Prompted by the need to fully characterize a 10,000 plus undrilled well inventory, Pioneer Natural Resources began using a stochastic system to evaluate its Spraberry Trend portfolio. The system incorporated methods advocated in the recently published SPEE Monograph 3, "Guidelines for the Practical Evaluation of Undeveloped Reserves in Resource Plays." This paper reviews the tools and processes employed 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 using a stochastic 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 leveraged for statistical analysis. However, its complex development history and variability in vertical well production horizons can make this difficult. To adjust for these impedances, analogue well sets were defined by generating standardized multi-zone 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 its entire Pioneer portfolio through: allocation of the 36 rig program based on economics and land requirements, comparing potential acquisitions to the current portfolio, and increasing clarity of the Net Asset Value of the Spraberry.

Methods reviewed in this paper have applications beyond portfolio optimization; Pioneer has already modified these stochastic evaluation methods to book proved reserves across its acreage position in the Spraberry Trend. Additionally, other operators could employ similar techniques for economic assessments of their portfolios in other resource plays.

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