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Pioneer drops nearly 150,000 acres Move represents shift from exploration to development, lower prices; 51 leases split between Beaufort Sea and south of Prudhoe; company says focus now on Oooguruk development drilling Eric Lidji Petroleum News
Pioneer Natural Resources relinquished 51 leases in April, according to state records.
The leases cover 145,448 acres spread across two areas. The company gave up seven leases in the waters of Stefansson Sound, north of Prudhoe Bay, and 44 leases in the central North Slope, south of Prudhoe. The relinquishments went into effect on April 30.
The relinquishment represents both a shift of focus from exploration work to development work for Pioneer in Alaska, and an eye on keeping costs down in a lower price environment, Pioneer spokesman Tadd Owens told Petroleum News May 20.
“Successfully executing our development drilling plan at Oooguruk is the number one priority for the Alaska division,” Owens wrote in an e-mail. “With so much of our human and capital resources devoted to our operating areas it was unlikely we would be engaged in any activities on our exploration acreage over the next few years.”
Pioneer arrived in Alaska as an explorer, but within a few years transitioned into being a developer on the North Slope. After a string of unsuccessful exploration wells, the company indefinitely discontinued its exploration activities in Alaska in late 2007.
The company brought the Oooguruk unit online last summer.
Other acreage dropped, sold Along with partners ConocoPhillips and Anadarko, Pioneer gave up 300,000 acres in the National Petroleum Reserve-Alaska in September 2007. Last summer, Pioneer sold three leases in Gwydyr Bay to a joint venture led by Brooks Range Petroleum Corp.
The newly relinquished leases south of Prudhoe Bay include Hailstorm No. 1, the well Pioneer drilled in the NE Storm unit with ConocoPhillips in the winter of 2005 and 2006.
The leases also include the Hemi State 03-09-11 well drilled by Mobil in 1969, the Hemi Springs Unit No. 3 well drilled by ARCO Alaska in 1985, the Toolik No. 2 well drilled by ARCO Alaska in 1969 and the Sequoia No. 1 drilled by Conoco in 1992.
Pioneer is at least the third company to give up state or federal leases in the Beaufort Sea this year, following Shell and ConocoPhillips. Pioneer never drilled on its Beaufort leases, although the holdings sat near the Midway Islands, where Standard Oil of Ohio drilled Reindeer Island No. C-1 in 1969 and Reindeer Island Strat Test No. 1 in 1979.
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