Pioneer developing Oooguruk field

Pioneer Natural Resources Co. announced that development work is underway on its Oooguruk field on the North Slope of Alaska.

Offshore staff

(Alaska) - Pioneer Natural Resources Co. announced that development work is underway on its Oooguruk field on the North Slope of Alaska. Pioneer is the operator of the field, which is in the shallow waters of the Beaufort Sea approximately eight mi northwest of the Kuparuk River Unit.

Pioneer will immediately begin operations to install an offshore gravel drilling and production site in order to complete gravel hauling activities during the 2006 winter construction season.

Following construction of the gravel drilling and production site this winter, a subsea flowline and facilities will be installed during 2007 to carry produced liquids to existing onshore processing facilities at the Kuparuk River Unit. Pioneer plans to drill approximately 40 horizontal wells to develop 50 MMbbl to 90 MMbbl of estimated gross oil resources.

Depending on weather conditions and facilities completion and accessibility, development drilling could begin as early as the fall of 2007. Total gross capital invested, including projected drilling and facility costs, is expected to range from $450 million to $525 million.

The wells are expected to be brought online as drilling progresses, with peak rates of approximately 15,000 to 20,000 b/d of oil expected by 2010. Using current oil prices, the field is expected to produce for at least 25 years before reaching its economic limit.

"The Oooguruk field development is the first of what I believe will be many successful projects for Pioneer in Alaska and adds a new long-lived asset to our strong US base," said Scott D. Sheffield, chairman and CEO of Pioneer.

"We have established positions in a number of other Alaskan opportunities, including projects to appraise and develop previously discovered resources near existing infrastructure as well as exploration projects in close proximity to existing infrastructure and in more remote areas. We look forward to continuing what has been a successful partnership with the other producers and the state and local governments in Alaska."

Ken Sheffield, president of Pioneer's Alaska subsidiary, added, "We appreciate the cooperative spirit demonstrated by the State of Alaska, the North Slope Borough and the federal regulatory agencies in working with Pioneer to produce a project plan that minimizes environmental impacts while also allowing us to maintain our project schedule. Our experience with this project has convinced us that Alaska is truly open for responsible development."

Pioneer is operator 70% interest holder in the Oooguruk field and Eni Petroleum owns a 30% working interest and is expected to make its participation election for the project during 1Q 2006. Pursuant to the farmout agreement concluded in January 2004, ConocoPhillips retains the right to elect to participate in the project.

02/09/06

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