Pioneer lowers production estimate for third quarter

Ray Tyson

Big independent Pioneer Natural Resources has lowered its production estimates for the 2004 third quarter because of well trouble at its Harrier field in the deepwater Gulf of Mexico and because of hurricane-related downtime at its Canyon Express and Devils Tower systems in the Gulf.

Pioneer now expects total company production for the third quarter to average 180,000 to 185,000 barrels of oil equivalent per day, the company said Sept. 7.

Pioneer said it was forced to shut in production at its new Harrier field in the Falcon Corridor because of early water encroachment. However, a sidetrack was expected to be spud in mid-September to access an adjacent fault block in the field and could be producing by the end of October, the company said, adding that overall reserves for the Falcon Corridor were not expected to change significantly due to Harrier.

The company said Harrier reserves should be offset by reserve additions related to better than expected production data for the nearby Falcon field. Pioneer also plans to initiate a drilling campaign in the Falcon Corridor during the first half of 2005 that should include two to three exploration wells and another sidetrack targeting additional reserves, the company said.

Meanwhile, Prudential Equity Group lowered its 2004 third-quarter earnings estimates for Pioneer to 55 cents per share from 65 cents. For the fourth quarter, Prudential’s forecast was lowered to 75 cents per share from 80 cents.

“With early water encroachment in the Harrier Field only nine months after initial production, we believe that ultimate recovery from this reservoir could be lower than initially thought,” Prudential said.