Daily GPI / NGI All News Access

Pioneer Beats '03 Production Forecast, Sees 15-25% Growth This Year

Pioneer Beats '03 Production Forecast, Sees 15-25% Growth This Year

Coming in above its estimate for oil and gas production last year, Pioneer Natural Resources also reported Monday that it scored a new record for net income, with $410.6 million ($3.46/share), compared with $26.7 million (23 cents) in 2002.

The Dallas-based independent's production levels were up 36% year-over-year, and were "above the range," according to CEO Scott Sheffield. He attributed the strong growth to Pioneer's Falcon ramp-up in the Gulf of Mexico (GOM), as well as new production in Argentina, Africa and Tunisia.

"We entered the year in great shape, with an inventory of promising exploration prospects and legacy assets that offered the possibility for continued expansion, and we capitalized on those opportunities, delivering solid reserve growth at a competitive cost," said Sheffield. "We enter 2004 with what I believe are even better opportunities, with an exciting exploration portfolio, several unbooked discoveries that we will work to commercialize, and potential to expand existing core areas."

Pioneer added 108.8 MMboe of proved reserves during 2003, replacing 193% of production at a finding cost of $6.64/boe. The company added 94.9 MMboe from extensions, discoveries and revisions and acquired 13.9 MMboe. Pioneer produced 56.5 MMboe last year, and said that no reserves were sold during the year.

Fourth quarter oil and gas sales averaged 167,690 boe/d. Oil sales averaged 43,574 bbl/d, while natural gas liquids sales averaged 22,889 bbl/d. Gas sales in the fourth quarter averaged 607 MMcf/d. North American gas prices averaged $4.06/Mcf. In 4Q2002, Pioneer reported oil sales of 31,248 bbl/d, natural gas liquids sales of 22,591 bbl/d and gas sales of 380 MMcf/d. Realized prices were $2.75/Mcf.

For 2004, Pioneer is forecasting 15-25% production growth. First quarter 2004 production is expected to average 168,000-183,000 boe/d, which will include incremental production from the GOM Harrier field, which began producing in January. "The first quarter range includes a number of high-impact deepwater GOM wells that are in progress, up to five wells expected in Gabon to further refine development plans and test a new exploration target, increased exploration drilling in Argentina and the winter drilling campaign in Canada," Sheffield said. Due to the width of its production range, Pioneer plans to update guidance when most of the wells are drilled.

As of Dec. 31, 2003, total proved oil and gas reserves were 789.1 MMboe (4.7 Tcfe), including 422.8 million bbl of crude oil and natural gas liquids and 2.2 Tcf. Proved developed reserves account for approximately 65% of total proved reserves. Proved reserves were booked for discoveries in Gabon and the deepwater Gulf of Mexico and were increased in Pioneer's onshore U.S. and Argentine fields. Netherland, Sewell and Associates audited the proved reserves of fields that represent approximately 89% of the current value (using a 10% discount rate) and approximately 87% of the quantity of Pioneer's proved reserves at year-end.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.