Barnett Shale

Pioneer Natural Resources shares jump on strong outlook

Shares in Irving-based Pioneer Natural Resources rose 6 percent in active trading Thursday following the producer's announcement Wednesday of better-than-expected earnings. In a call with financial analysts Thursday morning, company executives said Pioneer will accelerate its drilling schedule in the Midland Basin. Pioneer said it expects to produce 174,000 to 179,000 barrels of oil equivalent in the second quarter.

-- Jim Fuquay

Barnett Shale takes a bit out of Pioneer Natural Resources earnings

Irving-based Pioneer Natural Resources said it took non-cash impairments totaling nearly $160 million on proved and unproved properties in the Barnett Shale in the fourth quarter of 2012. The charges helped trim the  independent producer's net income to $29 million in the quarter. Pioneer said it made the write-downs, equal to $101 million after taxes, after it decided not to sell its holdings in the field and reduced their value on the books "to their estimated fair value." Pioneer put its Barnett acreage up for sale in September but on Jan. 31 said it dropped those plans when it could not draw an acceptable offer. It entered the field in 2007.

Pioneer said it has 82,000 net acres in the the northwestern portion of the Barnett, the field's so-called "combo play" of natural gas and oil. It said it averaged daily production of 9,000 barrels of oil equivalent -- about 60 percent oil and natural gas liquids and 40 percent gas -- in the Barnett in the fourth quarter, up from 7,000 a day in the third quarter. It expects production in 2013 to be between 9,000 and 12,000 barrels of oil equivalent. It is operating one rig and drilled eight wells in the fourth quarter. It plans to run two rigs in the second quarter of 2013 to hold what it has identified as its best acreage.

Pioneer also said it set a 2013 capital budget of $3 billion, including $2.75 billion for drilling. It plans to spend $185 million in the Barnett Shale. About $400 million of its budget will be met with the anticipated proceeds of the sale of up to 9.2 million shares, it said Wednesday.

-- Jim Fuquay 

Pioneer drops plans to sell Barnett acreage, strikes Wolfcamp deal

Irving-based Pioneer Natural Resources, which has about 155,000 gross acres in the Barnett Shale, much of it in the field's wetter reaches, said Wednesday it dropped its planned sale of the properties after it couldn't draw an acceptable bid. It had announced plans to sell the stake in September. It will instead retain and operate the properties, which in the fourth quarter produced about 9,000 barrels of oil equivalent, 55 percent liquids and 45 percent natural gas. It is running one rig in the area and will continue drilling activities.

In another announcement, Pioneer said it agreed to sell to China's Sinochem Petroleum a 40 percent stake in 207,000 Wolfcamp Shale acres in West Texas for $1.7 billion, including $500 million in cash at closing and $1.2 billion in future development costs over six years. Sinochem gets about 82,800 net acres in the Wolfcamp and deeper formations, while Pioneer retains shallower prospects. The companies plan to drill 86 horizontal Wolfcamp Shale wells this year, 120 wells in 2014 and 165 wells in 2015. The deal should close in the second quarter.

-- Jim Fuquay

Pioneer Natural Resources to sell Barnett holdings

Irving-based Pioneer Natural Resources, which in recent years moved heavily into the liquids-rich portions of the Barnett Shale, said Thursday it is looking to sell its properties in the North Texas field. It says it has about 155,000 gross acres, "of which approximately two-thirds are located in the liquids-rich Barnett Shale Combo play" that is in the field's northwestern reaches. "The Company has grown production to approximately 7,000 barrels oil equivalent per day, of which approximately 55% is liquids (oil and natural gas liquids) and 45% is dry gas," it says. CEO Scott Sheffield, in a prepared statement, said: “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. We plan to utilize the net proceeds from the divestiture to reduce indebtedness under Pioneer's credit facility.”

Pioneer said it expects to open a data room -- a location at which interested parties can inspect records and information -- in October. It hopes to complete a sale during 2013's first quarter. RBC Richardson Barrhas been engaged to market the properties.

-- Jim Fuquay

 

The Barnett Shale's oil play

Even as drilling activity has plummeted in the Barnett Shale from 2008's highs, rigs continue to work in the oil window of the big North Texas field. EOG Resources started it, but more companies are looking for oil and valuable condensate in an area that made its name in natural gas. The Star-Telegram takes a look at the play in Montague, Wise and other counties in the northwest reaches of the field. The story is here.

-- Jim Fuquay