Dallas-based Pioneer Natural Resources Co. is cutting jobs and scaling back operations in its Trinidad, CO, operating area, a dry natural gas play in the Raton Basin. The company said low gas prices were the culprit.
Pioneer is laying off about 60 people from its land and drilling units, and it is reorganizing four service departments and moving them to Pioneer Natural Resources Well Services LLC. More than half of the employees losing their Trinidad jobs are to be offered positions in other areas.
“The U.S. shale gas boom and the rise in natural gas production associated with unconventional oil plays have created an oversupply of natural gas in the United States, driving down current and projected prices,” said a spokesperson, who added that low returns from dry gas can’t compete with strong earnings from liquids-rich areas. The Trinidad operations are going to focus on “managing existing production and matching workforce size to expected activity levels.”
Pioneer is allocating close to 88% of this year’s capital drilling budget to oily plays in Texas, including the Eagle Ford Shale and Permian Basin.
In 2012 the operator exited dry gas operations and downsized maintenance and roustabout services in the Raton Basin, which it had once said held 2 Tcf of potential (see Daily GPI, April 14, 2008).
Pioneer plans to “continue to maximize the production from our Raton Basin asset,” albeit at the anticipated reduced levels of activity, said Tom Sheffield, vice president of the Rockies asset team. “The Raton Basin is a significant component of Pioneer’s producing asset base, and we plan to maintain a strong local presence and continue our support in the Las Animas County and Trinidad communities.”
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