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I’m adding Pioneer Natural Resources (PXD) to my long-term Jubak Picks 50 portfolio on Friday, January 13. (To read more about the general 2012 update of the portfolio, read my recent post.)

To understand why I’m picking this oil and gas company from a long list of alternatives, you have to get deep inside the US oil boom going on now.

That boom is a result of oil companies bringing new technologies to bear on fields that were thought to be near the end of their lives. Or on fields that were thought to be impossible to drill.

Pioneer’s Spraberry field fits that first category. The field is one of the oldest—and largest—in the Permian Basin, and despite having drilled in the area since the late 1980s, Pioneer continues to expand production by using technology to drill into deeper formations, and that has almost doubled estimated ultimate reserves. Pioneer has 900,000 Spraberry acres under lease.

Those estimated reserves don’t include what looks like it will turn out to be a major new Permian play from the deep Wolfcamp Shale formation. This reserve, initially thought to be a relatively small niche play, now looks to be a big horizontal reserve like that found in the Eagle Ford shale. The Wolfcamp reserve continues to look bigger as Pioneer drills more wells.

In the second category—fields that were thought impossible to drill before new technology developed in the late 1970s—I’d put the Eagle Ford shale formation, where Pioneer controls 140,000 net acres.

Thanks to a $15 billion joint venture deal with Reliance Industries in 2010, the company has been able to pursue an aggressive drilling program that targets 1,000 wells over the next five years. That will, the company believes, expand production 34-fold by 2015. About one-third of Pioneer’s Eagle Ford acreage is in formations rich in natural gas liquids and distillates, rather than natural gas.

Finally, Pioneer rounds out its Texas big three with 70,000 acres in the Barnett Shale formation.

The relatively high presence of oil and natural gas liquids in these shale reserves has let Pioneer cut drilling activity to almost nothing on its natural gas fields in Colorado, Kansas, and Texas.

In the face of depressed natural gas prices, Pioneer has reduced its natural gas production by about 4% while increasing its overall production by 15% in 2011. The company now projects 18% compounded annual production growth through 2014.

If you’re interested in these shares for something shorter than the five- to ten-year holding period of my Jubak Picks 50 portfolio, I calculate a target price of $115 a share by December 2012. The shares closed at $97.63 on January 13.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did own shares of Pioneer Natural Resources as of the end of September. For a full list of the stocks in the fund as of the end of September see the fund’s portfolio here.