The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant
U.S. shale oil producer Pioneer Natural Resources (PXD.N) will reshuffle its drilling portfolio next year to target wells with potentially higher returns, a move to boost productivity levels.
The move comes as its third quarter oil production fell about 9% to 354,000 barrels per day (bpd) from year-ago levels. Quarterly output was at the upper end of its forecast, which called for between 345,000 bpd and 360,000 bpd.
"Productivity came in a little less than we anticipated, and we wanted to rectify that," said Pioneer President Richard Dealy of the rationale for the changes.
Shares fell more than 1% at $262.21 in early trading.
Under the new drilling program, Pioneer's well productivity - how much oil it receives per well - is anticipated to exceed 2021 levels.
"We're really just reshuffling the portfolio and bringing forward higher return wells and deferring some of the wells" that are not as productive, he told analysts during an earnings call on Friday.
Pioneer expects to run about 24 to 26 drilling rigs, up from between 22 and 24 this year, and up to seven hydraulic fracturing crews, from six currently, executives said.