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Pioneer teases shoppers with Clipper find Company sets Oct. 17 as start of deepwater property sale; Gulf struggles with restoring production in wake of storms Ray Tyson Petroleum News Contributing Writer
Exploration and production independent Pioneer Natural Resources, which along with a lot of other Gulf of Mexico producers suffered at least some effects from two major hurricanes this year, has dangled a carrot in front of would-be buyers of its oil and gas properties in the deepwater Gulf.
Meanwhile, nearly 70 percent of oil and well over half of natural gas production, as of Oct. 13, remained shut-in across the Gulf due to hurricanes Rita and Katrina, according to the U.S. Minerals Management Service.
Pioneer, in the same press release it announced a discovery on its Clipper prospect, said its 55 percent share of Clipper would be part of a sales package that includes Pioneer’s entire deepwater portfolio in the Gulf.
Interestingly, the company said it also would open a data room to prospective buyers of its Gulf properties on Oct. 17 in Dallas, Texas, just four days after announcing the Clipper discovery on Green Canyon Block 299.
“It was a nice coincidence,” Pioneer spokeswoman Susan Spratlen told Petroleum News. Pioneer operates Clipper, which was characterized by the company last June as an “amplitude play.” No details on Clipper Pioneer would not provide any details on the magnitude of the Clipper discovery, which is 45 percent owned by two private companies that Pioneer refused to identify.
Pioneer would rather “let the buyer make his own decision” on Clipper’s commercial potential, Spratlen said.
Included in the overall sales package will be existing Pioneer production and other assets from Canyon Express, Devils Tower and the Falcon Corridor, discoveries under development at Ozona Deep and Thunder Hawk, as well as the company’s interest in 90 deepwater exploration blocks.
Pioneer announced in early September that it wanted to exit the deepwater Gulf of Mexico, in part to reduce its “risk profile,” including exposure to hurricanes. The company slashed its exploration budget and said it would reallocate cash savings to more predictable onshore development and extension drilling in North America. Paladin won’t be drilled Among the prospects to be offered for sale is Pioneer’s 40 percent stake in Paladin, a Green Canyon sub-salt play that was scheduled to be drilled following Clipper. However, because of delays caused by the massive hurricanes and the timing of the planned divestiture sale, Pioneer said it filed “a suspension of operations extension” request with the MMS to defer drilling of the Paladin exploration well.
Pioneer is hoping to close the sale around the end of this year, leaving little or no time to complete initial exploratory drilling on Paladin, or to follow up with an appraisal well at Clipper, Spratlen explained.
However, she said the company does plan to drill three to four wells before year-end in the relatively shallow waters of the Gulf’s continental shelf, on Pioneer properties not included in the sale. But Pioneer said it now expects to spud its first shelf exploration well in late October due to rig delays caused by the hurricanes.
Other than temporary production shut-ins, Pioneer’s offshore facilities suffered only minor damage from Rita and Katrina, the company said, estimating that by the week ending Oct. 15 only about 15 percent of its Gulf production would remain shut-in. Gulf slow to recover Overall, the Gulf has been slow to recover from Rita and Katrina. More than seven weeks after offshore operators began evacuating platforms and drilling rigs ahead of the first storm, 68.75 percent or 1.031 million barrels of oil and 56.70 percent or 5.67 billion cubic feet daily of natural gas production remained shut-in, MMS said in its Oct. 13 Gulf report.
Since MMS began reporting hurricane-related production shortfalls on Aug. 26, a total of 56.733 millions barrels of oil remained shut-in as of Oct. 13, representing 10.344 percent of Gulf annual oil production of 547.5 million barrels. During the same period, a total of 283.266 billion cubic feet of natural gas remained shut-in, or 7.760 percent of Gulf annual gas production of 3.65 trillion cubic feet, MMS said.
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