Texas Oil and Gas Attorney Blog
Pioneer Natural Resources Co. (PNR) has 155,000 gross acres in the Barnett Shale play- two thirds in the liquids-rich area and one third in the dry gas area. PNR has operated this area since 2007.
Pioneer, a company out of Dallas, started divesting procedures for these shale play properties in September 2012. The chairman and chief executive officer of Pioneer, Scott Sheffield, said when the divestment was announced last year, “The sale of our Barnett shale properties will allow us to strategically reallocate capital to our higher-return, core assets in the Spraberry vertical play, the horizontal Wolfcamp shale play, and the Eagle Ford shale.” In December last year, Pioneer received several bids but none were sufficient to cover the value of the assets according to the company. Due to this lack of acceptable bids, Pioneer will keep operating the Barnett assets.
The Barnett properties were reclassified to discontinued operations in the third quarter. Now that the divestment process has been halted, the properties will be again reclassified to continuing operations for the fourth quarter of 2012. In the fourth quarter of 2012 this area produced about nine thousand barrels of oil equivalent per day. Pioneer has one rig currently in the liquids-rich Combo area and plans to continue to focus on drilling in this area. In the fourth quarter, the company drilled eight new wells in this area and put eight wells on production.
Future plans for Pioneer’s Barnett properties were discussed and followed up on in February 2013 and going forward. The company also discussed the fourth quarter and 2012 financial results and presented the 2013 Budget. On February 14, 2013, Pioneer had a meeting on future plans, dealing with many of the issues above (you can find more information and documents from this meeting here).
PNR’s budget for 2013 for the Barnett shale assets is $185 million. Pioneer noted that during the fourth quarter, the company altogether produced 165 thousand barrels of oil equivalent per day, including from the Barnett shale play. 156 thousand barrels of oil equivalent per day was from continuing operations, which was an increase of 29% over the 2011 numbers. Pioneer is now predicting a 12% to 16% growth in production from 2012 to 2013, and they are targeting a 13% to 18% annual production growth rate from 2013 to 2015. Mr. Sheffield said, “Pioneer had another great year in 2012. We delivered strong production and reserve growth, while continuing to be among the top performers in our peer group in total shareholder return.”
Since Pioneer has been unable to sell these Barnett Shale assets, hopefully they will reinvest and continue to grow its operations in this area. Now is a great time for the Texas energy industry, so whether it is Pioneer controlling these properties or another company, these activities will continue to contribute to the growth of the industry and the economy as a whole.
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