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BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Nov 13, 2012 · 54 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. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 1
    Investor Presentation November 2012
  2. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 2
    Investment Highlights U.S. asset base High oil exposure from proved reserves + estimated net resource potential of 7 BBOE 2012 drilling program focused in three liquids and resource rich core assets in Texas Spraberry Vertical…
  3. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 3
    Strong Production Growth Continues in 20121 MBOEPD 160 MBOEPD including Barnett Shale 154 - 158 153 140 143 117 Strong drilling and well 101 performance in Spraberry vertical, horizontal Wolfcamp Shale and Eagle Ford Shale…
  4. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 4
    2012E Capital Spending and Cash Flow1 B Capital program includes: Drilling capital 2.5 Vertical integration 0.5 Sensitivity to Commodity Prices ( MM) Includes 100 MM for field facilities accelerated into 2012 3.0 NYMEX Gas…
  5. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 5
    Significant Proved Reserves and Resource Potential1 Proved Reserves + Estimated Net Resource Potential of 7 BBOE and 35,000 Drilling Locations 12/31/11 Proved Reserves: 1.1 BBOE2 Additional Net Resource Potential: 6.7 BBOE Spraberry…
  6. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 6
    Wolfcamp Shale JV Opportunity Offering 33% to 50% of Pioneers working interest in 200,000 acres in southern portion of Midland Basin Large, contiguous acreage position located in Upton, Reagan, Irion and Crockett counties Includes…
  7. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 7
    Horizontal Wolfcamp Shale Results Meeting Expectations 27 horizontal Wolfcamp wells drilled in southern 200,000 acres through Q3 17 wells on production, of which 10 were added in Q3 Of the 17 wells on production, 15 drilled in the…
  8. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 8
    Horizontal Wolfcamp Upper B Well Performance to Date1 Average daily production from Wolfcamp Upper B Wells unloading fracture stimulation fluid wells at or above 575 MBOE type curve Giddings 2041H: 135 MBOE 12-month cumulative…
  9. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 9
    PXD Has Multiple Horizontal Target Intervals Lower Upper Jo Mill D C B B A U. Spraberry Recently drilled 2 successful 2,500 lateral horizontal Jo Mill wells with M. Spraberry current 24-hour rates of 554 BOEPD and 308 BOEPD (80%…
  10. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 10
    Horizontal Wolfcamp Shale Drilling Activity Currently focused on holding 50,000 acres in southern part of play during 2012 and 2013 Expect to drill 90 wells by YE 2013 to hold acreage 27 wells of the 90 wells drilled to date 17 on…
  11. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 11
    Spraberry Vertical Deeper Drilling Continues to Drive Strong Performance 6,000 ft Upper Clear- Spraberry fork Deeper drilling accounts for 65% of 2012 vertical drilling program Commingled Potential Spraberry Average…
  12. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 12
    Continuing to Successfully Grow Spraberry Production Spraberry Net Production1 Top end of guidance range (MBOEPD) 66 67 63 67 MBOEPD Q3 production benefited by 1,800 BPD from FY Guidance partial NGL inventory drawdown at Mont…
  13. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 13
    Eagle Ford Shale Operational Update Drilled 38 wells in Q3 2012; 35 wells placed on production 2012 drilling program Expect to drill 125 wells as planned Continuing to focus on liquids-rich drilling with only 10% of the wells…
  14. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 14
    Drilling Efficiency Improving Average drilling cost per foot has decreased 18% and average drilling feet per day has increased 28% over the past 5 quarters 300 150 0 800 400 0 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012…
  15. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 15
    Pad Drilling Expected To Increase in 2013 Expected to reduce drilling and completion costs by 600 M to 700 M per well 80% 70% 30% 20% Single Well Multi-Well Pads Single Well Multi-Well Pads 9 Months 2012 2013 16
  16. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 16
    Example of Choke Management Effectiveness Cumulative Production Per Lateral Cum BOE/Lateral FT Foot 100.0 E.Roeder 03 Harlan Metting 12/64 Choke Riedesel Cumulative BOE Per Lateral Foot 22/64 Choke 16/64 Choke 10.0…
  17. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 17
    Eagle Ford Shale Continues to Set New Production Records Eagle Ford Shale Net Production1 (MBOEPD) 27 28 25 29 MBOEPD FY Guidance 32 - 35 Strong well performance continues 29 to drive production growth and 24 achieve record…
  18. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 18
    Barnett Shale Planned Divestiture 120,000 net acres Two-thirds of acreage located in the liquids- Combo Play Area 82,000 net acres rich Barnett Shale Combo Play Marble Falls & Barnett Development 79 producing wells 8,000 net…
  19. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 19
    Alaska Q3 net production: 4.5 MBOPD Nuiqsut Area 3 wells to be fracd 1-rig development program continues from island drill site Island Development from the Oooguruk island drill site Area targeting Nuiqsut and Torok intervals…
  20. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 20
    PXDs Vertical Integration Reduces Costs and Enhances Execution Spraberry Barnett Shale Combo Eagle Ford Shale 5 vertical frac fleets (20,000 HP each) 1 frac fleet 2 frac fleets 2 horizontal frac fleets (35,000 HP each) (30,000 HP)…
  21. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 21
    Why Invest In PXD Significant Upside Potential From: High oil exposure from proved reserves + estimated resource potential of 7 BBOE and 35,000 drilling locations Aggressive Spraberry & Eagle Ford Shale drilling program Extensive…
  22. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 22
    Appendix 23
  23. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 23
    Pioneer Operations North Slope Raton Hugoton Barnett Shale Combo West Panhandle Spraberry Vertical Horizontal Wolfcamp Shale Eagle Ford Shale Operating Areas 24
  24. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 24
    2012 Drilling Capital1 Millions Q4 Drilling Program 25 Spraberry vertical rigs 230 5 horizontal Wolfcamp Shale rigs 120 10 - 12 Eagle Ford Shale rigs 75 1 Barnett Shale Combo rig 25 2,540 1 Alaska rig 30 Total 480 742…
  25. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 25
    Liquidity Position (9/30/12)1 Net debt (net of cash balance of 334 MM): 3.2 B Unsecured Credit Facility availability: 0.9 B Net Debt-to-Book Capitalization: 36% Maturities and Balances2 2012 2013 2016 2017 2018 2020 2022 2028…
  26. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 26
    Derivative Philosophy Continue to use derivatives to mitigate commodity price exposure in order to insure funding for development programs and to maintain strong financial position Target 50% on rolling 3 year basis Continue to use a…
  27. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 27
    PXD Open Commodity Derivative Positions as of 10/30/2012 (includes PSE) Oil Q4 2012 2013 2014 2015 Swaps WTI (BPD) 11,000 3,000 - - NYMEX WTI Price (/BBL) 89.34 81.02 - - Collars - (BPD) 2,000 - - - NYMEX Call Price (/BBL) 127.00 -…
  28. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 28
    PXD Open Commodity Derivative Positions as of 10/30/2012 (includes PSE) Gas Q4 2012 2013 2014 2015 Swaps - (MMBTUPD) 275,000 162,500 105,000 - NYMEX Price (/MMBTU)1 4.97 5.13 4.03 - Collars - (MMBTUPD) 65,000 150,000 - - NYMEX Call…
  29. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 29
    PSE Derivative Position as of 10/30/2012 Oil Q4 2012 2013 2014 2015 Swaps (BPD) 3,000 3,000 - - NYMEX Price (/BBL) 79.32 81.02 - - Three-Way Collars (BPD)1 1,500 1,750 5,000 - NYMEX Call Price (/BBL) 109.00 116.00 124.00 - NYMEX…
  30. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 30
    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…
  31. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 31
    Geologic Provinces of the Permian Basin PEDERNAL UPLIFT & ROOSEVELT POSITIVE Spraberry Trend OZONA PLATFORM Basin DEVILS Basement RIVER Uplift UPLIFT Shelf Thrust Belt Permian Basin is composed of multiple…
  32. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 32
    Wolfcamp Facies & Depositional Model Platform Carbonate Land Platform Carbonate Shelf Edge Carbonate Pelagic Sediments Clastic Detrital Slope Sediments & Reef Talus Fluvial - Deltaic Silt Cloud in Suspension Carbonate Debris…
  33. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 33
    Wolfcamp Comparison to Other Plays Major Oil Shale Play Characteristics 2 3 1 Eagle Ford Barnett Shale 4 5 Attribute Units Wolfcamp Shale Niobrara Bakken (Oil Window) (Combo Play) Age Permian Cretaceous Mississippian Cretaceous…
  34. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 34
    PXD Has Multiple Horizontal Wolfcamp Shale Target Intervals PXD has an extensive Midland Basin geologic database: U. Spraberry Over 70,000 logs of which 9,000 are digital, M. Spraberry allow for excellent structural control and…
  35. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 35
    Southern Horizontal Wolfcamp Players Laredo PXD Apache Apache PXD EOG Devon El Paso COP El Paso BHP Approach Horizontal Wells Horizontal Permits
  36. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 36
    Horizontal Wolfcamp 960-Acre Development Block Up to 55 wells per 960-acre section (20-acre field rules) 960 41 vertical wells in Spraberry-Wolfcamp acres Up to 14 horizontal Wolfcamp wellbores 7 horizontal wells in Wolfcamp A 7…
  37. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 37
    Spraberry 20-Acre Vertical Well Update 20-Acre Drilling (13,500 locations) Drilled 39 wells to date Most wells drilled to the Lower Wolfcamp with a few drilled to the Strawn Results to date indicate production near type curve…
  38. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 38
    Spraberry Waterflood Continuing to Perform Original project: 7,000 acres in Spraberry Water injection 12 injectors and 110 producers in original begins project area Response now being observed outside original 700 project area; now…
  39. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 39
    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)…
  40. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 40
    Pioneers Permian Resource Potential Continues To Grow1 Drilling deeper vertical wells, capturing non-traditional shale/silt intervals and drilling horizontally into the Wolfcamp Shale has increased Pioneers Permian resource potential…
  41. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 41
    Permian Oil Production Transport Options Permian Basin Crude Takeaway Current Operator Destination Name Capacity Time Frame Plains Cushing Basin 450,000 Sunoco Nederland West Texas Gulf 400,000 Kinder Morgan El Paso Wink 100,000…
  42. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 42
    Growing Midstream Infrastructure to Support Production Growth Gas Processing Pipeline NGL Takeaway Midkiff / Benedum to Mont Belvieu Current capacity: 260 MMCFD1 Chaparral & West Texas PXD production makes up 40% Pipelines of…
  43. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 43
    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 270 rigs currently running in the play Oil Window PXD Acreage…
  44. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 44
    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…
  45. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 45
    Production (MBOEPD)1 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 2 3 Spraberry 47 53 62 64 69 Eagle Ford Shale 14 20 22 24 29 Raton 27 26 26 25 25 South Texas 8 7 7 6 6 Mid-Continent 19 19 18 18 18 Alaska 4 4 4 5 5 Other 1 2 1 1 1…
  46. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 46
    PXD Production By Commodity By Area1 1) All periods presented have been restated to exclude discontinued operations 47
  47. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 47
    Production Costs (per BOE)1 16.03 0.76 14.49 13.66 13.64 13.51 0.92 Q3 production cost increase vs. Q2 Workovers 0.79 0.69 0.68 3.48 primarily due to the following LOE 3.35 items: Production & 3.22 3.43 3.51 1.82 Ad Valorem…
  48. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 48
    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…
  49. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 49
    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 0.3…
  50. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 50
    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…
  51. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 51
    Premier Silica Provides 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…
  52. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 52
    Oil/Gas Ratio Trending Up Since 2006 Oil/Gas ratio has increased from 5:1 in 2006 to 30:1 recently Oil Price Oil/Gas Ratio Gas Price 53
  53. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 53
    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…
  54. BOFA MERRILL LYNCH'S GLOBAL ENERGY CONFERENCE – Pioneer Natural Resources Co. – slide 54
    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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