Prompted by the need to fully characterize a 10,000-plus undrilled vertical-well inventory, Pioneer Natural Resources began using a statistical system to evaluate its Spraberry-trend portfolio. The system incorporated methods advocated in the recently published Society of Petroleum Evaluation Engineers (SPEE) Monograph 3, "Guidelines for the Practical Evaluation of Undeveloped Reserves in Resource Plays." This paper reviews the tools and processes used to statistically value Pioneer's undeveloped potential across its Spraberry-trend acreage. Clearly defining the entire well inventory enabled Pioneer to economically optimize the development of its entire Spraberry-trend portfolio.

Evaluating opportunities with a statistical process enables the historical production performance to be analyzed over a broad test area as opposed to being confined to a location's "direct offsets." The Spraberry trend has a large existing well count that can be used for statistical analysis. However, its complex development history and variability in vertical-well production horizons can make this difficult. To adjust for these impedances, analog well sets were defined by generating standardized multizone production groups and categorizing the increased-density drilling by well vintage. Several unique tools and an extensive individually forecasted well data set were created to increase the efficiency of the process.

A robust statistical definition of Pioneer's entire Spraberry asset facilitated the optimization of the entire Pioneer portfolio through the allocation of the 36-rig program on the basis of economics and land requirements, comparison of potential acquisitions to the current portfolio, and increase in clarity of the net asset value of the Spraberry.

Methods reviewed in this paper have applications beyond vertical portfolio optimization; Pioneer has already modified these statistical evaluation methods to book proved vertical reserves across its acreage position in the Spraberry Trend and is currently using similar techniques to evaluate its active Horizontal portfolio in the Permian Basin. Additionally, other operators could employ similar techniques for economic assessments of their portfolios in other resource plays.

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