Pioneer OKs $1.3 billion for ’06 capex

Pioneer Natural Resources said March 8 that its board has approved a 2006 capital budget of $1.3 billion, excluding acquisitions. The amount is about $200 million more than its 2005 capex budget.

The Dallas-based independent said the 2006 capital budget reflects Pioneer’s plan to increase its focus on North American onshore development activities and lower-risk resource plays.

Pioneer reduced its higher-risk exploration spending from 30 percent of its capex budget in 2005 to 10 percent this year, reflecting the company’s “commitment to significantly decrease its spending on higher-risk exploration.”

Pioneer said it is accelerating low-risk development drilling in its core areas in the United States and Canada and expects to drill approximately 950 development wells primarily in the Spraberry, Raton, Pawnee and Horseshoe Canyon fields.

The company said it will be active in the development of two larger-scale projects in 2006, the Oooguruk field on the North Slope of Alaska and a gas development project off the coast of South Africa. The capital budget also includes investments to initiate development of the Clipper discovery in the deepwater Gulf of Mexico.

Pioneer also plans to drill approximately 110 lower-risk exploration and appraisal wells. Coalbed methane pilots are planned in three Rocky Mountain basins and in southern Canada.

The 2006 high-impact exploration budget includes three exploration wells on Alaska’s North Slope (see related stories on page 1 and 4 of this issue), two wells in West Africa, one to two wells in Mississippi and two wells in the Gulf of Mexico Clipper discovery.

Exploration spending includes $25-$65 million for exploration wells in Alaska and Nigeria.

Pioneer expects to grow production over the next five years by 10 percent-plus per year, and intends to exit 2006 with an average daily output of as much as 100,000 barrels oil equivalent per day, a 10 percent increase from 2005.

Currently, Pioneer has one onshore rig running in Alaska, 17 in the Lower 48 states, and three in Canada.

—Petroleum News