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Pioneer budgeting $190MM for Alaska The budget increase accommodates appraisal drilling and an expansion of a completion technique the company tested last year Eric Lidji For Petroleum News
Pioneer Natural Resources Inc. is budgeting $190 million in spending for Alaska this coming year, the Texas independent said during a quarterly earnings call on Feb. 14.
The figure is up from a budget of $135 million for 2012 and $100 million for 2011.
Pioneer plans to spend some $3 billion across its portfolio this coming year. Of that, more than half, or $1.65 billion, would go toward its Permian Basin operations, while $575 million would go to the Eagle Ford shale and $185 million would go to the Barnett Shale.
This winter, Pioneer is running a one-rig development program from its near shore Oooguruk unit, where it plans to drill three wells into the Nuiqsut and one into the Torok.
Following “phenomenal” results last year, Pioneer plans to complete those wells using a reservoir stimulation method it began in Texas. The mechanically diverted fracturing system, also known as “plug and perf,” aims to focus more energy at the point of the fracture and stimulate a larger portion of a reservoir. Using the system, a well into the Nuiqsut last year produced some 5,600 barrels per day at its peak and continues to produce some 2,000 bpd “on a flat line,” according to Chief Operating Office Tim Dove.
The company is currently mobilizing the considerable equipment required for the work and plans to begin those completion activities “in the next couple of weeks,” Dove said.
The program could yield significant results. Considering that the first well completed using the system produced more at its peak than all the other Oooguruk wells combined, “We could have a pretty material bump in production if all goes well,” Dove said.
Pioneer produced 4,102 barrels of oil per day from its Oooguruk unit during the fourth quarter of 2012, down slightly from 4,404 bpd during the third quarter but up slightly from 3,824 bpd in the fourth quarter of 2011. Companywide, Pioneer produced 164,812 bpd during the quarter, up 3 percent quarter over quarter and 20 percent year over year.
Pioneer earned $14 million in Alaska production tax credits during the quarter.
Appraising Nuna This winter, Pioneer also plans to drill the Nuna No. 2 well. The well would offset Nuna No. 1, the onshore well that Pioneer drilled last winter to an offshore target in the southern reaches of the Torok formation, and the basis for a 50 million barrel discovery.
Last year, the Nuna No. 1 well produced some 2,000 bpd with facility constraints, according to the company. While those constraints remain, Pioneer said it recently brought the well back online and is now reporting production rates of around 2,800 bpd.
Pioneer will decide whether to proceed to front end engineering and design for a Nuna development pending the results of the wells, Dove said. Under current unit agreements, Pioneer must decide by June 30, 2014, whether it intends to sanction the project.
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