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HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Mar 27, 2012 · 51 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. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 1
    Howard Weil Energy Conference March 27, 2012
  2. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 2
    Investment Highlights U.S. asset base Oil exposure from proved reserves + estimated resource potential of 5 BBOE and 30,000 drilling locations 3rd largest driller in the U.S. with 2012 drilling program focused in four liquids and…
  3. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 3
    Production Growth Targets MBOEPD 148 - 153 137 124 114 107 49% 56% 65% Liquids Liquids Liquids Q1 Q2 Q3 Q4 2012E 2013E 2014E 2011 120 MBOEPD Average Up 16% vs. 2010 Tunisia and South Africa reflected as…
  4. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 4
    2012E Capital Spending and Cash Flow1 Capital program includes: Drilling capital: 2.4 B 1,525 MM Spraberry Vertical Sensitivity to Commodity Prices ( MM) Includes 100 MM for infrastructure 6.00 275 MM Horizontal Wolfcamp Shale…
  5. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 5
    Substantial Operating Cash Flow Growth1 Billions 3.3 2.8 2.2 1.5 80% Revenue 90% Revenue From Liquids From Liquids 2011 2012E 2013E 2014E 1) Based on commodity prices of 100/bbl oil and 3/mcf gas for 2012 and 100/bbl…
  6. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 6
    Significant Proved Reserves and Resource Potential1 Proved Reserves + Estimated Resource Potential of 5 BBOE and 30,000 drilling locations 12/31/11 Proved Reserves: 1.1 BBOE2 Additional Net Resource Potential: 4.2 BBOE Eagle Ford…
  7. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 7
    PXD Largest Spraberry Acreage Holder, Driller and Producer PXD leasehold represents 50% of PXD Acreage (900,000 Acres; total Spraberry acreage 75% HBP) Spraberry Field 75% of PXD leasehold held by production 7,000 operated…
  8. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 8
    Industry Increasing Horizontal Wolfcamp Shale Activity Average Drilling Rigs Average Lateral Length (Feet) (All Companies) 23 rigs currently (Pioneer, EOG, Approach) 7,400 19 4,700 5 Q4 2010 Q4 2011 Q4 2010 Q4 2011…
  9. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 9
    PXDs Horizontal Wolfcamp Shale Target Intervals Wolfcamp A and B intervals are primary Dean targets Highest OOIP among Wolfcamp intervals over Wolfcamp A (Upper Wolfcamp) PXD acreage Currently focusing on Wolfcamp B Wolfcamp B…
  10. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 10
    First Two Successful Horizontal Wolfcamp Shale Wells Performing Above Expectations 150-day cumulative production of 65 MBOE for first Upton County well 90-day average natural flow rates similar for first two Upton County wells Both…
  11. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 11
    PXDs Acreage Has Significant Horizontal Wolfcamp Shale Potential 400,000 acres potentially prospective for horizontal Wolfcamp PXD Giddings Estate 2041H & 2073H Industry 700+ BOEPD IPs 800+ BOEPD IPs Shale (Upper/Middle Wolfcamp…
  12. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 12
    PXDs Horizontal Wolfcamp Shale Drilling Plan 2012 2013 Drilling Plan PXD currently focused on 200,000 acres in XBC Giddings Estate the southern part of the field (Upper/Middle First Two Wells Wolfcamp interval) Additional 200,000…
  13. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 13
    Spraberry Vertical Deeper Drilling Results 6,000 ft Upper Clear- Spraberry fork 2011 Strawn Results 246 vertical wells completed in the Strawn interval during 2011 25+% increase in cumulative production during first 12 months…
  14. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 14
    Spraberry Vertical Drilling Program 6,000 ft Upper Clear- Spraberry fork 2012 Vertical Drilling Program (750 Wells) Deepest Interval Current Blended Before Tax % of Program Completed Well Cost (MM) IRR1 Spraberry…
  15. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 15
    Continuing to Successfully Grow Spraberry Production Spraberry Net Production1 (MBOEPD) Assumes 41 vertical rigs in Q1 declining to 30 rigs by YE 96 103 and 3 horizontal rigs in Q1 increasing to 7 rigs by YE3 81 87 (750 vertical…
  16. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 16
    Eagle Ford Shale Operational Update Drilled 111 wells in 2011; 92 wells put on production Running 12 rigs Current gross well cost: 7 MM - 8 MM 2012 drilling program before-tax IRR1 70%; impacted by low gas prices 2012 drilling…
  17. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 17
    Successfully Growing Eagle Ford Shale Production Eagle Ford Net Production1 (MBOEPD) 47 53 37 41 25 29 20 14 8 5 2 2010 Q1 Q2 Q3 Q4 2012E 2013E 2014E 2011 12 MBOEPD (drilled 111 wells) Rigs 7 YE 12 Mid-Year 12 14…
  18. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 18
    Barnett Shale Combo Operational Update Drilled 43 wells in 2011; 42 wells put on production Running 2 rigs Target gross well cost for 5,000 lateral: 3.5 MM (increase from 2011 reflecting longer lateral length) Gross EUR: 460 MBOE…
  19. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 19
    Successfully Growing Barnett Shale Combo Production Barnett Shale Net Production1 (MBOEPD) 18 23 12 16 79 6 4 3 2 3 2010 Q1 Q2 Q3 Q4 2012E 2013E 2014E 2011 4 MBOEPD (drilled 43 wells) Rigs 1 YE 2 2 4 4 1) 2010…
  20. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 20
    Pioneers Vertical Integration Improves Returns and Enhances Execution Drilling, Pressure Pumping and Well Service Equipment Spraberry Eagle Ford Shale Barnett Shale Combo 5 frac fleets (20,000 HP each) 2 frac fleets 1 frac fleet…
  21. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 21
    Sand Mine Purchase Summary PXD acquiring Carmeuse Industrial Sands (CIS) for 297 MM, before normal closing adjustments Key asset is Brady, TX mine, largest source of Hickory frac sand (Brady Brown) in the U.S. for industry and…
  22. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 22
    Why Invest In PXD Significant Upside Potential From: Oil exposure from proved reserves + estimated resource potential of 5 BBOE and 30,000 drilling locations Aggressive Spraberry & Eagle Ford Shale drilling program Extensive…
  23. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 23
    Appendix 24
  24. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 24
    Pioneer Operations North Slope Raton Hugoton Barnett Shale Combo West Panhandle Spraberry Vertical Horizontal Wolfcamp Shale Eagle Ford Shale Operating Areas 25
  25. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 25
    Spraberry 20-Acre Vertical Well Update 20-Acre Drilling (13,500 locations) Drilled 18 wells in 2010 and 16 wells in 2011 Most wells drilled to the Lower Wolfcamp with a few drilled to the Strawn Results to date indicate…
  26. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 26
    Early Results of Spraberry Waterflood Encouraging 600 Water injection 7,000-acre project in Spraberry begins 12 injectors and 110 producers Injecting 4,100 BWPD 6 - 7 MM capital cost 500 LOE savings from water handling 400…
  27. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 27
    140 MBOE Spraberry 40-Acre Vertical Well Type Curve 90 Deeper drilling in Spraberry increasing EURs 80 Gross Production Per Well (BOEPD) 70 60 50 140 MBOE Spraberry/Dean/Full Wolfcamp 40 (70% oil, 20% NGLs, 10% gas)…
  28. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 28
    Growing Midstream Infrastructure to Support Production Growth Gas Processing Pipeline NGL Takeaway Midkiff / Benedum to Mont Belvieu Current capacity: 260 MMCFD1 PXD production makes up 40% Chaparral & West Texas of throughput…
  29. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 29
    Eagle Ford Shale: A Burgeoning Liquids-Rich Shale Play Gross resource potential of play: 25 BBOE (150 TCFE)1 Estimated gross production of 3.5 MMBOEPD by 20202 200 rigs currently running in the play Oil Window PXD Acreage…
  30. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 30
    Eagle Ford Shale Resource Breakdown Lean Condensate Rich Condensate Dry Gas 45% of Acreage 35% of Acreage 20% of Acreage (60 BBL/MMSCF) (200 BBL/MMSCF) 20% 20% 30% Condensate NGL* NGL* 50% 100% Condensate Gas 50% 30% Gas…
  31. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 31
    Alaska - Oooguruk PXD Acreage Initial 1-rig drilling program continues Development Area targeting Kuparuk and Nuiqsut Island Drill Site intervals Ivishak Area Second rig to test Torok zone and a Ivishak Drill Site deeper…
  32. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 32
    PXD Proppant Requirements 70% to 80% Brown Sand Projected Proppant Requirements (M Tons) 1,600 1,530 1,480 1,160 Eagle Ford Shale Ceramic 1,140 1,140 1,140 Eagle Ford Shale White Sand Horizontal Wolfcamp White Brown Sand…
  33. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 33
    2013 PXD Proppant Sources Pre-CIS Acquisition White Sand 60% of PXDs (170 M tons) forecasted 2013 brown sand requirements Ceramics (170 M tons) CIS Sourced Brown Sand (705 M tons) 1) Requirement reflects conversion from…
  34. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 34
    Brady Mine Provides Significant Logistical Advantage PXDs alternative Sand Supply Sources: 1,200 miles away Permian Spraberry Vertical Barnett Shale Combo Horizontal Wolfcamp Shale 225 miles away 190 miles away Brady…
  35. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 35
    CIS Acquisition Economics Annual Savings vs. Total Annual PXD Alternative to CIS Acquisition Volume Alternative Savings (M tons) (/ton) (MM) Replacing current brown sand supply at 8401 40 34 market price Substituting 2013…
  36. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 36
    CIS Acquisition Secures 30+ Years of Proved Reserves Annual Sales Resource (MM tons) Capacity Proved Resource Proved Resource Location (M tons) Reserves 1 Potential2 R/P R/P Brady, TX 1,000 36 33 36 69 Wisconsin 1,000 23 - 23 23…
  37. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 37
    Strong 2011 Reserve Additions1 Added 148 MMBOE from the drillbit, or 313% of full- year production, at F&D cost of 13.83 per BOE Reflects significant drilling campaigns in Spraberry, Eagle Ford Shale and Barnett Shale Combo plays…
  38. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 38
    Production (MBOEPD)1 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Spraberry 38 40 41 47 53 Raton 28 27 27 27 26 Eagle Ford Shale 2 5 8 14 20 South Texas 9 8 8 8 7 2 2 Mid-Continent 20 18 21 19 19 Barnett 2 2 3 4 6 Alaska 6 5 5 4 4…
  39. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 39
    PXD Production By Commodity By Area1 1) All periods presented have been restated to exclude discontinued operations 40
  40. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 40
    Liquidity Position (12/31/11)1 Net debt (net of cash balance of 537 MM): 2.0 B Unsecured Senior Credit Facility availability: 1.2 B Net Debt-to-Book Capitalization: 26% Maturities and Balances2 2011 2012 2013 2016 2017 2018 2020…
  41. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 41
    Production Costs (per BOE)1 13.75 13.27 13.81 13.79 0.81 1.03 0.77 0.68 Q4 11 vs. Q3 11 essentially flat 11.60 Workovers 3.18 Third party transportation increased 0.77 3.46 3.38 3.46 0.46 primarily due to higher Eagle Ford…
  42. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 42
    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…
  43. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 43
    PXD Cash Costs vs. Peers For First 9 Months of 2011 9 Months 2011 Cash Costs ( / BOE)1 23.51 20.95 3.42 Interest 4.06 16.51 4.39 G&A 4.12 3.11 4.06 15.70 Prod Costs 12.77 9.34 2 3 PXD VPP-Adjusted ISI Gas-Focused ISI…
  44. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 44
    PXD Open Commodity Derivative Positions as of 3/21/2012 (includes PSE) Oil Q1 2012 Q2 2012 Q3 2012 Q4 2012 2013 2014 2015 Swaps WTI (BPD) 3,000 3,000 3,000 3,000 3,000 - - NYMEX WTI Price (/BBL) 79.32 79.32 79.32 79.32 81.02 - -…
  45. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 45
    PXD Open Commodity Derivative Positions as of 3/21/2012 (includes PSE) Gas Q1 2012 Q2 2012 Q3 2012 Q4 2012 2013 2014 2015 Swaps - (MMBTUPD) 186,374 275,000 275,000 275,000 112,500 50,000 - NYMEX Price (/MMBTU)1 5.29 4.97 4.97 4.97…
  46. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 46
    PSE Derivative Position as of 3/21/2012 Oil Q1 2012 Q2 2012 Q3 2012 Q4 2012 2013 2014 Swaps (BPD) 3,000 3,000 3,000 3,000 3,000 - NYMEX Price (/BBL) 79.32 79.32 79.32 79.32 81.02 - Three-Way Collars (BPD)1 1,000 1,000 1,500 1,500…
  47. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 47
    Three-Way Collars (75 by 90 by 135 example) Unhedged realization Hedged realization 160.00 NYMEX Price 150.00 Potential 140.00 Opportunity Loss Realized Price 130.00 Realized Price (/BBL) Short put at 75/BBL Long put at…
  48. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 48
    VPP Expirations At the end of 2012, the VPP commitment will expire and provide 3.5 MBOPD increase in production MBOPD 3.5 VPP Oil Obligation 2012 2013 Schedule of Oil VPP Volumes (MMBBLS) Q1 Q2 Q3 Q4 Total 2012 0.3 0.3…
  49. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 49
    Oil/Gas Ratio Trending Up Since 2006 Oil/Gas ratio has increased from 5:1 in 2006 to 25:1 recently Oil Price Oil/Gas Ratio Gas Price 50
  50. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 50
    Cautionary Note Regarding Estimates of Sand Resources Inaccuracies in estimates of mineral reserves and resource deposits could result in lower than expected supplies and sales and higher than expected costs. The estimates of proved…
  51. HOWARD WEIL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 51
    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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