Pioneer Natural Resources marked its fifth straight year of drilling and completion efficiency gains and generated $8.4 billion in free cash flow in 2022.
Chief Executive Officer Scott Sheffield said in Pioneer’s fourth quarter earnings report Feb. 23 that his company also had a record production year.
“Strengthening our fortress-like balance sheet and remaining disciplined with a reinvestment rate of 30 percent of our cash flow, we remain highly constructive on oil prices,” Sheffield said. “I’m still very optimistic that we’ll move back into that $90 to $100 range.
“The company plans to deliver 2023 full year reduction ranging from 357,000 to 372,000 barrels of oil per day and total production ranging from 670,000 to 700,000 per day.”
Sheffield said key projects will include the exploration drilling of four wells targeting the Barnett and Woodford formations in the Midland Basin.
“We expect to generate greater than $4 billion of free cash flow in 2023 from approximately $9 billion of projected operating cash flow,” he said. “Throughout 2023 we will operate between 24 and 26 drilling rigs.
“The contiguous nature of our acreage position provides multiple operational benefits including drilling and completing 15,000-foot-plus laterals. Our lateral length developments delivered strong productivity and increased returns when compared to a 10,000-foot lateral well.
“Drilling and completing these long laterals drives significant efficiency gains that reduce capital costs for drilling and completion savings of 15 percent on a cost per-lateral-foot basis,” Sheffield said. “To date we’ve identified more than 1,000 locations for long lateral development and we expect more than 100 of these wells to be placed on production in 2023.”
The CEO said his Irving-based company will also benefit from the continued utilization of simul-frac operations and will reduce costs by $200,000 per well.
“The implementation of simul-frac completions is a major contributor to our efficiency improvements and cost savings over the last couple of years,” he said. “We continued to build on that success with the deployment of a third full-time simul-frac fleet earlier this quarter.”
President-Chief Operating Officer Rich Dealy said the climate risk report that Pioneer published in 2022 “highlighted our focus and significant progress on environmental, social and governance initiatives and their impacts on our business.
“We believe these actions demonstrate our commitment and focus on ESG and further strengthen Pioneer’s position as a leader in the industry,” Dealy said. “We continue to provide low emissions barrels to the market and produce some of the most sustainable barrels in the world, behind only Norway on a CO2 intensity basis.
“When combined with our low break-even oil price, Pioneer provides exceptionally resilient production that we expect will have a place in the global market for decades to come.”
