Pioneer flourishes in U.S. shale fields where others failed

Pioneer Natural Resources  (PXD -1%) is expanding its fleet of drilling rigs in the northern part of Texas’ Spraberry field to 16 from five this quarter, bucking the trend among bigger explorers such as Shell that are writing down U.S. shale assets and shrinking their footprints after drilling money-losing wells.

Escalating costs are creating a squeeze on the biggest oil producers that is eroding profitability, Chevron CEO John Watson says, but PXD's lack of exposure to the costliest and riskiest international projects, such as liquefied natural gas complexes and ultra-deepwater oil platforms, shields it from some of the pressures impacting larger peers.

PXD’s cost to extract the equivalent of a barrel of crude declined 4.8% to $13.36 during Q4 2013.

PXD is spending ~$8M per well to drill sideways through the Spraberry field, and some of those wells probably will gush 1M barrels or more before they peter out decades from now, according to a presentation published on the company’s website March 7.

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