Post on 30-Oct-2014
description
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Operator Spotlight:
Pioneer Natural Resources
Exceptional Eagle Ford Shale
October 15, 2012
2
Forward-Looking Statements
Except for historical information contained herein, the statements, charts and graphs in this
presentation are forward-looking statements that are made pursuant to the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the
business prospects of Pioneer are subject to a number of risks and uncertainties that may cause
Pioneer's actual results in future periods to differ materially from the forward-looking statements.
These risks and uncertainties include, among other things, volatility of commodity prices, product
supply and demand, competition, the ability to obtain environmental and other permits and the
timing thereof, other government regulation or action, the ability to obtain approvals from third
parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the
costs and results of drilling and operations, availability of equipment, services and personnel
required to complete the Company's operating activities, access to and availability of
transportation, processing and refining facilities, Pioneer's ability to replace reserves, implement
its business plans or complete its development activities as scheduled, access to and cost of capital,
the financial strength of counterparties to Pioneer's credit facility and derivative contracts and the
purchasers of Pioneer's oil, NGL and gas production, uncertainties about estimates of reserves and
resource potential and the ability to add proved reserves in the future, the assumptions underlying
production forecasts, quality of technical data, environmental and weather risks, including the
possible impacts of climate change, the risks associated with the ownership and operation of an
industrial sand mining business, international operations and acts of war or terrorism. These and
other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities
and Exchange Commission. In addition, Pioneer may be subject to currently unforeseen risks that
may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these
statements except as required by law.
Please see the appendix slides included in this presentation for other important information.
PXD: Industry Leader in Eagle Ford Shale
Geologic Data
Drilling Efficiency
Completion Optimization
Operational Optimization
First Mover Midstream Build Out
Production Growth
3
4
PXD: First Mover in the Eagle Ford Shale
Band of dry gas below the Eagle Ford Shale extending 250 miles across SE Texas
Started infill drilling in 1991 in legacy Edwards field (Pawnee); horizontal drilling in 1999
Acquired ~300,000 acres along the trend in 2005
Drilled 150+ Edwards wells with full suite of logs; each well drilled through Eagle Ford Shale
Shot >2,000 sq. miles of 3-D seismic
Re-completed several vertical wells in late 2006; first completions targeting Eagle Ford Shale
Drilled several high-rate horizontal wells beginning late 2009
Cut over 1,500 feet of core
Eagle Ford
Shale
Edwards
Trend
PXD: Significant Progress Over the Past 3 Years
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Successful joint venture with Reliance Industries Limited
210 wells on production
12 rigs operating during 2012
11 Central Gathering Points (CGPs) and >600 miles of pipeline completed
Sophisticated geologic and reservoir models
PXD: Technology Leader in Eagle Ford Shale
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A
A’
3-D Seismic Coherency
Curvature
Core Analysis
Logging Pilot hole logs
Open hole horizontal logs
Production logging
Radio active tracers
Mud logging
Geologic &
Reservoir
Model
Microseismic Surface
Downhole
PXD: Technology Drives Strong Well Performance
7
N
Geologic and reservoir models identify: Resource in place Productivity by area Wellbore placement Completion optimization
PXD: Delivering Strong Well Results
50% of PXD wells are in the top quartile of industry
EURs across the entire Eagle Ford Shale1
80% of PXD wells are above the industry median EUR1
Well performance varies across the Eagle Ford Shale
due to geologic properties
– PXD has 14 type curves with EURs averaging
1 MMBOE (6 BCFE)
8 1)Based on public wellhead production data from IHS; does not include NGL uplift
$0
$150
$300
PXD: Drilling Results Improving
0
400
800
2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q29
Average drilling cost per foot has decreased 12% and average drilling feet per day has increased 27% over the last year
PXD: Well Spud to POP Time Decreasing1
159
145
116 105
96
0
50
100
150
200
Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012
Days
10
Spud to put-on-production (POP) time has decreased 40% over the last year
1) Reflects single well pads only
Pad Drilling Expected To Increase in 2013
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20%
80%
Single Well Multi-Well Pads
75%
25%
Single Well Multi-Well Pads
1H 2012 2013
PXD: Leading Fracture Stimulation Optimization
Implementing completion optimization study to improve frac design
– Varying frac size, pump rate and clusters per foot by area according to analysis of Pioneer and offset operator data
Utilizing zipper fracs on pad completions
– Saves $400 M - $500 M per well
Testing sliding sleeve technology
Continuing to test white sand proppant
– 53 wells stimulated using white sand through Q2
– Early well performance similar to direct offset ceramic-stimulated wells
– Saves ~$700 M per well
– 50% of 2012 program, expect further increase in 2013
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Spraberry
5 vertical frac fleets (~20,000 HP each)
2 horizontal frac fleets (~35,000 HP each)
15 drilling rigs
Well service equipment1
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PXD’s Vertical Integration Improves Returns and Enhances Execution
Eagle Ford Shale
2 frac fleets
(50,000 HP each)
2 coiled tubing units
Current frac capacity: ~300,000 HP
13th largest pressure pumping company in North America
1) Includes pulling units, frac tanks, hot oilers, water trucks, blowout preventers, construction equipment and fishing tools
Barnett Shale Combo
1 frac fleet
(30,000 HP)
1 coiled tubing unit
Brady sand mine
PXD: Production Operations Developments
Choke management reduces well production declines
and increases well EURs
Artificial lift Installations beginning in oilier areas
– Varying hydrocarbon yields across PXD’s acreage
require multiple artificial lift methods including rod
pump, gas lift and plunger lift
Capillary strings enable chemical paraffin inhibition
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1.0
10.0
100.01 8
15
22
29
36
43
50
57
64
71
78
85
92
99
106
113
120
127
134
141
148
155
162
169
176
183
190
197
204
211
218
225
232
239
246
253
260
267
274
281
288
295
302
309
Days
Cum BOE/Lateral FTE.Roeder 03Harlan MettingRiedesel
PXD: Example of Choke Management Effectiveness
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22/64” Choke
12/64” Choke
16/64” Choke
Cumulative production from wells operating under choke management crosses over cumulative production from wells operating at higher choke sizes within 6 months1
Choke management benefits:
− Higher well EURs
− Higher sustained wellhead pressure and extended stable flow regime
Cumulative Production Per Lateral Foot
Cum
ula
tive B
OE P
er
Late
ral
Foot
1) Wells are geologically similar
PXD: Midstream Build Out Almost Complete
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11 Central Gathering Points on line to date
− Gas and condensate gathering and separation
− Gas treatment and condensate stabilization
Build out executed ahead of drilling plan
Infrastructure build out minimizes production delays
Modular design allows for expansion ahead of drilling plans
Processing third-party volumes – EFS Midstream is open for business
Allows delivery of wet gas and condensate to multiple third-party processors
EFS Midstream LLC. Midstream Development
Midstream Build Out
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Key Capabilities
• Multiple gas redelivery points (Copano, Enterprise, DCP)
• 665 MMcfd of gas gathering, treating and dehydration capacity
• 79 Mbbld of condensate gathering and stabilizing capacity
2010 2011 2012 2013+ Total
CGPs 3 5 3 3 14
Pipelines (Miles) 70 210 181 106 567
11
Area 71 Central Gathering Point
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PXD: Secured Third-Party Takeaway and Processing Capacity
Contracted gas and NGL transportation, processing and fractionation for the
joint venture’s forecasted production volumes
– Utilizing multiple parties over 5-year to 10-year periods
• Enterprise (10-year), Copano (5-year), DCP Midstream (5-year)
• Diversifies gas processing and NGL fractionation capacity
• Greater market access
• Cost control
Contracted condensate transportation with Enterprise
– Pipeline commitment substantially reduces trucking
– Provides flexibility to move condensate to Cushing and Houston markets
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PXD: Delivering Substantial Production Growth
20
2010 2011 1H 2012
PXD Eagle Ford
Production (MBOEPD)
5
34
67
PXD Net
Gross
12
23
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Certain Reserve Information
Cautionary Note to U.S. Investors --The U.S. Securities and Exchange Commission (the
"SEC") prohibits oil and gas companies, in their filings with the SEC, from disclosing
estimates of oil or gas resources other than “reserves,” as that term is defined by the
SEC. In this presentation, Pioneer includes estimates of quantities of oil and gas using
certain terms, such as “resource,” “resource potential,” “EUR”, “oil in place” or other
descriptions of volumes of reserves, which terms include quantities of oil and gas that
may not meet the SEC’s definitions of proved, probable and possible reserves, and which
the SEC's guidelines strictly prohibit Pioneer from including in filings with the SEC. These
estimates are by their nature more speculative than estimates of proved reserves and
accordingly are subject to substantially greater risk of being recovered by Pioneer. U.S.
investors are urged to consider closely the disclosures in the Company’s periodic filings
with the SEC. Such filings are available from the Company at 5205 N. O'Connor Blvd.,
Suite 200, Irving, Texas 75039, Attention Investor Relations, and the Company’s website
at www.pxd.com. These filings also can be obtained from the SEC by calling 1-800-SEC-
0330.