Pioneer has been very active in the Spraberry/Wolfcamp play this year as was discussed in the Pioneer 2Q2010 conference call on Thursday. They are on pace to drill 440 wells by year end. Along will also ramp up the number of rigs in their drilling program. Currently, they operate 20 right now and will be up near 30 by YE2010.
As with most of the industry, Pioneer is having to deal with increasing service company demands, equipment maintenance and delays. To combat this Pioneer is operating their own frac fleets and purchasing their own rigs. At year end, the plan is to own 12 of the 30 operated rigs. They said each frac fleet is capable of fracing 40 wells per year. They said they want to use this model of owning and building frac fleets in their future Eagle Ford operations.
Another interesting topic inherent in Wolfberry activities is multiple completion zones. Wolfberry after all is a combination of Spraberry and Wolfcamp production. Pioneer is also adding the deep Strawn to the mix. Below is a graphic from the 2Q presentation. It shows the order of the multiple pay zones. The Strawn will be penetrated in 40% of their remaining 2010 wells. Due to the fact that this is a “margin play”, incremental reserves and constant cost maintenance are extremely important. Adding the Strawn for an additional 25 or so BOEPD of production becomes a great addition.
One point I found very interesting is that Pioneer will drill two test horizontal Wolfcamp wells later this year. The lateral length will be 4,000’. Some questions arise in my mind. Are the horizontal wells going to be drilled in previously developed vertical sections? Does the benefit of higher EUR offset the higher well costs? What is the drainage area and do horizontal legs optimize the natural spacing?
You can bet DI Energy Strategy Partners will be keeping an eye on these horizontal wells and comparing them against vertical offsets. Keep checking the Wolfberry Unconventional Update for current Wolfberry information and the Pioneer Quarterly Conference Call Summary.
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