Pioneer expects to spend $15 million in Alaska in 2003

Reprinted from The Independents

Pioneer Natural Resources Co. told PNA in early November that it expects its Alaska capital budget will be $15 million in 2003, up from $3 million in 2002. (See related brief on page 1.)

One of the country’s largest independents, Pioneer officially entered Alaska in October when it signed an agreement with Armstrong Resources LLC for a 70 percent working interest in 10 state oil and gas leases on the North Slope. The Dallas-based company formed Pioneer Natural Resources Alaska Inc. to do business in Alaska.

Pioneer plans to drill as many as three exploration wells in the winter of 2002-2003 on its Northwest Kuparuk prospect, which lies in the shallow waters of the Beaufort Sea between Thetis Island and the Kuparuk River unit.

“Independents have had success in many other basins that were previously dominated by the majors, and we see the opportunities in Alaska to be similar; an opportunity for smaller, more agile, aggressive companies,” Scott D. Sheffield, Pioneer’s chairman, president and CEO, told PNA. “How many basins have had a second, third or fourth exploration and development lives after the majors wind down growth investment in an established basin? — almost every basin.”

If exploratory drilling is successful, Sheffield said Pioneer is expecting first production from its Northwest Kuparuk prospect in 2005 or 2006.