The bet made by Pioneer Natural Resources Co. to focus on U.S. exploration appears to paid off — proved reserves grew by 128 MMboe last year, and the producer replaced 357% of production primarily in its core onshore areas and through several key U.S. acquisitions.

Pioneer CEO Scott Sheffield said that since the company implemented its asset restructuring program two years ago, “we have delivered 16% compound annual growth in production per share, added substantial reserves and resource potential and significantly reduced our finding and development cost.” Through 2011, he said, Pioneer is forecasting more than 12% compound average annual production per share and 20% average annual growth in cash flow.

According to the Dallas-based independent, the reserve additions last year mostly came from its U.S. core onshore areas in the Spraberry field, Raton Basin and Edwards Trend and overseas in Tunisia, as well as recent acquisitions in he Spraberry, Raton and Barnett Shale locations.

Last November Pioneer completed the sale of its Canadian subsidiary to Abu Dhabi National Energy Co. for $540 million (see Daily GPI, Nov. 28, 2007). In the past few months Pioneer completed the purchase of 30,000 net acres in the Raton Basin of southwestern Colorado for $205 million from Petrogulf Corp. (see Daily GPI, July 31, 2007). It also acquired 74,000 gross acres in the Barnett Shale and 44,000 gross acres in the Spraberry field in West Texas (see Daily GPI, Nov. 7, 2007).

According to year-end estimates, about 97% of Pioneer’s proved reserves are in the United States; 62% of reserves are proved developed. Pioneer is 51% weighted to natural gas, with a reserves-to-production ratio of about 23 years. Drillbit finding and development (F&D) costs averaged $17.85/boe last year. Excluding the costs associated with the drilling of proved undeveloped reserves in the Spraberry and Raton Basin fields, drillbit finding and development costs were about $12/boe.

The F&D costs, said Sheffield, were “essentially at the midpoint of our target range…despite the upward pressure on drilling and development costs throughout the year.”

Pioneer’s 4Q2007 profit jumped on the sale of assets and sales improvements. The producer earned $204.7 million ($1.72/share) in the quarter, compared with $27.7 million (22 cents) in 4Q2006. Excluding the gains that included the sale of its Canadian operations, Pioneer earned $84.4 million (71 cents/share), up from $26 million (21 cents) a year earlier.

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