Providing Its Own Field Services Is Widening Pioneer's Margins

Pioneer Natural Resources saves itself a buck an Mcf by providing many of its own services in developing its coalbed-methane play in the Raton Basin of southern Colorado. "That dollar margin goes to us," Jay Still, executive vice president, Western division, said at the second annual Developing Unconventional Gas conference in Fort Worth, sponsored by Hart Energy Publishing LP. Drilling is the largest component of well costs (32%), and Pioneer controls some 50% of the rigs it uses in the play; stimulation costs are 26% and completion, 22%. Among stimulation costs, some 13% is for sand, which has been difficult to get. "I've had a person full-time pirating the rails for unclaimed sand cars," Still said. A solution, instead, has been to develop its own frac-sand operation in Nebraska. "We have complete control of sand supply (now)." For more on this, see the April issue of Oil and Gas Investor. For a subscription, call 713-260-6441.