Pioneer Natural Resources (PXD) owns large amounts of acreage in the Permian basin, one of the resources with the most upside potential from a resource estimate perspective due to the multistack pay nature and various horizontal targets, as well as better wells as the company moves north to develop its acreage, says Cameron Horwitz, Director of Exploration and Production at U.S. Capital Advisors LLC.
“The company has about 900,000 acres in the Permian basin with the potential for a multipay stack oil concept, whether it is the Wolfcamp, the Cline shale, the lower Spraberry formation or others. There are several opportunities for horizontal oil development and a lot of capital, a lot of running room ahead of that,” Horwitz said.
Horwitz says PXD is developing assets in places like the Midland horizontal Wolfcamp, and the company is going into locations with better extraction potential. He says the development of resources remains a problem for E&P companies, but he says companies may choose to partner up to develop their acreage.
“As operators move north, which is where Pioneer is dominant, we think there are better rock properties, potential for better wells, higher estimated ultimate recoveries and ultimately better capital productivity,” Horwitz said. “Pioneer is currently drilling their first horizontal well in Midland County, which I think will be a pretty big data point for that company. We continue to like that name.”