Pioneer Reports Year-End Reserves and Finding Costs.DALLAS -- Pioneer Natural Resources Company (NYSE NYSE See: New York Stock Exchange :PXD PXD Powder X-ray Diffraction PXD Post Exercise Discussion PXD Physical Device Driver PXD Pixel Data ) today announced that as of December 31, 2005, its total proved oil and gas reserves were 987 million barrels oil equivalent, or 5.9 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. cubic feet (Tcf) natural gas equivalent, including 429 million barrels of crude oil and natural gas liquids and 3.3 Tcf of natural gas. Proved developed reserves account for approximately 62% of total proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. . The estimated present value of Pioneer's proved reserves, utilizing a 10% discount rate, was $10.3 billion. The year-end NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). equivalent prices utilized to determine proved reserves were $61.04 per barrel of oil and $10.08 per thousand cubic feet of gas. Costs incurred during 2005 totaled $1.3 billion, including $991 million for development and exploration activities, $270 million for acquisitions and $19 million for asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. . Of Pioneer's 2005 development and exploration cost incurred, 63% was invested in development costs, 25% was invested in exploration and extension drilling, and 12% was invested in non-drilling related categories including seismic and other geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. and geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. activities. Costs incurred on acquisitions included $170 million for proved reserves and $99 million for unproved properties. The majority of the unproved property expenditures were focused on adding significant new acreage in onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. U.S. resource plays. Pioneer added 80 million barrels oil equivalent (MMBOE MMBOE Million Barrels of Oil Equivalent (energy and petroleum industry) ) of proved reserves during 2005, replacing 118% of production at a finding and development cost of $15.98 per barrel oil equivalent (BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip ). Pioneer acquired 80 MMBOE of proved reserves, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. in the Spraberry field in West Texas, and added 47 MMBOE of proved reserves from discoveries and field extensions. Proved reserves added from discoveries and field extensions are primarily attributable to 2005 drilling in the Raton field in the U.S., the Horseshoe Canyon Horseshoe Canyon can refer to:
During 2005, Pioneer also produced 68 MMBOE, sold 48 MMBOE and had downward revisions to prior reserve estimates of 47 MMBOE. Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. proved reserves were revised downward by 21 MMBOE primarily reflecting the results of wells drilled to develop the Company's deep gas reserves in the Neuquen Basin which indicated that the gas reservoirs gas reservoir In geology, a naturally occurring storage area, characteristically a folded rock formation, that traps and holds natural gas. The reservoir rock must be permeable and porous to contain the gas, and it has to be capped by impervious rock in order to form an are more complex and compartmentalized com·part·men·tal·ize tr.v. com·part·men·tal·ized, com·part·men·tal·iz·ing, com·part·men·tal·iz·es To separate into distinct parts, categories, or compartments: "You learn . . . than expected. U.S. revisions were primarily in the Raton field where additional production decline history on producing wells and unexpected drilling results in certain areas of the field led to downward revisions of 23 MMBOE to proved reserves. A number of wells drilled on the northern rim of the field during the second half of 2005 encountered less coal bed methane methane (mĕth`ān), CH4, colorless, odorless, gaseous saturated hydrocarbon; the simplest alkane. It is less dense than air, melts at −184°C;, and boils at −161.4°C;. reservoir than expected due to non-productive volcanic intrusions into the coal interval. On January 17th, Pioneer announced that it had entered into a purchase and sale agreement for the sale of its operations in Argentina. Excluding Argentine operations, Pioneer added 93 MMBOE of proved reserves with costs incurred of $1.15 billion during 2005, replacing 167% of production at a finding and development cost of $12.32 per BOE. Netherland, Sewell and Associates, Inc. (NSA NSA abbr. National Security Agency Noun 1. NSA - the United States cryptologic organization that coordinates and directs highly specialized activities to protect United States information systems and to produce foreign ), a top oil and gas reserve engineering firm, audited the proved reserves of significant fields. Excluding the Argentina and Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east fields targeted for divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). , NSA audited approximately 92% of the present value and approximately 93% of the quantity of Pioneer's proved reserves at year-end 2005. NSA also audited the year-end proved reserves of Pioneer's significant fields for 2003 and 2004. Year-end proved reserves and costs incurred are detailed in the attached supplemental schedule. For the three years ending in 2005, Pioneer's finding and development cost averaged $10.62 per BOE. Over the three-year period, Pioneer added 492 MMBOE for total costs incurred of $5.2 billion. Three-year average reserve replacement was 255%. For the five years ending in 2005, Pioneer's finding and development cost averaged $9.55 per BOE. Over the five-year period, Pioneer added 685 MMBOE for total costs incurred of $6.5 billion. Five-year average reserve replacement was 248%. Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada and Africa. For more information, visit Pioneer's website at www.pxd.com. Except for historical information contained herein, the statements in this News Release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, Pioneer's ability to implement its business plans (including the targeted divestiture of its Argentine and Deepwater Gulf of Mexico operations), uncertainties about estimates of reserves and quality of technical data. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTAL INFORMATION
Year Ended December 31, 2005
United
States Argentina Canada Africa Total
---------- --------- --------- --------- -----------
Proved reserves:
Oil (MBbls):
Balance,
January 1,
2005 215,062 24,874 1,026 8,271 249,233
Revisions of
previous
estimates (821) 3,106 2,877 184 5,346
Purchases of
minerals-in-
place 49,741 -- -- -- 49,741
Discoveries
and
extensions 196 1,979 505 2,043 4,723
Production (9,936) (2,872) (87) (3,674) (16,569)
Sales of
minerals-in-
place (21,729) -- (2,270) -- (23,999)
---------- --------- --------- --------- -----------
Balance,
December 31,
2005 232,513 27,087 2,051 6,824 268,475
Natural Gas
Liquids (MBbls):
Balance,
January 1,
2005 148,195 8,294 3,069 -- 159,558
Revisions of
previous
estimates (4,650) (1,046) (2,443) -- (8,139)
Purchases of
minerals-in-
place 16,059 -- -- -- 16,059
Discoveries
and
extensions 29 355 147 -- 531
Production (6,375) (666) (224) -- (7,265)
Sales of
minerals-in-
place -- -- (177) -- (177)
---------- --------- --------- --------- -----------
Balance,
December 31,
2005 153,258 6,937 372 -- 160,567
Natural Gas
(MMcf):
Balance,
January 1,
2005 3,000,335 560,374 119,869 -- 3,680,578
Revisions of
previous
estimates (141,473) (137,640) 15,887 -- (263,226)
Purchases of
minerals-in-
place 83,179 -- 292 -- 83,471
Discoveries
and
extensions 103,616 31,606 55,130 60,395 250,747
Production (197,391) (50,017) (15,665) -- (263,073)
Sales of
minerals-in-
place (97,410) -- (44,999) -- (142,409)
---------- --------- --------- --------- -----------
Balance,
December 31,
2005 2,750,856 404,323 130,514 60,395 3,346,088
Equivalent
Barrels (MBOE):
Balance,
January 1,
2005 863,313 126,564 24,073 8,271 1,022,221
Revisions of
previous
estimates (29,049) (20,881) 3,082 184 (46,664)
Purchases of
minerals-in-
place 79,663 -- 49 -- 79,712
Discoveries
and
extensions 17,494 7,602 9,840 12,109 47,045
Production
(a) (49,210) (11,874) (2,922) (3,674) (67,680)
Sales of
minerals-in-
place (37,964) -- (9,947) -- (47,911)
---------- --------- --------- --------- -----------
Balance,
December 31,
2005 844,247 101,411 24,175 16,890 986,723
========== ========= ========= ========= ===========
Costs incurred for oil and gas
producing activities ($000):
Property
acquisition
costs:
Proved $167,814 $-- $2,593 $-- $170,407
Unproved 60,561 512 7,344 30,923 99,340
---------- --------- --------- --------- -----------
228,375 512 9,937 30,923 269,747
Exploration
costs 217,723 36,878 43,437 63,605 361,643
Development
costs 448,383 85,786 77,962 16,777 628,908
---------- --------- --------- --------- -----------
894,481 123,176 131,336 111,305 1,260,298
Asset retirement
obligations 8,909 6,464 (98) 3,963 19,238
---------- --------- --------- --------- -----------
Total costs
incurred $903,390 $129,640 $131,238 $115,268 $1,279,536
========== ========= ========= ========= ===========
Reserve
replacement
percentage (b) 138% NM 444% 335% 118%
========== ========= ========= ========= ===========
Finding and
development costs
per BOE of
proved reserves
added (c) $13.26 $-- $10.12 $9.38 $15.98
========== ========= ========= ========= ===========
(a) Production includes 1,188 MBOE related to discontinued operations
and 2,409 MBOE related to field fuel.
(b) The summation of annual proved reserves, on a BOE basis,
attributable to revisions of previous estimates, purchases of
minerals-in-place and discoveries and extensions divided by annual
production of oil, NGLs and natural gas, on a BOE basis.
(c) Total costs incurred divided by the summation of annual proved
reserves, on a BOE basis, attributable to revisions of previous
estimates, purchases of minerals-in-place and discoveries and
extensions. Consistent with industry practice, future capital
costs to develop proved undeveloped reserves are not included in
costs incurred.
NM = Not meaningful.
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