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Pioneer Announces Capital Budget and Production Target for 2008
DALLAS--(BUSINESS WIRE)--Dec. 19, 2007--Pioneer Natural Resources Company (NYSE:PXD) announced today that its board of directors has approved a 2008 capital budget of $1 billion (which excludes acquisitions, asset retirement obligations, capitalized interest and geological and geophysical G&A), down significantly from comparable 2007 capital spending. The decrease primarily relates to the completion of facilities construction for the South Coast Gas project off the coast of South Africa and the Oooguruk project on the North Slope of Alaska, the sale of all Canadian assets and the elimination of higher-risk exploration. Using current strip prices for oil and gas, Pioneer anticipates that its 2008 capital budget will approximate its cash flow from operations. Pioneer expects to increase average annual oil and gas production per share by at least 12% for 2008, pro forma for the divestiture of Canadian assets.
Approximately 90% of the capital budget will be focused on low-risk development drilling and resource play extension in Pioneer's four core onshore areas (Spraberry, Raton, Edwards Trend and Tunisia). The remaining 10% will be focused primarily on Oooguruk and Barnett Shale development drilling.
Approximately 60% of the 2008 budget is earmarked for oil drilling. This includes a 350-well program for the Spraberry field in West Texas, similar to the 2007 activity level. It also includes a 15 to 20 well program in Tunisia, where the Company plans to expand its 2007 drilling success in the Jenein Nord, Adam and Borj El Khadra blocks and commence a drilling campaign in the Anaguid block after completing a current 3-D seismic shoot. Lastly, with production facilities now complete, drilling has commenced in the Oooguruk field on the North Slope. A 15-well program is planned for 2008, consisting of disposal, injection and production wells, with first oil sales from Oooguruk expected mid-year.
The remaining 40% of the 2008 budget is focused on gas projects. In the Raton Basin in Southeast Colorado, Pioneer plans to drill approximately 175 gas wells. In the Edwards Trend in South Texas, the Company plans to build on the successful drilling campaigns of 2006 and 2007 by drilling an additional 35 to 40 wells in 2008. Multiple isolation packer frac technology will continue to be utilized to increase the average recoverable gas reserves per well. Other gas drilling is expected to include approximately 15 to 20 wells in the Barnett Shale, where Pioneer commenced building a core position during 2007.
Scott Sheffield, Pioneer's Chairman and CEO, stated, "Our 2008 capital program is expected to deliver double-digit growth from each of our four core onshore areas when compared to 2007. I am confident that this growth, coupled with the mid-year startup of Oooguruk production and the recent start-up of South Coast Gas production, will allow us to increase production per share by at least 12% in 2008. I am also confident that this capital program will deliver another year of attractive all-in finding and development costs in the range of $14 to $18 per barrel oil equivalent."
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, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to replace reserves, implement its business plans (including its plan to repurchase stock) or complete its development projects as scheduled, access to and cost of capital, the assumptions underlying production forecasts, uncertainties about estimates of reserves, 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. Pioneer undertakes no duty to publicly update these statements except as required by law.
CONTACT: Pioneer Natural Resources Company
SOURCE: Pioneer Natural Resources Company
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