Inclement weather in Eagle Ford Shale country crimped Pioneer Natural Resources Co. production during the second quarter. On Wednesday Pioneer said output was below the low end of guidance, but there was strong production growth in the Permian Basin.
"Strong Spraberry/Wolfcamp [Permian Basin] production performance in the second quarter (119,000 boe/d) was partially offset by lower-than-expected production in the Eagle Ford Shale (46,000 boe/d)," the company said in a production update in advance of second quarter earnings.
"The shortfall in the Eagle Ford Shale was primarily due to fewer wells being placed on production during the quarter as a result of weather delays and well performance issues in LaSalle County, an area outside of Pioneer's core acreage in Karnes and Dewitt counties. Second quarter production in the West Panhandle field (7,000 boe/d) was also negatively impacted by a longer-than-expected turnaround at the Fain gas processing plant and weather impacts."
Overall, production averaged 197,000 boe/d in the second quarter, of which 51% was oil. Oil sales averaged 101,000 b/d, natural gas liquids (NGL) sales averaged 37,000 b/d, and natural gas sales averaged 356 MMcf/d. Guidance for the quarter was 198,000-203,000 boe/d.
Spraberry/Wolfcamp production grew by 7,000 boe/d, or 6%, compared to the first quarter, driven by a "successful" horizontal drilling program, the company said. Fifty-five horizontal wells were placed on production, of which 28 were in Northern Spraberry/Wolfcamp acreage position and 27 wells were in the Southern Wolfcamp joint venture area.
The majority of the horizontal wells drilled across the northern acreage position were Wolfcamp B interval wells. Average production from these wells is tracking estimated ultimate recoveries (EUR) of more than 1 million boe, the company said. Five Lower Spraberry Shale horizontal wells were also placed on production across the northern acreage with average production results tracking EURs of 1 million boe.
Production from the Eagle Ford was about 2,000 boe/d below the company's forecast. Pioneer had expected to place 42 wells on production. However, due to record rainfall and flooding in Texas during the quarter, only 33 wells were placed on production in Karnes and DeWitt counties.
Pioneer placed 15 Eagle Ford wells on production on the Washburn Ranch lease in LaSalle County last year. Due to a fire in May 2014 at the central gathering plant for the area, production from these wells was significantly curtailed until the end of the year. As a result, the production forecast developed for 2015 was based on limited data, and actual production for the 15 wells came in about 1,000 boe/d below the second quarter forecast. Pioneer has postponed further drilling until well performance to date is better understood.
In the West Panhandle area, the Fain gas processing plant had a scheduled one-week turnaround in mid-May that lasted about four weeks before normal operations were restored. In addition, production was curtailed during part of the quarter also on the state’s record rainfall and flooding. The result of these factors was a production loss of about 1,000 boe/d during the quarter.
The company is retaining its full-year 2015 production growth forecast at 10%-plus. "Although production growth in the Eagle Ford Shale is now forecasted to be nominal in 2015, production from the Spraberry/Wolfcamp is forecasted to grow by 22-24% in 2015 compared to the 20%-plus previously forecasted," the company said.