Pioneer eyes Permian scale-up
US independent expects more multi-well pads to drive efficiencies
US independent Pioneer Natural Resources plans to build more multi-well developments in the booming Permian basin this year.
The company said about 40% of the its 2019 wells are planned for projects consisting of four or more wells, compared to 10% in 2018.
"Many of these projects will utilise 'Pioneer Pads' enabling 24 wells to be drilled and completed from the same pad," Pioneer said in a release.
"The Pioneer Pad can reduce surface utilization by greater than 80%, benefiting the environment and further improving returns."
The prolific Permian, long dominated by small independents, is evolving into a large-scale development stage in its lifecycle, where big projects by big public players dominate. Supermajors Shell, ExxonMobil and Chevron have all disclosed plans to scale up in the Permian, while larger independents such as Pioneer peer Concho Resources have talked up "benefits of scale" to drive efficiencies in the Permian.
In a release, Pioneer also touted the efficiencies bigger projects can bring.
"Large-scale developments enable operational efficiencies to be captured by performing drilling and completion practices over multiple wells," according to a release.
"Additionally, large-scale developments decrease mobilisation and non-productive time."
The company expects to spend between $2.8 billion and $3.1 billion on drilling, completions and facilities in the Permian in 2019. Last year, the company projected spending $2.63 billion in the Permian.
Pioneer anticipates operating an average of 21 to 23 horizontal rigs in the Permian this year, and expects to place 265 to 290 wells on production, compared to 270 wells in 2018.
Production is expected to grow up to 17% over 2018 levels, to a an average range of 320,000 to 335,000 barrels of oil equivalent per day, with 203,000 to 213,000 barrels of oil per day.
Pioneer reported fourth-quarter 2018 adjusted net income of $324 million, or $1.89 per share, compared to $665 million, or $3.87 per share, in the same period a year ago.