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Q3 2010 Earnings Call – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Oct 27, 2010 · 46 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. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 1
    Third Quarter 2010 Earnings October 27, 2010
  2. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 2
    Highlights Q3 2010 adjusted income1 of 42 MM, or 0.35 per share Excludes net gain from unusual items of 7 MM after tax, or 0.06 per share Excludes unrealized mark-to-market derivative gains of 63 MM after tax, or 0.53 per share Q3…
  3. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 3
    Forecasting 15+% Compound Annual Production Growth For 2011 - 2013 Q4 2010 vs. Q4 2009 expected to grow 10+% Includes Eagle Ford Shale JV impact Based on drilling capital of 960 MM Forecasting 15+% compound annual production growth…
  4. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 4
    2010E Cash Flow and Capital Spending1 Currently expect 1.2 B of cash flow for 2010 Includes deepwater GOM refund: 150 MM Sensitivity to Commodity Prices ( MM) Excludes upfront cash from JV: 266 MM Drilling capital: 960 MM1…
  5. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 5
    Operating Cash Flow Expected to Double by 2013 Billions1 2.0 Additional Cash Flow From Deepwater GOM Refund 1.6 1.4 1.2 1.0 2010E 2011E 2012E 2013E 1) Based on October strip pricing and includes derivative positions as of…
  6. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 6
    Investment Highlights Large drilling inventory and resource potential with 75% liquids Accelerating oil-focused drilling in the Spraberry field Successful Eagle Ford Shale JV provides accelerated development of liquids-rich play…
  7. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 7
    Spraberry Production Exceeding Forecast Q3 2010 net production: 35 MBOEPD +7% vs. Q2 2010 Exceeded forecast by 1.5 MBOEPD 2010 drilling program (on schedule) Expect to drill 440 wells during 2010 306 wells drilled through September…
  8. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 8
    Spraberry Wells Drilled in 2010 With At Least 5 Months of Production* 90 80 30+% Increase in Cumulative Gross Production Per Well (BOEPD) Production During First Five Months 70 60 50 2010 New Well 40 Performance…
  9. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 9
    Utilizing Vertical Integration to Control Spraberry Well Costs Expanding frac fleet ownership Two frac fleets currently operating Contracted for 2 additional frac fleets with delivery expected during Q1 and Q2 2011 Increasing frac…
  10. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 10
    Increasing to 40 Rigs by 2012 Accelerating Spraberry Development Spraberry Net Production1 (MBOEPD) Exceeded forecast by 60 - 66 1.5 MBOEPD 48 - 54 36 38 - 44 35 34 31 32 +2% vs. +4% vs. +7% vs. Q4 2009 Q1 2010 Q2 2010…
  11. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 11
    Eagle Ford Shale Operational Update 6 wells currently producing 8 wells completed and awaiting central gathering plant construction; expect to be online later in Q4 8 wells awaiting completion Running 7 rigs Drilling days reduced…
  12. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 12
    Continuing to Deliver Strong Initial Production Rates 8 wells tested from June October Average IP of 2 MBOEPD 24-hour restricted flow tests Average condensate yield: 120 Bbl / MMCF Average 55% liquids Average flowing tubing…
  13. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 13
    Significant Eagle Ford Shale Production Ramp-up Eagle Ford Net Production1 (MBOEPD) Midstream YE exit rate RIL JV connections 5 MBOEPD 32 - 41 effective June 1st began 19 - 24 10 13 3-4 1 2 1 Q1 Q2 Q3 Q4E 2011E 2012E…
  14. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 14
    Barnett Shale Combo Play Initiating Drilling Current acreage: 48 M net acres 77% net revenue interest Barnett Shale Liquids-Rich Area Locations on 100-acre spacing: 500 Continuing to grow leasehold position Acquired 70 square miles…
  15. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 15
    Tunisia Oil Drilling Success Drilled 3 successful operated wells during Q2 and Q3 2010 2 in Cherouq and 1 in Anaguid Anaguid well was first TUNISIA1 significant successful Silurian discovery in this concession Tested at gross…
  16. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 16
    Q3 2010 Earnings Summary Millions Per Diluted (After Tax) Share Net income attributable to common stockholders 112 0.94 Unrealized mark-to-market (MTM) derivative gains (94 MM before tax) (63) (0.53) Adjusted income excluding…
  17. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 17
    Price Realizations Realized Prices (excludes VPPs and derivatives) 72.46 73.78 73.71 71.21 62.27 40.77 36.16 33.36 33.49 5.28 31.75 4.11 4.07 4.28 3.22 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q3…
  18. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 18
    Production Costs (per BOE) 13.03 11.88 1.04 11.43 11.60 11.35 0.65 Q3 10 vs. Q2 10: Up 1.15/BOE 0.63 0.87 0.98 3.14 Increase primarily due to: Workovers 2.46 1.92 Production & 2.71 2.63 Production tax refunds received in the…
  19. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 19
    Q4 2010 Guidance1 Guidance Daily Production (MBOEPD) 115 - 120 Production Costs (/BOE) 11.75 13.75 Exploration & Abandonment ( MM) 35 45 Drilling and Acreage 30 Seismic Activity and Personnel 15 DD&A (/BOE) 14.25 15.50 G&A (…
  20. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 20
    Supplemental Information Supplemental Information Slides Slide Cash Flow Charts for 2011, 2012 & 2013 22 - 24 Liquidity Position 25 2010 Capital Spending 26 Oil and Gas Revenue 27 Prices Including Derivative & VPP Deferred Revenue…
  21. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 21
    2011E 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 55.00 60.00 65.00 70.00 75.00 80.00 85.00 90.00 95.00 100.00 NYMEX Oil Price…
  22. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 22
    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 55.00 60.00 65.00 70.00 75.00 80.00 85.00 90.00 95.00 100.00 NYMEX Oil Price…
  23. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 23
    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 55.00 60.00 65.00 70.00 75.00 80.00 85.00 90.00 95.00 100.00 NYMEX Oil Price…
  24. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 24
    Liquidity Position (9/30/10)1 Net debt (net of cash balance of 78 MM): 2.4 B Unsecured Senior Credit Facility availability: 1.4 B Net Debt-to-Book Capitalization: 37% Maturities and Balances2 2010 2011 2012 2013 2016 2017 2018 2020…
  25. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 25
    2010 Capital Spending ( Millions)1 328 86 261 17 Acreage 200 43 242 244 Drilling 157 Q1 2010 Q2 2010 Q3 2010 1) Excludes asset retirement obligations (ARO), capitalized interest and G&G G&A 26
  26. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 26
    Oil and Gas Revenue Millions 508 461 22 462 471 VPP Deferred 410 36 22 22 Revenue 37 373 425 486 440 449 Q3 Q4 Q1 Q2 Q3 2009 2009 2010 2010 2010 27
  27. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 27
    Prices Including Derivatives & VPP Deferred Revenue1 88.16 88.74 87.71 84.71 7.84 7.46 VPP Deferred 78.20 8.47 7.31 Revenue 8.24 41.82 37.54 34.40 34.46 33.13 5.30 4.56 4.10 4.31 3.64 .40 .35 VPP Deferred Revenue;…
  28. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 28
    Production (MBOEPD) Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Spraberry 30 31 31 32 35 Raton 31 30 29 28 28 Eagle Ford Shale - - 1 2 1 South Texas 11 10 9 8 9 Mid-Continent 18 17 22 21 21 Alaska 6 6 6 7 7 Other U.S. 5 4 5 4 3 Total N.…
  29. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 29
    PXD Open Commodity Derivative Positions as of 10/25/2010 (includes PSE) Oil Q4 2010 2011 2012 2013 Swaps WTI (BPD) 2,500 750 3,000 3,000 NYMEX WTI Price (/BBL) 93.34 77.25 79.32 81.02 Collars - (BPD) - 2,000 - - NYMEX Call Price…
  30. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 30
    PXD Open Commodity Derivative Positions as of 10/25/2010 (includes PSE) Gas Q4 2010 2011 2012 2013 Swaps - (MMBTUPD) 167,500 117,500 105,000 67,500 NYMEX Price (/MMBTU)1 6.26 6.13 5.82 6.11 Collars - (MMBTUPD) 40,000 - 65,000…
  31. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 31
    PSE Derivative Position as of 10/25/2010 Oil Q4 2010 2011 2012 2013 Swaps (BPD) 2,500 750 3,000 3,000 NYMEX Price (/BBL) 93.34 77.25 79.32 81.02 Collars (BPD) - 2,000 - - NYMEX Call Price (/BBL) - 170.00 - - NYMEX Put Price (/BBL)…
  32. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 32
    Future Amortization of Deferred Gains - Discontinued and Terminated Commodity Hedges1 ( Millions) Oil Gas NGL Total (Cash / Noncash) Total (Cash / Noncash) Total (Cash / Noncash) 1st Qtr 2010 20 [3 / 17] 1 [1 / -] 2 [2 / -] 2nd…
  33. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 33
    Impact of Volumetric Production Payments (VPP) Schedule of Oil VPP Volumes (MMBBLS) Q1 Q2 Q3 Q4 Total 2010 0.6 0.6 0.6 0.7 2.5 2011 0.3 0.3 0.4 0.4 1.4 2012 0.3 0.3 0.3 0.3 1.2 34
  34. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 34
    VPP Expirations By the end of 2012, the entire VPP commitment will expire and provide a 7 MBOEPD increase in production with no capital requirement MBOEPD 10 5 7 4 4 VPP Oil Obligation 2010 2011 2012 2013 35
  35. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 35
    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 /…
  36. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 36
    Oil Differentials (per BBL) Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 NYMEX calendar month average 68.30 76.19 78.71 78.04 76.20 NYMEX differential excluding VPPs and derivatives U.S. (7.11) (4.16) (5.11) (5.51) (5.90) South Africa1 2.00 1.14…
  37. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 37
    NGL Differentials (per BBL) Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 NYMEX oil calendar month average 68.30 76.19 78.71 78.04 76.20 NYMEX differential excluding derivatives (36.55) (40.03) (37.94) (44.68) (42.71) Realized prices excluding…
  38. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 38
    Gas Differentials (per MCF) Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 NYMEX bid week average 3.39 4.17 5.30 4.09 4.38 NYMEX differential excluding VPPs and derivatives U.S. (0.44) (0.14) (0.17) (0.25) (0.35) South Africa1 2.54 2.10 1.01 2.02…
  39. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 39
    Other Costs General & Administrative Costs Interest Costs Millions Millions 48 45 45 45 45 42 43 41 38 8 Noncash 35 7 7 6 7 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2009 2009 2010 2010 2010 2009 2009 2010 2010 2010 40
  40. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 40
    Exploration & Abandonments Millions Drilling & Acreage Acreage and Other 9 Geological & Geophysical U.S. Resource Plays 2 Tunisia 1 Personnel & Other 11 14 3rd Quarter 2010 Total 23 41
  41. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 41
    Income Taxes Quarter Ended September 30, 2010 ( Millions) U. S. S. Africa Tunisia Total Current taxes 3 10 6 19 Deferred taxes 73 (10) (5) 58 Tax provision 76 - 1 77 42
  42. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 42
    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…
  43. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 43
    Supplemental Non-GAAP Financial Measures Adjusted income excluding unrealized MTM derivative gains and adjusted income excluding unrealized MTM derivative gains and unusual items, as presented in the Highlights slide and as presented in…
  44. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 44
    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…
  45. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 45
    VPP Adjusted Production Costs 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…
  46. Q3 2010 Earnings Call – Pioneer Natural Resources Co. – slide 46
    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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