Pioneer Natural Resources Co. updated its Alaska drilling program and announced that the company has expanded its existing position in the National Petroleum Reserve - Alaska (NPR-A) on the North Slope. Pioneer will participate in an NPR-A exploration program in 1Q 2005 with co-owners ConocoPhillips and Anadarko Petroleum Corp.
Pioneer has signed an exploration agreement with ConocoPhillips and Anadarko acquiring a 20% interest in 452,000 additional acres and gaining the rights to extensive seismic and geologic data in the NPR-A Northeast Planning Area. Earlier in 2004, through an exploration agreement with the same companies, Pioneer acquired a 20% interest in 167,000 acres in this planning area and in the adjacent federal offshore waters. Pioneer also participated in the Northwest Planning Area lease sale and acquired working interests ranging from 20% to 30% in approximately 808,000 acres.
"This new joint venture agreement positions us to participate in near-term, high-impact exploration opportunities on trend with existing discoveries. The new acreage complements our existing NPR-A acreage as it is much closer to infrastructure and could provide a bridge to our large holdings in the northwest," Scott Sheffield, Pioneer's chairman and CEO, said. "When all of the related assignments have been approved, Pioneer will have amassed an Alaskan undeveloped acreage portfolio in excess of 1.6 million gross acres and will hold the third largest net position in the state."
Since Pioneer entered Alaska with the successful drilling of three discovery wells within its Oooguruk Unit in 1Q 2003, Pioneer has assembled an extensive and balanced portfolio of North Slope opportunities:
Oooguruk Unit Development (70% working interest and operator)
This unit currently consists of 53,000 acres in the shallow waters of the Beaufort Sea. In 4Q 2004, Pioneer completed an extensive technical and economic evaluation of the resource potential within this unit. As a result of this evaluation, Pioneer has committed $5 million in 2005 for front-end engineering and permitting activities to further define the scope of the project. If the additional work confirms favorable development economics, Pioneer will seek to obtain regulatory approval to develop the field in 2006 targeting first oil in 2008.
Gwydyr Bay Development (100% working interest and operator)
Pioneer holds a block encompassing 6,000 acres near the giant Prudhoe Bay Unit. The company plans to drill two wells in the 2005/2006 winter drilling season to commercialize several small oil discoveries and tie them back to Prudhoe Bay infrastructure in 2006.
Tuvaaq Exploration Prospect (40% working interest)
Pioneer will participate in an exploration well in 1Q 2005 on this 14,000-acre block northeast of the Oooguruk Unit.
Storms Lead Area (50% working interest and operator)
Pioneer holds a 130,000-acre position adjacent to the giant Prudhoe Bay and Kuparuk Units and has a new 3D seismic survey underway for completion in 1Q 2005. Exploration drilling could start as early as 1Q 2006.
NPR-A (20% to 30% working interest)
With interest in 1.4 million acres across the most prospective portions of this lightly explored area, Pioneer expects to participate in a multi-year exploration program and anticipates that two exploration wells will be drilled in 1Q 2005.
Pioneer's Executive Vice President of Worldwide Exploration, Chris Cheatwood, said, "We are pleased to expand our exploration agreement with ConocoPhillips and Anadarko across a large portion of NPR-A. Pioneer has assembled a substantial portfolio on the North Slope of Alaska with good balance between development and exploration and with opportunities that will spur drilling activity for the next five to 10 years. We plan to invest more than $50 million on our Alaska portfolio in 2005 with a vision of growing these assets into a new core division for Pioneer."