Pioneer Natural Resources Company Earnings Call Insights: Wolfcamp A & B Prospectivity, A Zone Design
Wolfcamp A & B Prospectivity
Ryan Oatman – SunTrust Robinson Humphrey, Inc.: Can you talk about the prospectivity of this Wolfcamp A across your acreage based on what you’ve seen and how similar is that zones prospectivity compared with say the Wolfcamp B map that you’ve published?
Scott D. Sheffield – Chairman and CEO: The Wolfcamp A is pretty much like the Wolfcamp B is pretty much our entire 900,000 acres. And the Wolfcamp A, as I mentioned has the most oil in place of the Wolfcamp member benches. There is a lower Spraberry Shale that had more oil in place, which we’re in the process of testing over the next several weeks. The Wolfcamp A, if you remember, we’ve had some good results to the south. We’ve been focused more on the B. This Wolfcamp A happens to be about 2,000 feet deeper. So a combination of better pressure and staying, and our frac zone stand pretty much in zone, the entire frac stage several stages is probably the reason why we’re seeing such great performance. So, I said also we’re going to be moving up several more wells in the Wolfcamp A in the northern 600,000 acres by late ’13, first half of ’14 into the Q.
Ryan Oatman – SunTrust Robinson Humphrey, Inc.: Then conceptually, how should we think about the Jo Mill versus the lower and middle Spraberry. Do you see those as separate zones that you can target or do you think you’ll be able to attack some of these with the same wellbore say with the lower kind of fracking up into the Jo Mill?
Scott D. Sheffield – Chairman and CEO: No, there is enough separation between all three. The middle Spraberry Shale, the Jo Mill Shale and the lower Spraberry Shale, they’re both – all three very thick. There is enough separation between all three that we don’t anticipate either fracs to go into the other zone. So, we are using micro-seismic on all of the Spraberry Shale test and we’re testing now, so we’ll have better results. We’re just now in the process of completing and fracking some of our first wells in both Martin and Midland County in the next few weeks…
Ryan Oatman – SunTrust Robinson Humphrey, Inc.: Then one last one for me. Moving the two out of the five rigs over the Andrews County, can you talk about what has you encouraged there and what zones you plan to target?
Scott D. Sheffield – Chairman and CEO: Yes, we’re targeting both the Wolfcamp B and the Wolfcamp D, are the primary zones. We do have some leases expiring in the area that’s one of the reasons we’re moving over there. They’re pretty much on Andrews Martin County line. We don’t have a large position that we continue to move west, obviously the acreage sort of plays out, that’s why we don’t have lot of acreage way west of that, but it does set up several thousand acres in Andrews in addition, it sets up our northern acreage in Martin County.
A Zone Design
Doug Leggate – Bank of America Merrill Lynch: This is getting very interesting. I wonder if I could just try a couple of questions please. The A well is substantially better it looks like than several of the B wells that you’ve drilled and the results given so far. Is there anything particularly unique about the A in terms of well design or are we really just looking at significant upside risk to your tight curve guidance?
Scott D. Sheffield – Chairman and CEO: Now I think again the, the geologists told us originally that the A zone has the most oil in place and I think there is lot of oil in place. I’m hoping that’s the reason why we’re seeing the flattening. So hopefully the amount of oil in place in the Wolfcamp A is allowing the well to flatten sooner than the other two wells. We need more data time, but it looks like it is moving towards that, 1 million barrels of oil equivalent. We did not do really do anything different. The two wells, we’re about 700 feet apart, between the two Hutt wells, so that’s why we’re excited about it and we’re going to drill several more…
Doug Leggate – Bank of America Merrill Lynch: I got a couple of follow-ups if I can just try these. So, your – I think, if I recollect, you are talking about an average type curve in the North of 500,000 barrels of oil equivalent. Can you help us – I’m just reconciling that number relative to, obviously its early days, but help us reconcile why you’ve still got such what looks like a low estimate? And I’ve got a follow-up please.
Scott D. Sheffield – Chairman and CEO: Yes. As you know now, we only have three wells they are starting to obviously show much higher than the 650, as I’ve I mentioned 800,000 to 1 million. So I think we have some pretty good data points between now and at the end of the year to officially increase that type curve at some point. So be patient…
Doug Leggate – Bank of America Merrill Lynch: Do you mean the 650 or the 500, because I think your guidance is still 500.
Scott D. Sheffield – Chairman and CEO: Yes. We’re showing you the 650 and these three wells were doing way above the 650. So we will be increasing it obviously sometime by the end of the year or early next year.
Doug Leggate – Bank of America Merrill Lynch: Last one for me; 10,000 foot laterals in South. Is that now a sustainable well design? And I’ll leave it there. Thanks.
Timothy L. Dove – President and COO: Yeah, I think that we’ve done it many, many times now over I think 10 wells and so accordingly I think we have no risk in terms of the well design. We are used to do in there.
A Closer Look: Pioneer Natural Resources Company Earnings Cheat Sheet>>