Permian Basin


Permian BasinDiscovering a resource potential of more than 75 billion barrels oil equivalent (BBOE) in the Spraberry/Wolfcamp shales has re-ignited industry activity in the Permian Basin. Production from the Midland Basin, located within the greater Permian Basin, has increased more than 650,000 barrels of oil equivalent per day (BOEPD) since 2009, and horizontal rigs now account for more than 65 percent of all drilling rigs in the area. These findings rank the Spraberry/Wolfcamp as the largest U.S. oil field and as the second-largest oil field in the world.

Pioneer’s production more than doubled from 45 thousand barrels of oil equivalent per day (MBOEPD) in 2011 to 112 MBOEPD in the first quarter of 2015. During that time, we successfully appraised six of the 12 prospective intervals within our extensive acreage position. Several of our wells hold records for highest initial production rates delivered from a specific interval. Even better, production data proves many have a resource potential of more than 1 million barrels of oil equivalent (MMBOE) each.

Pioneer continues to be the largest producer in the Spraberry/Wolfcamp with a resource potential of more than 11 BBOE and an inventory of more than 20,000 untapped horizontal drilling locations.


Current Horizontal Drilling Focus

Northern acreage:

  • Wolfcamp B (~80%)
  • Wolfcamp A (~10%)
  • Lower Spraberry Shale (~10%)

Southern acreage:

  • Wolfcamp B (>90%)
West Texas is Pioneer’s Foundation

It’s where we began operations in the early 1980s, where we’ve grown our largest leasehold and where we are now developing several game-changing shale formations.

Pioneer built its 785,000-acre position in the Permian Basin’s Spraberry oil field over decades through property acquisitions, mergers and exploratory efforts. Historically we focused on conventional vertical drilling and production. In 2011, our strategy shifted to unconventional operations that use advanced horizontal drilling and hydraulic fracturing technologies. We now target hydrocarbons in the field’s multiple, oil-rich Spraberry and Wolfcamp shale intervals.

After a successful, four-year transformation of our Spraberry/Wolfcamp acreage into a world-class horizontal play, in which we have successfully appraised six highly prospective stacked intervals, we shut down our vertical drilling program in early 2015. This has allowed us to concentrate efforts on more capital-efficient horizontal shale development.


Spraberry/Wolfcamp Shale Intervals

Oil and gas resources are produced from multiple formations, including the Spraberry, the Jo Mill, the Dean, the Wolfcamp, the Atoka, the Strawn and the Mississippian. Depths range from 6,700 to 11,300 feet.

Oil produced is West Texas Intermediate Sweet, and gas produced is casinghead gas that has a 1,400 BTU average energy content.

A Targeted Approach

Seeing strong production results and robust economic returns from the early horizontal wells we drilled in 2011 and 2012 revolutionized our operations. These wells targeted the Wolfcamp B interval within the southern portion of our leasehold, and the production rates were beyond encouraging. In 2013, we entered into a joint venture with Sinochem, a Chinese conglomerate, to accelerate horizontal development of the southern area, which is known as Pioneer’s Southern Wolfcamp asset or the Southern Wolfcamp joint venture area.

The process of transforming the rest of our leasehold – referred to as Pioneer’s Northern Spraberry/Wolfcamp asset – from a vertical drilling program to a more capital-efficient horizontal drilling program soon followed. Our key focus for 2013 was to appraise several Wolfcamp intervals, including the Wolfcamp A, Wolfcamp B and Wolfcamp D. Highly successful results, coupled with increasing activity in our southern asset, resulted in a 20 percent production growth year-over-year from 2012 to 2014 and a substantial increase in our resource potential.

By April 2014, we were operating 16 rigs in our northern asset alone. Our production from Spraberry/Wolfcamp intervals grew another 34 percent throughout the year, and we gained a greater understanding of the value of the shale intervals. The Lower Spraberry Shale interval is estimated to have the most oil in place of all the Midland Basin intervals. Our ongoing appraisal of the Middle Spraberry and Jo Mill intervals has confirmed their potential for future development as well.


Streamlining Our Operations

Our business, engineering, drilling, completions and production teams are continuously working to improve and optimize our Spraberry/Wolfcamp operations. Pioneer’s ongoing initiatives to reduce costs, increase production, gain efficiencies and protect the environment include:

  • Focusing each rig on one interval – Drilling one shale interval per rig allows us to focus on how to reduce drilling and completion time and costs more quickly.
  • Increasing multi-well pad drilling – Pioneer’s surface footprint is reduced when we drill multiple wells per pad.
  • Expanding use of casing design modifications – Improved casing designs provide an opportunity for cost reductions through decreased drilling time and reduction of downhole materials and are expected to save $500,000 to $1 million per well.
  • Optimizing completions – We are working to improve the productivity and cost structure of our horizontal well completions by testing a variety of factors of our horizontal well completion program, such as stage length, clusters per stage, fluid volumes and chemistry, and proppent concentration. In many cases, we have been able to leverage knowledge gained from similar testing in our Eagle Ford Shale operations.
  • Testing dissolvable plug technologies – Technologies reduce or eliminate coil tubing drill outs after fracture stimulation and are expected to save $300,000 per well.
  • Securing long-term supplies of lower-cost, non-potable water – Reducing fresh water usage remains a top priority among Pioneer’s water management initiatives. We are evaluating the use of water from brackish reservoirs not suited for drinking or agriculture, actively pursuing partnerships with local cities and municipalities to source wastewater, and evaluating recycling technologies.
  • Soliciting cost reductions from suppliers and service companies during the lower oil price environment – We are evaluating all of our operating costs (such as materials, contract drilling, fuel, labor, rental equipment and well services) and are working with our suppliers and service companies to reduce our costs by year-end 2015.



More Resources

Detailed data on Pioneer’s Permian Basin operations – such as production forecasts and results, capital spending and current activity – can be found in the Investors section of this website.

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