NEWS BULLETIN

May 07, 2012 --- Vol. 18, No. 35May 2012

Pioneer estimates 50 million barrel discovery at Nuna

Pioneer Natural Resources Alaska Inc. is announcing a 50 million barrel discovery at its budding Nuna development based on exploration drilling completed this past winter.

The Texas-based independent said the onshore Nuna No. 1 well tested at an initial production rate of 2,000 barrels per day. Pioneer suspended the well, but said it would likely conduct a longer test next winter in addition to drilling an appraisal well at the prospect.

The well tested the southern extent of the Torok formation, the third and shallowest producing formation at the nearshore Oooguruk unit northwest of the Kuparuk River unit. Pioneer COO Tim Dove called it “one of the best wells we drilled on the Torok.”

The Torok formation would underpin the Nuna development that Pioneer proposed for the region last year and recently revised in an updated plan of operations for its leases.

While Nuna No. 1 appears to be a success, Pioneer wasn’t as fortunate on its other exploration well this winter, the offshore Sikumi No. 1 located two miles southwest of Oooguruk Island. Its preliminary target in the Ivishak formation proved to be wet and although another zone encountered some natural gas, it was “basically non-commercial,” Dove said. The company wrote down a $19 million loss for the unsuccessful well.

Concurrent to that exploration work, Pioneer also reported success from its development efforts at Oooguruk using a “plug and perf” completion technique, also known as “mechanical diversion” fracturing system, to stimulate a larger portion of a reservoir.

A development well into the Nuiqsut formation completed using the technique produced at an initial rate of 4,000 barrels per day, “by far our best Nuiqsut well,” Dove said.

The company is now considering additional candidate for the technique.

Pioneer produced 4,000 barrels per day from Alaska in the first quarter, flat from the fourth quarter of 2011 and down from 5,000 barrels per day in the first quarter of 2011.

—Eric Lidji

See story in May 13 issue, available at 11 a.m., Friday, May 11, at www.PetroleumNews.com


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