Pioneer using 3.0 completions for 2018, upping rigs in 2019

By Luke Geiver | August 14, 2018

Pioneer Natural Resources posted a strong second quarter as it continues its move to become a Permian pure-play operator after selling assets in the Eagle Ford. The largest acreage holder in the Midland Basin portion of the greater Permian, Pioneer holds more than 700,000 acres that offer horizontal drilling locations with lateral length possibilities in the 7,500-foot to 14,000-foot range. “Once the divestitures of the non-Permian assets are complete, the company will report stronger cash operating margins and corporate returns due to an increase in revenue per barrel oil equivalent and a decrease in operating costs per BOE,” according to Timothy Dove, president and CEO of the Dallas-based E&P.

In Q2, Pioneer generated $243 million after tax by producing 280,00 boepd and placing 67 horizontal wells on production. Because the company was able to secure transportation deals with its Permian crude to the Texas Gulf Coast, the company mainly receives Brent pricing for oil.

For the full-year, the company will continue to operate 20 rigs before adding at least another four, next year. Roughly 275 wells will be completed and placed on production this year, according to the company, and the wells that are being drilled now provide high rates of return.

Up to 60 wells fracked in the second half of 2018 will use Pioneer’s version 3.0 fracking strategy. The version 3.0 includes larger proppant concentrations in the 2,000-pound per foot range, larger fluid concentrations up to 50 barrels per foot, tighter cluster spacing down to 15 feet and shorter stage spacing down to 100 feet.

This year, Pioneer has placed more than 65 wells on production that have used the version 3.0 approach. “Results from the 65 version 3.0 wells completed in 2017 and the first half of 2018 are outperforming production from nearby offset wells with less intense completions,” the company said. “Based on the success of the higher intensity completions to date, the company is adding approximately 60 version 3.0 completions in the second half of 2018.”