Pioneer announces 11% production increase from Spraberry/Wolfcamp

10/18/2017

DALLAS -- Pioneer Natural Resources Company has announced that production for the third quarter of 2017 was 276,000 boed, an increase of 17,000 boed, or 6% from the second quarter of 2017. Total oil production for the quarter was 162,000 bpd, an increase of 15,000 bpd, or 10% from the second quarter of 2017. Total Spraberry/Wolfcamp and horizontal Spraberry/Wolfcamp oil production increased 11% and 15%, respectively, compared to the second quarter of 2017, both driven by the company’s successful Spraberry/Wolfcamp horizontal drilling program. Total natural gas liquids (NGL) production for the third quarter was 57,000 bpd and total gas production for the third quarter was 340 MMcfd.

Third quarter production was negatively impacted by 3,500 boed, due to i) the effects of Hurricane Harvey on the company’s Spraberry/Wolfcamp and South Texas operations and ii) unplanned downtime at the third-party facility where gas from the company’s West Panhandle field in Texas is processed. The production lost from these curtailments was mostly gas and NGLs. Adjusting for the lost production related to the hurricane and the unplanned downtime at the third-party gas processing plant, Pioneer’s third quarter production would have been at the top end of Pioneer’s production guidance range of 274,000 boed to 279,000 boed.

The following areas of Pioneer’s Texas operations were adversely impacted by Hurricane Harvey:

  • Spraberry/Wolfcamp - Pioneer’s Spraberry/Wolfcamp facilities in West Texas were not damaged by the hurricane. This field produces oil and associated liquids-rich gas. The liquids-rich gas includes NGLs that are separated from the gas at various third-party Permian basin gas processing plants and transported to third-party facilities in Mont Belvieu, Texas, for fractionation. These fractionation facilities sustained flood-related interruptions from Hurricane Harvey. As a result, the Permian basin gas processing plants had to curtail NGL shipments to Mont Belvieu from late August through mid-September, which limited the amount of liquids-rich gas production the plants could receive from producers in Permian basin fields. The impact to Pioneer’s Spraberry/Wolfcamp production was a loss of approximately 1,300 boed for the third quarter, with most of this loss being gas and NGLs.
  • South Texas - No significant damages were incurred at Pioneer’s facilities in South Texas. The company produces oil, condensate and associated liquids-rich gas in this area. Production was shut in and fracture stimulation operations ceased on new wells for safety reasons when the storm hit the area on Aug. 25. Production was brought back on line and fracture stimulation operations resumed during the first half of September after the storm passed. The impact to Pioneer’s third quarter production in the Eagle Ford Shale and other nearby fields was a loss of approximately 900 boed.

In addition to the aforementioned hurricane impacts, Pioneer’s third quarter production was impacted by unplanned downtime at the Sunray, Texas, gas processing plant, which is owned by a third party, where the liquids-rich gas from Pioneer’s West Panhandle field in Texas is processed into gas and NGLs. Pioneer had to shut in all production from the West Panhandle field (approximately 8,000 boed) in mid-September after the Sunray plant incurred significant damage due to a fire. The impact to third quarter production was approximately 1,300 boed, with most of this loss being gas and NGLs. Repairs to the Sunray plant are underway, but it is expected to be several months before the plant can be placed back into service. As a result, the third party and Pioneer are making modifications to their respective facilities to enable field production to resume, with the gas volumes being rerouted to the third party’s Spearman, Texas, gas processing facility. The company expects these modifications to be completed and production to resume in late October or early November.

Despite the lost production during the third quarter related to the hurricane and unplanned downtime at the third-party gas processing plant, Pioneer continues to expect full-year 2017 production growth to be within its targeted growth range of 15% to 16% (269,000 boed to 271,000 boed). In addition, oil production for full-year 2017 continues to be targeted within a range of 156,000 barrels oil per day (BOPD) to 158,000 BOPD, or an increase of 17% to 18% compared to 2016.

During the third quarter, the average realized price for oil was $45.3/bbl. The average realized price for NGLs was $18.96/bbl, and the average realized price for gas was $2.58/Mcf.

A schedule highlighting Pioneer’s production by commodity by area for the third quarter of 2017 is attached.

Further information regarding the third quarter 2017 results will be discussed during the company’s earnings conference call at 9:00 a.m. CDT on Nov. 2, 2017.

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