Spraberry-Wolfcamp results boost PNR’s 2016 output growth target

Pioneer Natural Resources Co. says it expects 2016 production growth of more than 12% compared with the company’s previous target of 10%, reflecting improving Spraberry-Wolfcamp well productivity. Second-quarter production is forecast to average 224,000-229,000 boe/d.

PNR currently is operating 12 horizontal rigs in the northern Spraberry-Wolfcamp and plans to maintain that level based on favorable well returns in the area. The firm’s two horizontal rigs working in the southern Wolfcamp joint venture area are expected to be terminated by the end of June.

PNR expects to add 5-10 horizontal drilling rigs when the price of oil recovers to $50/bbl and “the outlook for oil supply-demand fundamentals is positive.”

PNR during the quarter produced 222,000 boe/d, up 3% on a quarterly basis and above the firm’s first-quarter production guidance range of 211,000-216,000 boe/d. Companywide oil output, which was 55% of overall production, grew 9% compared with the fourth-quarter level.

The firm attributes the production rise to its Spraberry-Wolfcamp horizontal drilling program. Pioneer’s Spraberry-Wolfcamp gross production surpassed 200,000 boe/d for the first time in the company’s history and total daily production for the Spraberry-Wolfcamp field has now surpassed 1 million boe.

PNR reported a first-quarter net loss of $267 million compared with a fourth-quarter 2015 net loss of $623 million and first-quarter 2015 net loss of $78 million. Adjusted results for the first quarter were a net loss of $104 million after tax, compared with $27 million in fourth-quarter 2015 and $5 million in first-quarter 2015.

The company’s capital budget for 2016 remains $2 billion.