PIONEER NATURAL RESOURCES COMPANY
NYSE : PXD

PIONEER NATURAL RESOURCES COMPANY

February 06, 2006 09:00 ET

Pioneer Begins Development of Oooguruk Field

DALLAS--(CCNMatthews - Feb 6, 2006) -

Pioneer Natural Resources Company (NYSE:PXD) today announced that it has approved and is commencing the development of the 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 miles 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.

Pioneer holds a 70% working interest in the Oooguruk field. Eni Petroleum has a 30% working interest and is expected to make its participation election for the project during the first quarter of 2006. Pursuant to the farmout agreement concluded in January 2004, ConocoPhillips retains the right to elect to participate in the project.

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 million to 90 million barrels 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 on production as drilling progresses, with peak rates of approximately 15,000 to 20,000 barrels of oil per day 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 U.S. base. 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," stated Scott D. Sheffield, Chairman and CEO.

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 a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, Canada and Africa. For more information, visit Pioneer's website at www.pioneernrc.com.

Except for historical information contained herein, the statements in this News Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties which may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, government regulation or action, third party approvals, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to implement its business plans or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, and environmental and weather risks. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.

The U.S. Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Pioneer uses certain terms in this release, such as "estimated gross oil resources" or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines prohibit Pioneer from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Pioneer.

Contact Information

  • Pioneer Natural Resources Company, Dallas
    Investors:
    Frank Hopkins/Chris Paulsen, 972-444-9001
    or
    Media and Public Affairs:
    Susan Spratlen, 972-444-9001