The Permian Basin’s Spraberry field was discovered in 1949 and encompasses eight counties in West Texas. Oil produced in the Spraberry is West Texas Intermediate Sweet, and the gas produced is casinghead gas with an average energy content of 1,400 BTU. The field is approximately 150 miles long and 75 miles wide at its widest point.
Oil and gas resources are produced from multiple formations – including the upper and lower Spraberry, the Jo Mill, the Dean, the Wolfcamp, the Atoka, the Strawn and the Mississippian – at depths ranging from 6,000 feet to 11,000 feet. Based on extensive geologic data and successful drilling results to date, Pioneer estimates the Spraberry field contains more than 50 billion barrels of oil equivalent, making it the largest U.S. oil field and second largest oil field in the world.
During 2012, Pioneer drilled 691 wells in the Spraberry field and currently operates more than 7,000 wells in the field. Pioneer’s total acreage position now approximates 900,000 gross acres (640,000 net acres). The successful horizontal Wolfcamp Shale and Jo Mill wells drilled in 2012 have led the Company to shift a significant portion of its 2013 drilling activity from vertical drilling to more capital-efficient horizontal drilling.
Pioneer estimates it has more than 8 billion barrels oil equivalent of net resource potential from vertical and horizontal drilling and more than 35,000 drilling locations. As of August 2013, the Company had 27 rigs operating in the Spraberry field, of which 15 were drilling vertical wells and 12 were drilling horizontal Spraberry and Wolfcamp Shale interval wells. Pioneer expects to drill approximately 300 vertical wells and 120 horizontal wells in 2013.
Pioneer estimates that it has more than 3 billion barrels of oil equivalent net recoverable resource potential from six stacked intervals across its 600,000 gross acres in the northern Spraberry/Wolfcamp acreage. The majority of this acreage is held by production. The highly prospective stacked intervals are the middle Spraberry Shale, Jo Mill, lower Spraberry Shale, Wolfcamp A, Wolfcamp B and Wolfcamp D formations. Additional zones, such as the Clearfork, Wolfcamp C, Atoka, Barnett and Woodford, may also be tested horizontally in the coming years.
Pioneer plans to drill 30 to 40 wells throughout the six stacked intervals of the northern acreage in 2013. As of August 2013, the Company was operating five horizontal rigs and plans to increase activity to eight rigs in 2014.
In May 2013, Pioneer closed a joint venture transaction with Sinochem Petroleum USA, a subsidiary of the diversified global conglomerate Sinochem Group, to sell 40% of its interest in 207,000 net acres of the horizontal Wolfcamp Shale play in the southern portion of the Spraberry field. Pioneer continues as operator and retains its current working interests in all formations shallower than the Wolfcamp horizon. The $1.7 billion transaction allows Pioneer to accelerate development in its southern acreage position and add significant production and reserves while enhancing shareholder value.
Through the end of the second quarter of 2013, 81 horizontal Wolfcamp wells were drilled in the joint venture area, of which 65 wells were put on production. Gross production from the joint venture area in mid-2013 was approximately 10,000 barrels oil equivalent per day.
Pioneer’s Spraberry vertical wells produce 70% oil and account for approximately 40% of Pioneer’s total production and approximately 55% of its total proved reserves. With a multi-year drilling inventory of more than 24,000 locations, this asset provides substantial opportunity to deliver predictable production growth for years to come. Pioneer’s 2013 drilling program reflects 90% of the wells being deepened below the Wolfcamp interval.
Pioneer Natural Resources is a large independent exploration and production company that delivers competitive and sustainable results.
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