NEWS BULLETIN

February 06, 2006 --- Vol. 12, No. 8February 2006

Pioneer sanctions Oooguruk; gravel hauling to begin immediately

Pioneer Natural Resources Co. said this morning that it has approved and is beginning development of its North Slope Oooguruk field. Pioneer is the operator of the field, which is in the shallow waters of the Beaufort Sea approximately eight miles northwest of the Kuparuk River unit.

Pioneer said it will immediately begin operations to install an offshore gravel drilling and production site and plans to complete gravel hauling activities in the 2006 winter construction season.

Pioneer has a 70 percent working interest in the field. Eni Petroleum has a 30 percent working interest. Pioneer said Eni is expected to make its participation election for the project during the first quarter of 2006. Pursuant to a January 2004 farmout agreement, ConocoPhillips retains the right to elect to participate in the project.

The gravel drilling and production site will be constructed this winter, the company said. A subsea flowline and facilities will be installed during 2007 to carry produced liquids to existing onshore processing facilities at the Kuparuk River unit. Some 40 horizontal wells will be drilled to develop 50 million to 90 million barrels of estimated gross oil resources. The company said drilling could begin as early as fall 2007.

Total gross capital investment for the project, including drilling and facility costs, is estimated at $450 million to $525 million. Production is expected to peak in 2010. “Using current oil prices, the field is expected to produce for at least 25 years before reaching its economic limit,” Pioneer said.

“The Oooguruk field development is the first of what I believe will be many successful projects for Pioneer in Alaska and adds a new long-lived asset to our strong U.S. base,” Pioneer Natural Resources Chairman and CEO Scott Sheffield said in a statement.

Ken Sheffield, president of Pioneer’s Alaska subsidiary, said the company appreciated “the cooperative spirit demonstrated by the State of Alaska, the North Slope Borough and the federal regulatory agencies in working with Pioneer” on its plan and allowing it to maintain its project schedule.


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