Latest News and Analysis
Deals and Transactions
Track Drilling (Rigs by operator) | Completions (Frac Spreads)

Drilling & Completions | Quarterly / Earnings Reports | First Quarter (1Q) Update | Financial Results | Capital Markets | Capital Expenditure

Pioneer Natural Resources Company First Quarter 2023 Results

emailEmail    |    printPrint    |    bookmarkBookmark
   |    Tuesday,May 02,2023

Pioneer Natural Resources Company announced its first quarter 2023 results.


  • First quarter oil production averaged 361 thousand barrels of oil per day (MBOPD), near the top end of guidance
  • First quarter total production averaged 680 thousand barrels of oil equivalent per day (MBOEPD), near the top end of guidance
  • Generated strong first quarter free cash flow1 of $948 million
  • Declared a quarterly base-plus-variable dividend of $3.34 per share to be paid in June 2023, reflecting a 14% increase to the base dividend component
  • Repurchased $500 million of shares during the first quarter (2.4 million shares)
  • Refreshed share repurchase program with a new $4 billion authorization, replacing the prior program
Pioneer Natural Resources Co. reported financial and operating results for the quarter ended March 31, 2023. Pioneer reported first quarter net income attributable to common stockholders of $1.2 billion, or $5.00 per diluted share. These results include the effects of noncash mark-to-market adjustments and certain other unusual items. Excluding these items, non-GAAP adjusted income for the first quarter was $1.3 billion, or $5.21 per diluted share. Cash flow from operating activities for the first quarter was $2.3 billion.

Chief Executive Officer Scott D. Sheffield stated: "Pioneer reported an outstanding first quarter, achieving strong production growth and returning significant capital to shareholders. Our continued focus on efficient operations and the development of our best-in-class, high-return assets delivered production near the top end of guidance and generated approximately $950 million of free cash flow1. This free cash flow, coupled with our strong balance sheet, supported $1.3 billion of shareholder returns through our second quarter base-plus-variable dividend of $3.34 per share and $500 million of opportunistic first quarter share repurchases."

"Consistent with Pioneer's commitment to maintain a strong and growing base dividend, we increased the base dividend by 14%. Additionally, we refreshed our share repurchase program with a new $4 billion authorization. These enhancements and our refined return of capital framework, which returns at least 75% of free cash flow1, demonstrate our commitment to returning significant capital to our shareholders while continuing to improve the long-term financial strength of the Company. Under this framework, we expect to return approximately 40% of our current market capitalization over the next five years assuming an $80 West Texas Intermediate oil price2."

"Pioneer's strong operational results and unmatched high-return, contiguous acreage position supports our top-tier margins and positions Pioneer to continue to deliver significant value to our shareholders."

Financial Highlights

Pioneer maintains a strong balance sheet, with unrestricted cash on hand as of March 31, 2023 of $1.2 billion and net debt of $4.7 billion. The Company had $3.2 billion of liquidity as of March 31, 2023, comprised of $1.2 billion of cash and a $2.0 billion unsecured credit facility (undrawn as of March 31, 2023).

Cash flow from operating activities during the first quarter was $2.3 billion, leading to free cash flow1 of $948 million.

During the first quarter, the Company's total capital expenditures3 totaled $1.2 billion.

For the second quarter of 2023, the Company's Board of Directors (Board) has declared a quarterly base-plus-variable dividend of $3.34 per share, comprised of a $1.25 base dividend and a $2.09 variable dividend. This represents a total annualized dividend yield of 6%4. The base dividend component includes a 14% increase, representing the sixth consecutive year that Pioneer has increased the base dividend5.

In addition to a strong dividend payout, the Company continues to execute opportunistic share repurchases. During the first quarter, the Company repurchased $500 million of common stock at an average share price of $206. The Board also authorized a new $4 billion common stock repurchase program. This new authorization replaces the existing $4 billion common stock repurchase program, which had $1.9 billion remaining at the time of the new authorization.

In conjunction with Pioneer's base dividend increase and new share repurchase authorization, the Company has refined its capital return framework commencing with second quarter free cash flow1. Under the modified framework, Pioneer expects to return at least 75% of quarterly free cash flow1 to shareholders, through a combination of base-plus-variable dividends5 and opportunistic share repurchases. Capital returns after paying the base dividend from the 75% of quarterly free cash flow will be allocated to variable dividends and opportunistic share repurchases. The remaining quarterly free cash flow1, of approximately 25%, will be directed to the balance sheet. This modified framework continues to be peer-leading, returning significant capital to shareholders, while also providing the Company with increased financial flexibility and additional balance sheet strength.

Financial Results

For the first quarter of 2023, the average realized price for oil was $75.15 per barrel. The average realized price for natural gas liquids (NGLs) was $27.30 per barrel, and the average realized price for gas was $3.79 per thousand cubic feet. These prices exclude the effects of derivatives.

Production costs, including taxes, averaged $10.82 per barrel of oil equivalent (BOE). Depreciation, depletion and amortization (DD&A) expense averaged $10.84 per BOE. Exploration and abandonment expense was $15 million. General and administrative (G&A) expense was $84 million. Interest expense was $28 million. The net cash flow impact related to purchases and sales of oil and gas, including firm transportation, was a loss of $54 million. Other expense was $41 million, or $30 million excluding unusual items.

Current income tax expense was $225 million. The Company paid its estimated first quarter cash tax payment in April 2023 based on the Safe Harbor provision. The Company's effective tax rate was 22% for the quarter.

Operations Update

Pioneer's continued focus on operational excellence in the Midland Basin enabled the Company to place 128 horizontal wells on production during the first quarter of 2023.

Pioneer's large and contiguous acreage position provides the opportunity to drive further operational enhancements. The development of wells with lateral lengths in excess of 15,000 feet provides significant capital savings on a per foot basis and generates returns that are on average 20% higher than a 10,000-foot lateral well. The Company is expanding the development of 15,000 foot laterals and expects to place more than 100 of these wells on production in 2023.

Additionally, Pioneer has delivered significant cost and efficiency improvements from the utilization of simulfrac completions and localized sand mines. The Company added a third simulfrac fleet in the first quarter of 2023 and expects a second localized sand mine to commence operations during the second quarter. Consistent with the Company's commitment to sustainable operations, Pioneer expects 100% of its completions fleets to be either electric or dual-fuel powered by the second half of 2023.

Extended laterals, utilization of simulfrac fleets, localized sand and the transition of completions fleets from diesel-only fuel are a few examples of the many continuous improvement efforts that the Company's operational teams continue to generate.

2023 Outlook

The Company expects its 2023 drilling, completions, facilities and water infrastructure capital budget3 to range between $4.45 to $4.75 billion. Additionally, the Company expects its capital budget for exploration, environmental and other capital to range between $150 million to $200 million, principally related to drilling four Barnett/Woodford formation wells in the Midland Basin, additional testing of the Company's enhanced oil recovery (EOR) project and adding electric power infrastructure for future drilling, completions and production operations. Pioneer expects its capital program to be fully funded from 2023 cash flow6, which is projected to be approximately $9 billion.

During 2023, the Company plans to operate an average of 24 to 26 horizontal drilling rigs in the Midland Basin, including a three-rig average program in the southern Midland Basin joint venture area. The 2023 capital program is expected to place 500 to 530 wells on production. Pioneer expects 2023 oil production of 357 to 372 MBOPD and total production of 670 to 700 MBOEPD.

Second Quarter 2023 Guidance

Second quarter 2023 oil production is forecasted to average between 357 to 372 MBOPD and total production is expected to average between 674 to 702 MBOEPD. Production costs are expected to average $11.00 per BOE to $12.50 per BOE. DD&A expense is expected to average $10.50 per BOE to $12.00 per BOE. Total exploration and abandonment expense is forecasted to be $10 million to $20 million. G&A expense is expected to be $78 million to $88 million. Interest expense is expected to be $39 million to $44 million. Other expense is forecasted to be $20 million to $40 million. The cash flow impact related to purchases and sales of oil and gas, including firm transportation, is expected to be a loss of $30 million to a loss of $70 million, based on forward oil price estimates for the quarter.

The Company's effective income tax rate is expected to be between 22% to 27%, with current income tax provision for the quarter expected to be $200 million to $275 million, representing estimated federal and state taxes based on forecasted 2023 taxable income. The Company expects its cash tax rate for the full-year 2023 to approximate a mid-to-high teens percentage of book income.

Environmental, Social & Governance (ESG)

Pioneer views sustainability as a multidisciplinary effort that balances economic growth, environmental stewardship and social responsibility. The Company emphasizes developing natural resources in a manner that protects surrounding communities and preserves the environment.

During 2022, Pioneer continued to advance the Company's leading ESG strategy. Highlights from 2022 include partnering with NextEra Energy Resources to develop a 140-megawatt wind generation facility on Pioneer owned surface acreage and joining the Oil and Gas Methane Partnership (OGMP) 2.0 initiative, which is considered the gold standard on methane emission measurement and reporting for the upstream energy industry. Additionally, Pioneer's continued progress on its ESG initiatives led to an increase to an ESG "A" rating from MSCI.

For more details, see Pioneer's 2022 Sustainability Report and 2022 Climate Risk Report at

Related Categories :

First Quarter (1Q) Update   

More    First Quarter (1Q) Update News

Ark-La-Tex News >>>

Northeast News >>>