Pioneer Natural Resources Co. is on track to test its deep Barnett and Woodford gas in the Midland Basin next year.
“Obviously, gas continues to do very well,” Neal Dingmann, analyst at Truist Securities, said when asking how the 2023 plans play into gas-price forecasts during Pioneer’s third-quarter earnings call Oct. 28.
Rich Dealy, Pioneer president and COO, said, “We expect those wells obviously—they’re deeper—to be gassier and we know we'll find resource there.”
The tests will reveal “just what's the productivity of those wells.”
While the Waha spot price has cooled since earlier this year—the morning of Oct. 28, it was minus 30 cents while pipelines were down—having deep Permian gas at the ready to monetize is handy toward “where we are expecting to be longer term on the forward curve,” Dealy said.
“We just want to understand what that resource is. So we think it's worthwhile to spend some capital next year to test those zones and then we'll see what the productivity looks like and go from there.”
Of Pioneer’s current Permian gas production—that’s “solution gas” from its oil wells—about 25% of it is priced at Waha.
Dealy said additional transportation capacity next year and in 2024 will result in that “we’ll have very little exposure in the late 2023-2024 time period at Waha.”
Mississippian-age Barnett and Woodford underlie the Permian’s popular oil targets—the Permian-age Wolfcamp and Spraberry—and are at depths up to more than 12,000 feet.