Dallas-based Pioneer Natural Resources Co. said Tuesday that it replaced 208% of its production last year, and has the potential in the next year to grow its production base 55-60%. The independent reported that its total proved oil and gas reserves stand at 671 MMboe, or 4 Tcfe, including 325 million bbl of crude oil and natural gas liquids and 2 Tcf of natural gas. Pioneer replaced its 2001 production at a finding cost of $7.49/boe.

Excluding 25 MMboe downward revisions because of the decline in commodity prices, the independent actually replaced 268% of its production at a finding cost of $5.81/boe in 2001. Costs totaled $647 million, including $171 million for acquisitions and $476 million for development and exploration activities. Reserves were based on year-end Nymex prices of $19.76/bbl for oil and $2.73/Mcf of natural gas. Proved developed reserves accounted for approximately 70% of total proved reserves.

“Pioneer’s exploration strategy, supported by incremental acquisitions in key areas, has added significant proved reserves and the potential for 55% to 60% production growth over the next 14 months,” said CEO Scott D. Sheffield. “Pioneer also has several projects in the pipeline, in both the appraisal and prospect stages, which offer the potential to extend our production growth into 2004 and beyond.”

Pioneer said it drilled 390 wells last year with an 85% success rate worldwide, including 101 exploration and extension wells with 60% success. The company drilled most of its wells in the United States (271) and Canada (51). The rest were drilled in Argentina, South Africa, Gabon and Tunisia. Domestic drilling included 179 Spraberry oil wells, 41 wells in the Hugoton/West Panhandle gas field and 51 wells in other domestic fields.

Like other producers, Pioneer had a net loss in the fourth quarter of 2001, reporting it lost $20.9 million, or $0.21 per diluted share. The loss included a $7.7 million charge associated with the economic instability and resulting devaluation of the Argentine peso, where it has some production, a $6 million bad debt charge related to derivative contracts with Enron North America Corp., and a $1 million loss on the sale of assets, primarily in Canada.

Pioneer also recognized an extraordinary loss of $5.1 million on the early “extinguishment” of $38.7 million of its 9-5/8% senior notes. Adjusted for the special items, Pioneer reported a loss of $1.1 million, or $0.01 per diluted share, compared to First Call/Thomson Financial analysts’ consensus estimate of a loss of $0.03 per share. For the same period in 2000, Pioneer reported net income of $84.2 million, or $0.85 per diluted share. Cash flow from operations for the fourth quarter of 2001 was $85.6 million compared to $145 million for the fourth quarter of 2000.

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