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Q1 2011 Earnings Call – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · May 3, 2011 · 47 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 1
    First Quarter 2011 Earnings May 3, 2011
  2. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 2
    Highlights Q1 2011 adjusted income1 of 81 MM, or .68 per diluted share Excludes net gain from unusual items of 432 MM after tax, or 3.68 per diluted share Excludes unrealized mark-to-market derivative loss of 164 MM after tax, or 1.40…
  3. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 3
    Targeting 18+% Compound Annual Production Growth For 2011 2013 Forecasting annual production growth of 15% to 19% from 2010 to 20111 Targeting compound annual production growth of 18+% for 2011 - 2013 Liquids production increases…
  4. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 4
    2011E Capital Spending and Cash Flow1,2 Capital program includes: Drilling capital: 1.6 B 1.1 B Spraberry 110 MM Eagle Ford Shale (net of carry) Sensitivity to Commodity Prices ( MM) 9.00 170 MM Barnett Shale Combo 8.00 115 MM…
  5. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 5
    2012E Cash Flow From Operations Sensitivity to Commodity Prices ( MM) 9.00 8.00 NYMEX Gas Price (/MCF) 7.00 6.00 5.00 4.00 3.00 70.00 75.00 80.00 85.00 90.00 95.00 100.00 105.00 110.00 115.00 120.00 125.00 130.00…
  6. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 6
    2013E Cash Flow From Operations Sensitivity to Commodity Prices ( MM) 9.00 8.00 NYMEX Gas Price (/MCF) 7.00 6.00 5.00 4.00 3.00 70.00 75.00 80.00 85.00 90.00 95.00 100.00 105.00 110.00 115.00 120.00 125.00 130.00…
  7. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 7
    Substantial Operating Cash Flow Growth1 Billions 2.6 2.1 1.5 0.92 2010 2011E 2012E 2013E 1) Based on early May strip pricing and includes derivative positions as of May 2, 2011 2) Excludes 0.4 B (from reported cash flow…
  8. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 8
    Investment Highlights 20,000 liquids-rich drilling locations in low-risk resource plays Successfully accelerating drilling in the Spraberry and Eagle Ford Shale Redeployment of proceeds from Tunisia sale allows further…
  9. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 9
    PXD In The Spraberry Field PXD Acreage All Others PERMIAN BASIN 24 MM acres 150 miles PXD leasehold represents 50% of total Spraberry acreage 75% of PXD leasehold held by production 6,500+ operated wells 20,000+ drilling…
  10. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 10
    Continuing To Test Deeper Intervals In Spraberry Field Strawn 6,000 ft Upper Clear Spraberry Spraberry fork Program focused in Midland, Martin and Glasscock counties 38 vertical wells completed in the Strawn since Q1 2010…
  11. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 11
    20-Acre And Waterflood Update 20-Acre Drilling (13,000 locations) Drilled 18 wells in 2010; 14 wells on production Capturing pay from Lower Wolfcamp, Strawn and shale/silt intervals Early results indicate production outperforming…
  12. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 12
    Wolfcamp Horizontal Activity Several operators targeting various Wolfcamp intervals with horizontal wells Jo Mill Lower Spraberry Shale Broad Oak Dean Leonard Shale Wolfcamp Pioneer Carbonate Tippett Shale EOG Wolfcamp El…
  13. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 13
    Spraberry Horizontal Drilling Results And Plans Two horizontal wells drilled and completed 4,000 foot laterals with 15 stage completions First well completed in Wolfcamp carbonate Microseismic indicated completion did not…
  14. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 14
    Vertical Integration in Spraberry Controls Costs and Enhances Execution Operating 14 Company-owned drilling rigs Expanding frac fleet ownership 3 Company-owned fleets currently operating Adding 1 Company-owned fleet in May and 1…
  15. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 15
    Significantly Increasing Wells On Production As New Frac Fleets Added 2011 Spraberry Wells Put On Production Per Quarter 300 Adding 7th frac fleet in Q43 Increasing frac fleets from 4 to 62 150 4 frac fleets1 0 Q1 Q2E…
  16. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 16
    Continuing to Accelerate Spraberry Development Spraberry Net Production1 (MBOEPD) 66 - 70 43 46 52 - 56 47 - 50 41 - 43 40 34 2010 Q1 Q2E 2HE 2012E 2013E 2011E Rigs 30 YE 32 currently 35 mid year 45 45 1) Includes…
  17. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 17
    Eagle Ford Shale Operational Update Running 9 rigs Reducing drilling time and enhancing completion techniques Current gross well cost: 7 MM - 8 MM Before tax IRRs: 110% for high condensate yield and 70% for low condensate yield at…
  18. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 18
    Significantly Increasing Wells On Production As New Frac Fleets Added 2011 Eagle Ford Shale Wells Put On Production Per Quarter 50 Adding third frac fleet2 Initiated 2 frac fleets1 25 0 Q1 Q2E Q3E Q4E Rigs 8 9 12 12 1)…
  19. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 19
    Accelerating Eagle Ford Shale Development Eagle Ford Net Production (MBOEPD) 40 45 26 30 12 15 18 - 23 7-9 5 2 2010 Q1 Q2E 2HE 2012E 2013E 2011E Rigs 7 YE 9 currently 12 mid year 14 16 20
  20. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 20
    Barnett Shale Combo Play Current acreage: 70 M net acres 600 drilling locations Barnett Shale Liquids-Rich Area Continuing to grow leasehold position (42% gas, 42% NGLs, 16% oil) Acquired 160 square miles of 3-D Combo Play Activity…
  21. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 21
    Accelerating Barnett Shale Combo Development Barnett Shale Net Production1 (MBOEPD) 16 - 20 First Company- owned frac fleet operational in May 9 - 11 5-7 3-4 3 2 2010 Q1 Q2E 2HE 2012E 2013E 2011E (4 - 5 MBOEPD Avg.)…
  22. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 22
    Q1 2011 Earnings Summary Millions Per Diluted (After Tax) Share Net income attributable to common stockholders 349 2.96 Unrealized mark-to-market (MTM) derivative losses (262 MM before tax) 164 1.40 Adjusted income excluding…
  23. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 23
    Price Realizations1 Realized Prices (excludes VPPs and derivatives) 89.43 79.93 73.77 72.63 70.41 40.77 41.03 42.17 33.36 33.49 5.23 4.02 4.23 4.14 3.76 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q1…
  24. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 24
    Production Costs (per BOE)1 13.27 13.31 12.17 0.78 11.54 1.08 10.94 Q1 11 vs. Q4 10 Comparison 0.67 Workovers 1.01 Q4 LOE benefitted from non- 0.73 3.32 3.27 2.59 recurring 10 MM Alaska processing Production & 2.76 Ad Valorem…
  25. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 25
    Q2 2011 Guidance1 Guidance Daily Production (MBOEPD) 116 - 121 Production Costs (/BOE) 12.00 14.00 Exploration & Abandonment ( MM) 25 35 Drilling and Acreage 10 - 20 Seismic Activity and Personnel 15 DD&A (/BOE) 13.50 15.00 G&A…
  26. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 26
    Supplemental Information Supplemental Information Slides Slide Liquidity Position 28 2010 Capital Spending 29 Oil and Gas Revenue 30 Historic Production 31 Derivative Position 32 - 34 Future Amortization of Discontinued and…
  27. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 27
    Liquidity Position (03/31/11)1 Net debt (net of cash balance of 521 MM): 2.0 B Unsecured Senior Credit Facility availability: 1.2 B Net Debt-to-Book Capitalization: 31% Maturities and Balances2 2011 2012 2013 2016 2017 2018 2020…
  28. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 28
    2011 Capital Spending1,2 Millions 343 15 Acreage 328 Drilling Q1 1) Excludes asset retirement obligations (ARO), capitalized interest, G&G G&A and discontinued operations 2) Excludes Q1 spending of 93 MM for vertical…
  29. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 29
    Oil and Gas Revenue1 Millions 497 472 472 10 VPP Deferred Revenue 22 422 437 22 22 22 487 450 450 400 415 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 1) All periods presented have been restated to exclude discontinued…
  30. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 30
    Production (MBOEPD)1 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Spraberry 31 32 35 38 40 Raton 29 28 28 28 27 Eagle Ford Shale 1 2 1 2 5 South Texas 9 8 9 9 8 Mid-Continent 22 21 21 20 18 Alaska 6 7 7 6 5 Other U.S. 5 4 3 3 4 Total N.…
  31. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 31
    PXD Open Commodity Derivative Positions as of 5/2/2011 (includes PSE) Oil Q2 2011 Q3 2011 Q4 2011 2012 2013 2014 2015 Swaps WTI (BPD) 750 750 750 3,000 3,000 - - NYMEX WTI Price (/BBL) 77.25 77.25 77.25 79.32 81.02 - - Collars -…
  32. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 32
    PXD Open Commodity Derivative Positions as of 5/2/2011 (includes PSE) Gas Q2 2011 Q3 2011 Q4 2011 2012 2013 2014 2015 Swaps - (MMBTUPD) 117,500 117,500 117,500 105,000 67,500 50,000 - NYMEX Price (/MMBTU)1 6.13 6.13 6.13 5.82 6.11…
  33. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 33
    PSE Derivative Position as of 5/2/2011 Oil Q2 2011 Q3 2011 Q4 2011 2012 2013 2014 Swaps (BPD) 750 750 750 3,000 3,000 - NYMEX Price (/BBL) 77.25 77.25 77.25 79.32 81.02 - Collars (BPD) 2,000 2,000 2,000 - - - NYMEX Call Price (/BBL)…
  34. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 34
    Future Amortization of Deferred Gains - Discontinued Commodity Hedges1 ( Millions) Oil Gas NGL Total (Cash / Noncash) Total (Cash / Noncash) Total (Cash / Noncash) 2nd Qtr 2011 9 [9 / -] - - 3rd Qtr 2011 9 [9 / -] - - 4th Qtr…
  35. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 35
    VPP Expirations By the end of 2012, the entire VPP commitment will expire and provide a 4 MBOEPD increase in production with no capital requirement MBOEPD 4 4 VPP Oil Obligation 2011 2012 2013 Schedule of Oil VPP Volumes…
  36. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 36
    Impact of Volumetric Production Payments (VPP) Amortization of VPP Deferred Revenue & Other Comprehensive Income1 ( Million) Q1 Q2 Q3 Q4 Total Gas / Oil Gas / Oil Gas / Oil Gas / Oil Gas / Oil 2005 11 / - 19 / - 21 / - 20 / - 71 /…
  37. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 37
    Oil Differentials (per BBL)1 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 NYMEX calendar month average 78.71 78.04 76.20 85.18 94.10 NYMEX differential excluding VPPs and derivatives U.S. (5.11) (5.51) (5.90) (5.28) (4.93) South Africa2 (1.13)…
  38. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 38
    NGL Differentials (per BBL)1 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 NYMEX oil calendar month average 78.71 78.04 76.20 85.18 94.10 NYMEX differential excluding derivatives (37.94) (44.68) (42.71) (44.15) (51.93) Realized prices excluding…
  39. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 39
    Gas Differentials (per MCF)1 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 NYMEX bid week average 5.30 4.09 4.38 3.80 4.11 NYMEX differential excluding derivatives U.S. (0.17) (0.25) (0.35) (0.23) (0.23) South Africa2 1.01 2.02 1.96 2.24 3.62…
  40. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 40
    Other Costs1 General & Administrative Costs Interest Costs Millions Millions 48 44 45 45 45 45 43 43 40 38 8 8 9 Noncash 7 7 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2010 2010 2010 2011 2010 2010 2010 2010 2011 1) All periods…
  41. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 41
    Exploration & Abandonments Millions Drilling & Acreage Acreage and Other 2 Geological & Geophysical U.S. Resource Plays 6 Personnel & Other 10 16 1st Quarter 2011 Total 18 42
  42. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 42
    Income Taxes Quarter Ended March 31, 2011 ( Millions) U. S. S. Africa Total Current tax provision 3 6 9 Deferred tax benefit (52) (4) (56) Tax provision (benefit) (49) 2 (47) 43
  43. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 43
    Supplemental Non-GAAP Financial Measures EBITDAX and discretionary cash flow (DCF) are disclosed by Pioneer, and reconciled to the generally accepted accounting principle (GAAP) measures of net income and net cash provided by operating…
  44. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 44
    Supplemental Non-GAAP Financial Measures Adjusted income excluding unrealized MTM derivative losses and adjusted income excluding unrealized MTM derivative losses and unusual items, as presented in the Highlights slide and as presented…
  45. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 45
    Supplemental Earnings Per Share Information The Company uses the two-class method of calculating basic and diluted earnings per share. Under the two-class method of calculating earnings per share, GAAP provides that share- and…
  46. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 46
    VPP Adjusted Production Costs1 Pioneer presents VPP-Adjusted Production Costs (per BOE) to assist investors in considering the Companys costs in relation to the total BOEs (reported sales volumes plus VPP delivered volumes) in…
  47. Q1 2011 Earnings Call – Pioneer Natural Resources Co. – slide 47
    Certain Reserve Information Cautionary Note to U.S. Investors --The U.S. Securities and Exchange Commission (the SEC) prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other…

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