World Journal staff report
TRINIDAD / DALLAS, TX — Pioneer Natural Resources Company announced Monday, May 4 it will close the company’s Denver office as well as make workforce reductions at its Trinidad field office, as a result of continued weakness in natural gas prices and the recent collapse of crude oil and natural gas liquids prices.
The company’s assets in the Raton Basin of Colorado and in the west Panhandle field of Texas will now be managed from Pioneer’s headquarters in Dallas, Texas.
The decision to close the Denver office and to consolidate the Colorado workforce was made to preserve the value of these assets and to allow for their continued development within the constraints of the current commodity pricing environment.
Of the 70 employees in the Denver office, approximately one-third will be offered relocation opportunities to Dallas. Pioneer will offer the remaining employees severance packages and access to outplacement services.
In Trinidad, the total number of employees will be reduced by 100, which is nearly half of the existing workforce. Similarly, the company will offer severance packages and access to outplacement services to those Trinidad employees leaving Pioneer.
Pioneer says the Colorado cuts were necessary because of weak natural gas prices and the collapse of crude oil and natural gas liquids prices.
“Decisions to right-size our workforce are never easy, as we know they impact good people and the communities in which they live. These employees have worked hard for Pioneer, and we place a great deal of value on their efforts. These decisions are an unfortunate reality of the price environment that we face today,” said Tim Dove, President and Chief Operating Officer.
The Denver Business Journal’s Cathy Proctor reported this week the restructuring announcement came one day before Pioneer announced its first quarter earnings. Earlier on Monday, activist investor David Einhart blasted Pioneer’s entire business model saying the company loses money drilling wells.
Pioneer said the company’s headquarters staff in Irving would oversee the company’s operations in the Raton Basin, in southern Colorado, as well as in the West Panhandle field in Texas.
Oil prices have slid to about half the recent peak price of $107 per barrel set in June 2014 and natural gas prices have been similarly dismal — averaging less than $3 per thousand cubic feet during 2015 compared to a peak of about $4.20 per thousand cubic feet last summer.
Pioneer Natural Resources is the largest operator in the Raton Basin in southeastern Colorado, where its long-lived coal bed methane (CBM) production provides a strong production foundation.
The company has approximately 198,000 gross acres and 2,300 wells in the center of the Raton Basin and produces CBM from the coal seams in the Vermejo and Raton formations.
Pioneer Natural Resources is a large independent oil and natural gas company. The firm’s website says, “We deliver strong production and reserve growth through onshore exploration and production in the United States, while providing opportunities for growth and enrichment for business partners, employees and the communities in which we operate.”
Pioneer is one of the most active drillers in Texas’ Spraberry/Wolfcamp oil field in the Permian Basin and the Eagle Ford Shale play in South Texas. “We are one of the largest natural gas operators in the Rockies and Mid-Continent regions with assets in the coal bed methane-rich Raton Basin as well as in the Texas Panhandle gas field,” the website says.
