Post on 14-Jan-2016
Permian Investor Presentation
October 2012
2
Forward-Looking StatementsExcept for historical information contained herein, the statements, charts and graphs in this presentation 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 that 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 commodity prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements (including joint venture agreements) with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services and personnel required to complete the Company's operating activities, access to and availability of transportation, processing and refining facilities, Pioneer's ability to replace reserves, implement its business plans (including its plan to complete certain asset divestments) or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to Pioneer's credit facility and derivative contracts and the purchasers of Pioneer's oil, NGL and gas production, uncertainties about estimates of reserves and resource potential and the ability to add proved reserves in the future, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, including the possible impacts of climate change, the risks associated with the ownership and operation of an industrial sand mining business, international operations and acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these statements except as required by law.
Please see the appendix slides included in this presentation for other important information.
Topics
PXD Overview Tim Dove
Spraberry Overview & Geology Chris
Cheatwood
Spraberry Operations Danny Kellum
Horizontal Wolfcamp Shale Chris
Cheatwood
3
4
PXD Overview
5
U.S. asset base
Oil exposure from proved reserves + estimated net resource potential of >7 BBOE
2012 drilling program focused in three liquids and resource rich core assets in Texas
– Spraberry Vertical– Horizontal Wolfcamp Shale
• Joint venture accelerates future development– Eagle Ford Shale
Barnett Shale divestiture allows reallocation of capital to three core Texas assets
Strong production growth profile
Vertical integration substantially improving returns
Attractive derivative positions protect margins
Strong investment grade financial position
Investment Highlights
2010 2011 Q1 Q2 2H E
6
2012 Production Growth Target1
MBOEPD
25% - 29%
120
~65% Liquids
147
1) Reflects Tunisia and South Africa as discontinued operations
39% Oil
34% Oil
2012 E
104
148 – 153 FY
Guidance
27% Oil
151
41% Oil
Increased 2012 production growth target from 23% - 27% to 25% - 29%
Strong drilling and well performance outweighs continuing third-party NGL fractionation capacity shortfalls and reduced 2H drilling activity
Production growth rate beyond 2012 dependent on commodity prices and service costs
150 - 155
1.00
2.00
3.00
4.00
5.00
6.00
60.00 70.00 80.00 90.00 100.00 110.00 120.00
1,949
2,175 Capital program includes:
–Drilling capital
2.4
–Vertical integration
0.5
• Includes $100 MM for field facilities
accelerated into 2012
2.9
Capital program funded from:
–Operating cash flow
1.8
–Equity offering proceeds
0.5
–Liquidated derivatives and
inventory reduction
0.3
–Credit facility borrowings
0.2
–South Africa divestiture and
South Texas acreage sale
0.1
2.9
NYMEX Oil Price ($/BBL)
NY
MEX
Gas P
rice (
$/M
CF)
$85/bbl oil and $3/mcf gas
Sensitivity to Commodity Prices ($ MM)
7
2012E Capital Spending and Cash Flow1
1) Capital spending excludes acquisitions, asset retirement obligations, capitalized interest and G&G G&A
$B
Horizontal Wolfcamp Shale80% Oil / 10% NGLs / 10% Gas
400,000+ Gross Acres3.5 BBOE Resource Potential
~8,000 Drilling Locations
Horizontal Wolfcamp Shale80% Oil / 10% NGLs / 10% Gas
400,000+ Gross Acres3.5 BBOE Resource Potential
~8,000 Drilling Locations
Pioneer’s Liquids-Rich Growth Areas
8
Spraberry Vertical70% Oil / 20% NGLs / 10% Gas
900,000 Gross Acres609 MMBOE Proved Reserves2.1 BBOE Resource Potential~23,000 Drilling Locations
64 MBOEPD Q2 Net Production
Spraberry Vertical70% Oil / 20% NGLs / 10% Gas
900,000 Gross Acres609 MMBOE Proved Reserves2.1 BBOE Resource Potential~23,000 Drilling Locations
64 MBOEPD Q2 Net Production
Eagle Ford Shale40% Oil / 20% NGLs / 40% Gas
300,000 Gross Acres70 MMBOE Proved Reserves
600 MMBOE Resource Potential~1,800 Drilling Locations
24 MBOEPD Q2 Net Production
9
12/31/11 Proved Reserves: 1.1 BBOE2
Additional Net Resource Potential: 6.7 BBOE
1)All drilling locations shown on a gross basis2)SEC pricing of $96.13/BBL for oil and $4.12/MMBTU for gas (NYMEX)3)Primarily reflects Alaska, Raton and South Texas4)Includes vertical well potential from Wolfcamp and deeper intervals5)Assumes average EUR of 575 MBOE per well, >8,000 locations, >400,000 acres , 140-
acre spacing, laterals in all intervals (A, B, C & D) and 75% NRI Permian 5.6 BBOE
Spraberry 609 MMBOE
4,700 PUD locations
Raton 170 MMBOE
150 PUD locations
Other 107 MMBOE
120 PUD locations
Mid-Continent 107 MMBOE
Spraberry40-ac Drilling4
600 MMBOE5,200 locations
Spraberry20-ac Drilling4
1.2 BBOE13,500 high-graded locations
Spraberry Waterflood 300 MMBOE 40% acreage
Eagle Ford Shale600 MMBOE
1,700 locations
Other3
200 MMBOE
500 locations
Barnett
300 MMBOE
1,300 locatio
nsEagleFord Shale70 MMBOE
120 PUD locations
Horizontal Wolfcamp5
3.5 BBOE8,000 locations
Proved Reserves + Estimated Net Resource Potential of >7 BBOE and 35,000 Drilling Locations Proved Reserves + Estimated Net Resource Potential of >7 BBOE and 35,000 Drilling Locations
9
Significant Proved Reserves and Resource Potential1
10
Spraberry Overview & Geology
Permian Basin Producing Fields
11Source: Geomap, 2006
Spraberry Trend Largest Field in Midland
Basin (~5,000 sq miles)
>14,000 producing wells
>1 billion barrels produced
>180,000 BOPD current production
Permian Basin is composed of multiple uplifts and basins that formed during the Pennsylvanian and early Permian
The Spraberry Trend, which includes the Wolfcamp interval, is located in the Midland Basin of the Permian Basin
It was discovered in 1948 and commenced production in 1949 It contains 40 BBO in-place in Spraberry-Dean interval
− Much more oil in-place in deeper zones of Wolfcamp, Strawn, Atoka and Mississippian
OZONAPLATFORM
12
Geologic Provinces of the Permian Basin
PEDERNAL UPLIFT &ROOSEVELT POSITIVE
DEVIL’SRIVERUPLIFT
Basin
BasementUplift
Shelf
Thrust Belt
CONFIDENTIAL
Spraberry Trend
13
Midland Basin Depositional Setting and Source Submarine fans of Dean and Spraberry were deposited during relative sea-level fall via
submarine canyons cut mainly in Northern Shelf
– Spilled into main depocentre to south forming distal fans
– Saddles between atoll mounds acted as conduits for clastics
Spraberry formation was a mud-rich fan complex
– High transport efficiencies allowed extensive network of muds, silts and very fine sands over 150 miles
Main productive interval in Spraberry Trend is the middle-upper Spraberry Formation
– Subordinate production Dean and Wolfcamp
– Sourced from Spraberry shales and basal shales
Handford, 1981Blakey, Early Leonardiian Representation
~6,0
00 ft
~10,
000
ft
Clea
r-fo
rk
Dean
Upp
er
Spra
berr
yW
olfc
amp
Low
erSp
rabe
rry
Atok
aor
Mis
s.
~11,
000
ft
Str
aw
n
Limestone PaySandstone PayNon-Organic Shale Non-PayOrganic Rich Shale Pay
Evolution of Spraberry Trend Area1983
429,000 acres
Present Day
>1,700,000 acres
and growing
14
PXD Acreage
Spraberry Field
Source: Bureau of Economic GeologySource: PXD
15
Spraberry Operations
Operations
16
Example of Spraberry Development, NW Martin County
Excellent operating environment
PXD has long history of development in the area
17
1950s – Early Development
1960s – Field extension
Progression of Field Development1
1) Source: IHS – Well location data prior to 1970 is limited
Major Oil Company development; principally Texaco, Phillips and Mobil
Continued development by Majors with a few minor Independents
1970s – Dramatic expansionContinued development by Majors with a few minor Independents
1980s – Expansion & Infill1990s – Infill and efficiency
2000s – Infill and efficiency
Independents including Parker & Parsley (Pioneer’s predecessor Company) become large players; less emphasis by Majors
Independents continue to dominant the landscape driven by Pioneer
Independents lead the charge going deeper; activity builds in the Horizontal Wolfcamp Shale in southern portion of the basin
Independents become the dominant player
2010s – Deeper and horizontals
18
History of Spraberry Trend Completions 2010
+2008 - 092000s1980 - 90s1950 - 70s
Limestone PaySandstone PayNon-Organic Shale Non-PayOrganic Rich Shale Pay
Average Casing Depth
Testi
ng
d
eep
er
zon
es
~6,0
00 ft
~10,
000
ft
Clea
r-fo
rk
Dean
Upp
er
Spra
berr
yW
olfc
amp
Low
erSp
rabe
rry
Atok
aor
Mis
s.
~11,
000
ft
Str
aw
n
Fracture Stimulation Stages
Drilling deeper, adding fracture stimulation stages and capturing pay from non-traditional shale/silt
intervals have added production and improved recoveries
Permian Basin Historical Oil Production
19Source: BENTEK, HPDI
Permian Rig Count Increased 5X Since 2009
Source: Baker Hughes 20
PXD – Largest Spraberry Acreage Holder, Driller and Producer
PXD Acreage (~900,000 Acres; ~75% HBP)
21
Spraberry Field
PXD leasehold represents ~50% of total
Spraberry acreage
~7,000 operated wells
Drilling locations:
−>23,000 vertical (central and northern parts of the
field)
−>8,000 horizontal Wolfcamp (based on 400,000
acres primarily in the southern portion of the field)
540 total wells drilled YTD
0
20
40
60
80
100
83
30 29 28
16 14 12 11 11 11
Spraberry Field Gross Production by Operator (MBOEPD1)
1) April 2012 IHS Data gross reported oil and wet gas
22
Field Operations & Logistics
Currently operate ~7,000 wells
– 1,600+ well batteries/facilities
– Substantial expansion of field offices
Growth and expansion
– Drilling ~650 vertical wells and ~35
horizontal wells in 2012
– Ongoing construction of new roads,
tank batteries and gathering lines
– Significant expansion of gas
processing facilities in 2013 - 2014
Manage growth and increased
workload
– Hiring additional field personnel
– Optimizing field personnel workloads
by becoming more efficient
– Providing housing solutions for
employees
Highway 80 Field Office
Midkiff Field Office
San Angelo Field Office
XSPOC SCADA1 System currently contains over 5,600 wells
PXD’s Permian Asset Team operates the largest XSPOC System in the US
Adding advanced programmable logic controllers to disposal & injection wells
Added monitoring for waterflood injection system
Installing electronic gauging on tank batteries
Automation Expansion
Radio Transmitters
1) eXpert System Pump Off Controller – Supervisory Control And Data Aquisition 23
24
Production Optimization Pays Dividends
2,900 Operated Wells
1 Failure Every 10 Months
~7,000 Operated Wells
1 Failure Every 55 Months
Mean
Tim
e B
etw
een
Failu
res
(Mon
ths)
Failu
res p
er
Mon
th
Spraberry5 vertical frac fleets (~20,000 HP
each)
2 horizontal frac fleets (~35,000 HP each)
15 drilling rigs
Well service equipment1
Eagle Ford Shale2 frac fleets
(50,000 HP each)
2 coiled tubing units
25
PXD’s Vertical Integration Reduces Costs and Enhances Execution
Current frac capacity: ~300,000 HP13th largest pressure pumping company in North
America
1) Includes pulling units, frac tanks, hot oilers, water trucks, blowout preventers, construction equipment and fishing tools
Barnett Shale Combo
1 frac fleet
(30,000 HP)
1 coiled tubing unit
Brady sand mine
Spraberry Vertical Deeper Drilling Driving Production Outperformance
26
~6,0
00 ft
~10,
000
ft
Clea
r-fo
rk
Dean
Upp
er
Spra
berr
yW
olfc
amp
Low
erSp
rabe
rry
Limestone PaySandstone PayNon-Organic Shale Non-PayOrganic Rich Shale Pay
Atok
aor
Mis
s.
~11,
000
ft
Str
aw
n
Current Spraberry 40-acre type curve EUR including Lower Wolfcamp: 140 MBOE
Deeper drilling provides potential to add up to 100 MBOE
Current Spraberry 40-acre type curve EUR including Lower Wolfcamp: 140 MBOE
Deeper drilling provides potential to add up to 100 MBOE
Deeper drilling increased from 50% to 65% of 2012 vertical drilling program
Deeper drilling increased from 50% to 65% of 2012 vertical drilling program
Commingled Wells Placed on Production in
Q2
Average 24-hour IP
(BOEPD)1
Potential Incremental EUR
(MBOE)
Prospective PXD Acreage
Strawn 53 147 30 ~70%
Atoka 54 163 50 – 70 40% - 50%
Mississippian 7 124 15 – 40 ~20%
1) Compares to average 24-hour IP of 90 BOEPD for 140 MBOE EUR type curve well in the Lower Wolfcamp
2011 Q1 Q2 2H E
Continuing to Successfully Grow Spraberry Production
27
Spraberry Net Production1 (MBOEPD)
1) Includes production from Strawn, Atoka and Mississippian in vertical wells and horizontal Wolfcamp Shale wells2) Production from horizontal Wolfcamp Shale forecast at ~2,000 BOEPD in 2012; ~1,000 BOEPD average in Q2; ~2,300 BOEPD as of July 1st
45
62
20122
64
61 – 65 MBOEPD FY Guidance
Q2 production negatively impacted by ~4,800 BOEPD due to unplanned third-party fractionation capacity shortfall
−Included 2,800 BOEPD associated with inventory build and 2,000 BOEPD from ethane rejection
−Inventory build expected to be drawn down by year-end
Increased 2012 production growth target from 61 MBOEPD – 65 MBOEPD to 63 MBOEPD - 67 MBOEPD
Strong drilling and well performance expected to offset continuing ethane rejection (up to 2,000 BOEPD) and an earlier than anticipated reduction in the vertical rig count
63 - 67
Horizontal Wolfcamp Play
Industry Activity Focused in the Southern Area
29
PXD Acreage
Spraberry Field
Source: PXD
Current Industry horizontal Wolfcamp
Shale Focus Area
Southern Horizontal Wolfcamp Players
PXD
PXDPXD
COP
DevonEl Paso
El Paso
EOG
BHPApproach
Laredo
Apache
Apache
Horizontal Wells
Horizontal Permits
Horizontal Wolfcamp Rig Count Increasing
43 Wolfcamp Horizontal
Rigs
31
32
U. Spraberry
M. Spraberry
L. Spraberry
Jo Mill Sand
L. Spraberry Shale
Dean
Wolfcamp A
Lower Wolfcamp B
Wolfcamp C1
Wolfcamp C2
Wolfcamp D
Strawn
Upper Wolfcamp B
Horizontal
Wolfcamp ShaleTarget
Intervals
PXD has an extensive Midland Basin geologic database:
−Over 70,000 logs of which 9,000 are digital, allow for excellent structural control and detailed petrophysics
−Growing 3-D seismic database (currently at 1,400+ square miles) ensures appropriate well placement
−Access to ~4,000 feet of whole core provides increased confidence in petrophysical models and supports repeatable results
Petrophysical analysis has identified multiple prospective horizontal Wolfcamp Shale intervals with substantial resource potential
PXD Has Multiple Horizontal Wolfcamp Shale Target Intervals
Miss/Atoka
33
StrawnStructu
reCI = 200’
Wolfcamp B1
StructureCI = 200’
Regional Structure Maps: Strawn and Wolfcamp B
U. Spraberry
M. Spraberry
L. Spraberry
Jo Mill Sand
L. Spraberry
ShaleDean
Wolfcamp A
Wolfcamp B1
Wolfcamp C1
Wolfcamp C2
Wolfcamp D
Strawn
Wolfcamp B2
Wolfcamp B3
13,820 Control Points
6,558 Control Points
10 Miles10 Miles
34
Platform Carbonate
Shelf Edge Carbonate
Slope Sediments & Reef Talus
Carbonate Debris Flows
Carbonate Gravity Flows
Land
Clastic Detrital
Clastic Slope Sediments
Clastic Gravity Flows
Delta
Pelagic Sediments
Silt Cloud in Suspension
Anaerobic Zone(Organic-rich Sediments)
Basinal Sediments
Wolfcamp Facies Map
Schematic Block Diagram ofWolfcamp FaciesIn Midland Basin
San SimonChannel
North BasinPlatform
Central Basin Platfo
rm
GlasscockNose
Val Verde Basin
MarathonThrust Belt
Fluvial-
Deltaic
Fluvial - Deltaic
Platform Carbonate
ClasticSlope
Land
Land
Carbonate Slope
DebrisFlow
CarbGravity Flow
ClasticGravity Flow
Organic-rich Basinal
Sediments
Pelagic Sed.
Suspended Silt
Platform Carbonate
Land
Land
CBP MidlandBasin
MarathonThrust Belt
Blo
ck D
iag
ram
Outlin
e Sea Level
North
Simultaneous deposition of organic-rich carbonate
and clastic sediments in an anaerobic basin results in
hydrocarbon-rich, interbedded, conventionaland unconventional reservoirs
OlderWolfcampClastics
Wolfcamp Facies & Depositional ModelView from
NW
Wolfcamp Comparison to Other Plays
35
Wolfcamp compares favorably to other major oil shale plays
Major Oil Shale Play Characteristics
Attribute Units Wolfcamp Shale1 Eagle Ford2
(Oil Window)
Barnett Shale3
(Combo Play)Niobrara4 Bakken5
Age Permian Cretaceous Mississippian CretaceousDevonian/
Mississippian
Basin Midland South Texas Fort Worth Denver Williston
TVD Depth ft 5,500 - 11,0007,500 - 11,000 5,000 - 8,000 4,000 - 8,000 9,000 - 11,000
Thickness ft 1,500 – 2,600 50 - 350 200 - 400 250 - 600 25 - 125
OOIP/Section MMBO 80 – 220 30 - 90 70 - 90 20 - 40 10 - 20
Porosity % 2 – 10 4 - 11 4 - 5 4 - 14 5 - 8
Quartz % 20 – 50 10 - 25 25 - 40 30 - 60
Carbonate % 10 – 60 60 - 75 6 - 25 ~70 30 - 80
Clay % 10 - 45 10 - 40 25 - 50 25
Permeability nd 10 - 3,000 40 - 1,300 150 - 200 <10,000 50,000 - 500,000
Pressure Gradient psi/ft 0.55 - 0.70 0.65 - 0.70 0.54 0.43 - 0.55 0.43 - 0.75
Recovery Factor % 3 - 15 3 - 10 4 5 - 10 8 - 15
1) Pioneer internal research (modified according to recent core and petrophysical data)2) EOG Analyst Conference April 20103) AAPG Bulletin April 2007, Hart Energy Databank December 2011, HIS, REPSI, EOG February 2010 Investor Presentation4) Hart Energy Databank December 2011, Oil & Gas Investor June and August 20115) Tudor, Pickering, Holt, “The Bakken Momentum Continues” November 2011, Hart Energy Bakken Playbooks 2008 and 2010, Jarvie – AAPG Section Meeting 2008
Horizontal Wolfcamp Shale Drilling Activity
36
Currently focused on holding 50,000 acres in southern part of play during 2012 and 2013
−Expect to drill 90 wells by YE 2013 to hold
acreage
5 rigs currently running; increasing to 7 rigs late Q4
−4 rigs drilling in southern area
−Recently added 5th rig focused on delineating
northern acreage in Midland, Martin and Gaines
counties
• Substantial portion of Pioneer’s acreage
position in these counties could be prospective
Currently targeting ~7,000’ laterals; expect to test longer laterals up to 9,000’
Transitioning from “science” drilling to “development” drilling
−Results from recent “development” wells suggest
wells can be drilled for ~$7 MM
−Increasing utilization of Brady Brown® sand
Railroad Commission of Texas recently adopted new field rules to optimally develop horizontal Wolfcamp Shale and vertical Spraberry
Current Drilling Focus Area
Horizontal Wolfcamp 960-Acre Development Block
375,280 ft
Horizontal wells in same interval spaced at ~725’
7,9
20 ft
960 acres
467’ from lease line
Up to 55 wells per 960-acre section
(20-acre field rules)−41 vertical wells in Spraberry-Wolfcamp
−Up to 14 horizontal Wolfcamp wellbores
• 7 horizontal wells in Wolfcamp A
• 7 horizontal wells in Wolfcamp B
−Additional horizontal wellbores possible in B, C and D intervals
960-acre section metrics (55 wells)
−Capital required: $ 180 MM
−Resource potential: ~15 MMBOE
−F&D cost: ~$15 / BOE Spacing
−Vertical wells
• 900’ from other vertical wells
• 360’ from horizontal wells
−Horizontal wells
• 725’ from other horizontals in same interval
• Stacked horizontals within 300’ in map-view count as one location for spacing purposes
100’ from lease line
Vertical Well Horizontal “A” Well Horizontal “B” Well
1 M
ile½
Mile
Horizontal Wolfcamp Shale Results Exceeding Expectations
38
Gross cumulative production of 2 Giddings wells in northern Upton county from B interval:
− 107 MBOE in 9.5 months (75% oil)
− 83 MBOE in 7 months (75% oil)
Placed 5 additional B interval wells on production during Q2 in southern Upton and Reagan counties
Wells delivered 30-day peak rates ranging from 332 BOEPD to 597 BOEPD (77% to 90% oil)
Continuing to bring new wells on production, including A and B intervals
Expect increasing production rates and EURs as stimulated lateral lengths increased to 7,000’+
P E C O S
PXD AcreagePXD Initial Drilling AreasCompetitor Horizontal AcreageSpraberry Field
First 5 wells in southern area
First two wells in XBC Giddings EstateStimulated lateral lengths: 5,300’
Frac stages: 30EURs: 650 MBOE
1) Based on 7,000’ stimulated lateral with 30 – 35 frac stages; previous EUR range was 350 MBOE – 500 MBOE based on early offset operator data
Based on strong production results and continuing petrophysical analysis, increased EURs in southern
area to 575 MBOE1
Based on strong production results and continuing petrophysical analysis, increased EURs in southern
area to 575 MBOE1
Well
Stimulated Lateral
Length (ft)Frac
Stages
Peak 24-Hour IP(BOEPD)
Peak 30-Day IP
(BOEPD) % Oil
University 10-20 #4H 6,422 36 454 332 77%University 10-19 #4H 6,422 36 671 499 87%University 3-32 #4H 5,702 32 451 380 90%University 3-31 #4H 5,882 33 485 404 90%University 10-13 #5H 6,577 37 942 597 83%
39
Average daily oil production from all 7
horizontal Wolfcamp wells(includes Giddings wells)
Average daily oil production from 5
horizontal Wolfcamp wells on University Lands(excludes Giddings wells)
Horizontal Wolfcamp Well Performance Above 575 MBOE Type Curve
Actual production from horizontal Wolfcamp wellsActual production from horizontal Wolfcamp wells
575 MBOE Type Curve for 7,000’
lateral(oil portion only)
Wells unloading fracture stimulation
fluid
40
Horizontal Wolfcamp Well Performance Above 575 MBOE Type Curve
Horizontal Wolfcamp production normalized to 7,000’ lateral Horizontal Wolfcamp production normalized to 7,000’ lateral
575 MBOE Type Curve for 7,000’
lateral(oil portion only)
Wells unloading fracture stimulation
fluid
Average daily oil production from all 7
horizontal Wolfcamp wells(includes Giddings wells)
Average daily oil production from 5
horizontal Wolfcamp wells on University Lands(excludes Giddings wells)
41
Wolfcamp Shale JV Opportunity Offering 33% to 50% of Pioneer’s
working interest in ~200,000 acres in southern portion of Midland Basin (8% to 12% of total acreage position) −Large, contiguous acreage position
located in Upton, Reagan, Irion and Crockett counties
−Includes all intervals (A, B, C & D) >4,000 potential horizontal
development locations excluding downspacing potential
>2.0 billion barrel gross resource potential
Oil content >70%; liquids > 90% EUR: ~575 MBOE for 7,000’
lateral ~45% before-tax IRR
−$85 oil and $4 gas
−$7 MM well cost
Proposed JV Area
Accelerated development
enhances net asset value and
project returns
Accelerated development
enhances net asset value and
project returns
1)All drilling locations shown on a gross basis2)Includes vertical well potential from shalt/silt, Wolfcamp and deeper intervals3)Assumes average EUR of 575 MBOE per well, >8,000 locations, >400,000 acres , 140 acre
spacing, laterals in all intervals (A, B, C & D) and 75% NRI4)Total PXD Proved Reserves + Estimated Net Resource Potential of >3 BBOE in 2010 and >7
BBOE in 2012
Spraberry40-ac Drilling2
600 MMBOE
Spraberry20-ac Drilling2
1.2 BBOE
Spraberry Waterflood 300 MMBOE
Horizontal Wolfcamp3
3.5 BBOE
Drilling deeper vertical wells, capturing non-traditional shale/silt intervals and drilling horizontally into the Wolfcamp Shale has increased Pioneer’s Permian resource potential by ~400% since 2010Drilling deeper vertical wells, capturing non-traditional shale/silt intervals and drilling horizontally into the Wolfcamp Shale has increased Pioneer’s Permian resource potential by ~400% since 2010
42
Pioneer’s Permian Resource Potential Continues To Grow1
Spraberry20-ac Drilling500 MMBOE
Spraberry40-ac Drilling350 MMBOE
Spraberry Waterflood300 MMBOE
2010 Permian Resource Potential: 1.15 BBOE4
2012 Permian Resource Potential: 5.6 BBOE4
+400%
43
Why Invest In PXD?
Significant Upside Potential From:Oil exposure from proved reserves + estimated resource potential of >7 BBOE and 35,000 drilling locations
Aggressive Spraberry & Eagle Ford Shale drilling programExtensive horizontal Wolfcamp Shale potential
− Joint Venture accelerates future development Strong returns from vertical integrationMargin protection from attractive derivativesStrong balance sheet
Significant Upside Potential From:Oil exposure from proved reserves + estimated resource potential of >7 BBOE and 35,000 drilling locations
Aggressive Spraberry & Eagle Ford Shale drilling programExtensive horizontal Wolfcamp Shale potential
− Joint Venture accelerates future development Strong returns from vertical integrationMargin protection from attractive derivativesStrong balance sheet
Appendix
-
10
20
30
40
50
60
70
80
90
0 12 24 36 48 60
140 MBOE Spraberry 40-Acre Type Curve
45
Gro
ss P
rod
ucti
on
Per
Well (
BO
EP
D)
Month
Strawn / Atoka / Mississippian Potential Not Included
140 MBOESpraberry/Dean/Full
Wolfcamp(70% oil, 20% NGLs, 10%
gas)
140 MBOESpraberry/Dean/Full
Wolfcamp(70% oil, 20% NGLs, 10%
gas)
110 MBOESpraberry/Dean/Upper
Wolfcamp(70% oil, 20% NGLs, 10% gas)
110 MBOESpraberry/Dean/Upper
Wolfcamp(70% oil, 20% NGLs, 10% gas)
Deeper drilling in Spraberry increasing EURs
Spraberry 20-Acre Vertical Well Update
46
20-Acre Drilling (~13,500 locations)
Drilled 39 wells to date
– Most wells drilled to the Lower Wolfcamp with
a few drilled to the Strawn
Results to date indicate production near
type curve for a 40-acre Lower Wolfcamp
well (EUR of 140 MBOE)
Targeting ~25 wells in 2012Spraberry Drilling Rig
Aug 2010 Aug 2011 Aug 2012 Aug 20130
100
200
300
400
500
600
Spraberry Waterflood Continuing to Perform
47
BO
PD
Upper Spraberry
Base Production(110 wells)
Upper Spraberry
Base Production Forecast
Strong waterflood production wedge from flooded zone; number of responding wells continues to increase
7,000-acre project in Spraberry
12 injectors and 110 producers
Injecting 4,100 BWPD $6 - $7 MM capital cost LOE savings from water
handling
7,000-acre project in Spraberry
12 injectors and 110 producers
Injecting 4,100 BWPD $6 - $7 MM capital cost LOE savings from water
handling
Water injection begins
Water injection begins
Continuing to see uptick in production; Upper Spraberry production increased ~25% during Q2 within project area compared to base production decline; further
increase expected
Continuing to see uptick in production; Upper Spraberry production increased ~25% during Q2 within project area compared to base production decline; further
increase expected
Permian Oil Production Transport Options
48
Permian Basin Crude Takeaway
Current Operator Destination Name Capacity Time Frame
Plains Cushing Basin 450,000
Sunoco Nederland West Texas Gulf 400,000
Kinder Morgan El Paso Wink 100,000
Local Refiners Local 200,000
Rail 20,000
TOTAL 1,170,000
Planned Operator Destination Name Capacity Time Frame
Magellan Houston Longhorn (phase I) 135,000 early-2013
Magellan Houston Longhorn (phase II) 90,000 mid-2013
TOTAL 225,000
Possible Operator Destination Name Capacity Time Frame
Magellan/Oxy Houston BridgeTex 278,000 mid-2014
Sunoco Nederland Permian Express II 200,000 mid-2014
TOTAL 478,000
Growing Midstream Infrastructure to Support Production Growth
49
Benedum
Sale Ranch
Gas Processing Midkiff / Benedum
−Current capacity: 260 MMCFD1
−PXD production makes up ~40% of throughput
Sale Ranch−Current capacity: 25
MMCFD1
−Q3 2012 expansion: +100 MMCFD1
−PXD production makes up ~40% of throughput
Planned Driver Plant−Online 1Q 2013−Planned additional
capacity: 200 MMCFD1,2
Pipeline NGL Takeaway to Mont
Belvieu
Chaparral & West Texas Pipelines−PXD production
throughput of ~13 MBPD
in Q1 2012
−Recent West Texas
pipeline debottlenecking
providing an additional 4
MBPD to PXD
New Lone Star Pipeline−4 MBPD to PXD in late-
2012 increasing to 16
MBPD by 2020
−Will connect to all PXD gas
processing plants
Expect >425 MBPD, or ~50%, increase in fractionation capacity at Mont Belvieu in 2013
Expanding processing capacity and contracted takeaway to support Pioneer’s aggressive production growth
PXD Acreage Spraberry Field
West Texas Pipeline
To Mont Belvieu
Chaparral
Pipeline
To Mont Belvieu
Midkiff
1) Wet gas stream with ~160 BBL/MMSCF NGL yield2) Initial capacity of 100 MMCFD with expansion to 200 MMCFD by end of 2013
Planned Driver Plant Lone Star Pipeline
(est.)
To Mont Belvieu
Existing NGL PipelinePlanned NGL Pipeline
50
Certain Reserve Information
Cautionary Note to U.S. Investors --The U.S. Securities and Exchange Commission (the "SEC") prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than “reserves,” as that term is defined by the SEC. In this presentation, Pioneer includes estimates of quantities of oil and gas using certain terms, such as “resource,” “resource potential,” “oil in place,” “EUR” or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC’s definitions of proved, probable and possible reserves, and which the SEC's guidelines strictly 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. U.S. investors are urged to consider closely the disclosures in the Company’s periodic filings with the SEC. Such filings are available from the Company at 5205 N. O'Connor Blvd., Suite 200, Irving, Texas 75039, Attention Investor Relations, and the Company’s website at www.pxd.com. These filings also can be obtained from the SEC by calling 1-800-SEC-0330.