From the point of purchase from each well the company must accomplish:
to the gathering system,
easements and/or Rights-of-Way,
measurement of gas flow,
analysis of gas composition,
delivery to pipelines,
marketing and scheduling,
reporting and payment to producer and governmental agencies.
Further services may be required on a case-by-case basis:
Lease/Purchase/Supply of Equipment (Compression),
System Pressure Maintenance,
Dehydrate, Process (Liquids), or Treat (H2S) production.
paid via wire-transfer by those who purchase hydrocarbons downstream,
as opposed to being paid by the individual producer. This is a distinct
advantage enhancing the quality of cash flow.
Competitive Advantages: Think, Serve and Respond
Pioneer has achieved significant growth over the prior 5 years by
strategically thinking through potential acquisitions, determining
downside outcomes and identifying growth prospects within, and outside
the specific project. As the Allison case illustrates, the company
has the capacity to see a larger opportunity within smaller projects.
Pioneer, largely Mr. Allard, is engaged daily in the process of
interacting with industry participants, discussing potential opportunities
and extending himself as a potential acquirer.
In negotiating acquisitions, the company maintains a nimbleness
and perseverance to reach agreements that include conditional walk-away
rights, provide ample time to ensure minimum throughput, and scout
the potential to compound the scope of the project with neighboring
opportunities. Pipeline dispositions of this scale are generally
local and provide "locals" a distinct advantage.
Acquisitions are only as good as their eventual throughput. Pioneer
prides itself on the ability to provide win-win solutions to producers.
While this may take time to educate a customer on how, over the
long term a particular solution may be more beneficial, it pays
in spades once the light goes on. Providing cost-effective, long-term
solutions and seamless service keeps producers flowing to the line
and willing to add new wells to the system. Further, reputation
attracts new producers to the company. And when there is a split
in the seam? React deftly.
Pioneer has assembled a team of knowledgeable, dedicated field personnel
who conduct daily inspections of assigned systems and are empowered
to react to the needs of producers. Many of the field operators
have been active on their systems predating Pioneer's acquisition
and take pride in the high level of service they provide. This team
is truly the face of Pioneer to the producer community, providing
a positive reflection on Pioneer as a company.
The recent acquisition of Aquila systems has both required and afforded
the company an opportunity to upgrade back office operations. Two
key additions in the areas of Revenue Accounting and Contracts Administration
have bolstered the back office efficiency and accountability. Pioneer
has elevated its level of responsiveness, reporting and internal
Operating 10 systems may appear cumbersome. Certainly having one
system generate $20 million in revenue is a much more efficient
deployment of capital; on it's face. Pipes are land locked. New
production is not. The system diversification the company currently
maintains provides a portfolio affect on earnings streams over the
long term. As development plays move about West Texas, Pioneer is
not captive to one field or project, but can access new production
in multiple areas.
Pioneer has evolved into a streamlined efficient operation with
a deepening knowledge of its customers and profit center. This organizational
growth tends both to the current needs of the company while establishing
a path to overcome the challenges its growth strategy will present.