized price for gas was $2.50 per thousand cubic feet (MCF). Adjusting for the cash flow uplift attributable to the Company's FT contracts, the average realized oil price would have increased by $8.18 per barrel to $57.56. These prices exclude the effects of derivatives.

Plans to Cut G&A Expenses; Monetize or Accelerate Drilling Inventory

Pioneer is planning to cut G&A expenses, streamlining roles and responsibilities and implementing a flatter reporting structure. The Company is targeting up to $100 million in annual G&A savings to further expand Pioneer's profitability.

Additionally, the Company is evaluating options to monetize or accelerate drilling inventory that is not slated for near-term development; options include cash market divestitures or the use of DrillCo funding arrangements, among others. Long-dated acreage that is subject to lease expiry is being prioritized, therefore bringing value forward.