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Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · May 3, 2012 · 41 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 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 1
    First Quarter 2012 Earnings May 3, 2012
  2. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 2
    Highlights Q1 2012 adjusted income1 of 153 MM, or 1.23 per adjusted share1 Q1 2012 production: 147 MBOEPD2 +10 MBOEPD (+7%)2 vs. Q4 2011, primarily related to production growth in Spraberry, Eagle Ford Shale and Barnett Shale Combo…
  3. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 3
    Production Growth Targets MBOEPD 148 153 MBOEPD FY Guidance 147 120 104 46% 52% 58% 65% Liquids Liquids Liquids Liquids 1 1 1 2010 2011 Q1 Q2E-Q4E 2013E 2014E 2012 E 1) Reflects Tunisia and South Africa as…
  4. Q1 2012 EARNINGS CALL – 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 8.00 275 MM Horizontal Wolfcamp Shale…
  5. Q1 2012 EARNINGS CALL – 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. Q1 2012 EARNINGS CALL – 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. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 7
    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…
  8. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 8
    Horizontal Wolfcamp Shale Activity Ramping Up 400,000 acres potentially prospective Focused on holding acreage in southern 200,000 acres during 2012 and 2013 XBC Giddings Estate Currently targeting Wolfcamp B interval with First Two…
  9. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 9
    Spraberry Vertical Deeper Drilling Results 6,000 ft Strawn Results Upper Clear- Spraberry fork 81 vertical wells put on production during Q1 Production data continues to support 30 MBOE incremental EUR for wells completed in…
  10. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 10
    Spraberry Vertical Drilling Program 6,000 ft Upper Clear- 2012 Vertical Drilling Program Spraberry fork Currently running 40 vertical rigs; decreasing to 30 during 2H Spraberry Deepest Interval 2012 Blended Before…
  11. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 11
    Continuing to Successfully Grow Spraberry Production Spraberry Net Production1,2 (MBOEPD) 96 103 Benefited from 81 87 significant frac bank reduction (40 wells) 62 45 4 4 2011 Q1 Q2E - Q4E 2013E 2014E 690 vertical…
  12. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 12
    Eagle Ford Shale Operational Update Drilled 28 wells in Q1 2012; 26 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…
  13. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 13
    Successfully Growing Eagle Ford Shale Production Eagle Ford Shale Net Production1 47 53 (MBOEPD) 37 41 23 12 2011 Q1 Q2E - Q4E 2013E 2014E 2012 E 25 29 MBOEPD FY Guidance Rigs 12 Mid-Year 12 14 162 1) Reflects…
  14. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 14
    Barnett Shale Combo Operational Update Drilled 9 wells in Q1; 10 wells put on production Running 2 rigs Target gross well cost for 5,000 lateral: 3.5 MM Gross EUR: 460 MBOE (16% oil, 42% NGLs, 42% gas) 30% before-tax IRR1; impacted…
  15. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 15
    Successfully Growing Barnett Shale Combo Production Barnett Shale Net Production (MBOEPD) 18 23 12 16 6 4 2011 Q1 Q2E - Q4E 2013E 2014E 2012 E 7 9 MBOEPD FY Guidance Rigs 2 2 4 4 16
  16. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 16
    Alaska - Oooguruk Successful onshore appraisal well in the Torok interval (100% WI) PXD Acreage Initial Development IP rate of 2,000 BOPD (well now shut in Area awaiting permanent onshore production facilities) Island Drill…
  17. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 17
    Q1 2012 Earnings Summary Millions (After Tax) Per Share Net income attributable to common stockholders 215 1.68 Unrealized mark-to-market (MTM) derivative gains (32 MM before tax) (20) (0.16) Adjusted income excluding unrealized MTM…
  18. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 18
    Price Realizations1 Realized Prices (excludes VPPs and derivatives) 98.39 99.15 91.51 89.17 86.96 48.16 48.36 45.70 42.17 41.81 3.88 4.11 4.04 3.37 2.51 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q1…
  19. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 19
    Production Costs (per BOE)1 13.75 13.27 13.81 13.79 13.79 Workovers 0.81 1.03 0.77 0.68 0.69 Base LOE and production costs per BOE have remained relatively Production & 3.18 Ad Valorem Taxes 3.46 3.46 3.38 3.43 constant over the…
  20. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 20
    Q2 2012 Guidance1 Guidance Daily Production (MBOEPD) 149 154 Production Costs (/BOE) 13.25 15.25 Exploration & Abandonment ( MM) 25 - 50 Drilling and Acreage 25 Personnel and Seismic 25 DD&A (/BOE) 13.00 15.00 G&A ( MM) 55 60…
  21. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 21
    Liquidity Position (3/31/12)1 Net debt (net of cash balance of 317 MM): 2.3 B Unsecured Senior Credit Facility availability: 1.1 B Net Debt-to-Book Capitalization: 28% Maturities and Balances2 2011 2012 2013 2016 2017 2018 2020…
  22. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 22
    2012 Drilling Capital1 2012 capital program front end loaded: 2 Alaska exploration wells in Q1 (100% WI) 40 Spraberry vertical rigs in 1H; declining to 30 rigs during 2H Non-recurring Spraberry vertical frac bank reduction in Q1…
  23. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 23
    Production (MBOEPD)1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Spraberry 40 41 47 53 62 Raton 27 27 27 26 26 Eagle Ford Shale 5 8 14 20 23 South Texas 8 8 8 7 7 2 2 Mid-Continent 18 21 19 19 18 Barnett 2 3 4 6 6 Alaska 5 5 4 4 4…
  24. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 24
    Oil and Gas Revenue1 Millions 719 665 9 VPP Deferred Revenue 11 591 562 10 10 476 10 710 654 552 581 466 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 1) All periods presented have been restated to exclude discontinued operations…
  25. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 25
    PXD Open Commodity Derivative Positions as of 4/30/2012 (includes PSE) Oil Q2 2012 Q3 2012 Q4 2012 2013 2014 2015 Swaps WTI (BPD) 3,000 3,000 3,000 3,000 - - NYMEX WTI Price (/BBL) 79.32 79.32 79.32 81.02 - - Collars - (BPD) 2,000…
  26. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 26
    PXD Open Commodity Derivative Positions as of 4/30/2012 (includes PSE) Gas Q2 2012 Q3 2012 Q4 2012 2013 2014 2015 Swaps - (MMBTUPD) 275,000 275,000 275,000 112,500 50,000 - NYMEX Price (/MMBTU)1 4.97 4.97 4.97 5.62 6.05 - Collars -…
  27. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 27
    PSE Derivative Position as of 4/30/2012 Oil Q2 2012 Q3 2012 Q4 2012 2013 2014 Swaps (BPD) 3,000 3,000 3,000 3,000 - NYMEX Price (/BBL) 79.32 79.32 79.32 81.02 - Three-Way Collars (BPD)1 1,000 1,500 1,500 1,750 5,000 NYMEX Call Price…
  28. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 28
    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…
  29. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 29
    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 /…
  30. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 30
    Oil Differentials (per BBL)1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 NYMEX calendar month average 94.10 102.56 89.76 94.06 102.93 NYMEX differential excluding VPPs and derivatives (4.93) (4.17) (2.80) (2.55) (3.78) Realized prices…
  31. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 31
    NGL Differentials (per BBL)1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 NYMEX oil calendar month average 94.10 102.56 89.76 94.06 102.93 NYMEX differential excluding derivatives (51.93) (54.40) (41.40) (48.36) (61.12) Realized prices excluding…
  32. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 32
    Gas Differentials (per MCF)1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 NYMEX bid week average 4.11 4.32 4.20 3.55 2.72 NYMEX differential excluding derivatives (0.23) (0.21) (0.16) (0.18) (0.21) Realized prices excluding derivatives 3.88…
  33. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 33
    General & Administrative Costs1 Q1 2012 G&A spending impacted by: Increased staffing Increased compensation associated with noncash share-based retention awards Performance-based compensation Timing of charitable contributions…
  34. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 34
    Interest Costs1 Millions 45 46 46 47 45 Q1 Q2 Q3 Q4 Q1 2011 2011 2011 2011 2012 1) All periods presented have been restated to exclude discontinued operations 36
  35. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 35
    Exploration & Abandonments Millions Drilling & Acreage Alaska 19 Acreage & Other 8 27 Geological & Geophysical Seismic 14 Personnel & Other 12 26 1st Quarter 2012 Total 53 37
  36. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 36
    Income Taxes Attributable to Continuing Operations Quarter Ended March 31, 2012 ( Millions) Current tax provision 12 Deferred tax provision 106 118 38
  37. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 37
    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…
  38. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 38
    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 unit-based…
  39. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 39
    Supplemental Non-GAAP Financial Measures Adjusted income excluding unrealized MTM derivative gains and adjusted income excluding unrealized MTM derivative gains, unusual items and the incremental share dilution attributable to convertible…
  40. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 40
    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…
  41. Q1 2012 EARNINGS CALL – Pioneer Natural Resources Co. – slide 41
    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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