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Q3 2011 Earnings Call – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Nov 2, 2011 · 42 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 2011 Earnings Call – Pioneer Natural Resources Co. – slide 1
    Third Quarter 2011 Earnings November 2, 2011
  2. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 2
    Highlights Q3 2011 adjusted income1 of 160 MM, or 1.35 per diluted share Excludes unrealized mark-to-market derivative gain of 191 MM after tax, or 1.60 per diluted share Q3 2011 production: 128 MBOEPD +9 MBOEPD (+8%) vs. Q2 2011…
  3. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 3
    Targeting 18+% Compound Annual Production Growth For 2011 2014 Expect full-year 2011 production of 125 MBOEPD1 (up 15% vs. 2010) Towards low end of FY guidance of 125 130 MBOEPD as previously indicated Unplanned South Africa GTL…
  4. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 4
    Successful Horizontal Wolfcamp Shale Well XBC Giddings Estate 2041H First horizontal Wolfcamp Shale well in Upton Jo Mill County Lower Peak 7-day average natural flow rate of 732 BOEPD1 Spraberry (591 BOPD + 86 BNGLPD + 332 MCFD)…
  5. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 5
    Horizontal Wolfcamp Shale Play Showing Significant Success PXD and industry well results coupled with PXD geologic PXD Giddings Estate 2041H interpretation suggest significant 854 BOEPD peak rate Industry 700+ BOEPD IPs horizontal…
  6. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 6
    Investment Highlights 2011 accelerated drilling program focused in the liquids-rich Spraberry, Eagle Ford Shale and Barnett Shale Combo plays Funded from cash flow and redeployment of Tunisia sale proceeds 20,000 drilling locations…
  7. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 7
    PXD Largest Spraberry Acreage Holder, Driller and Producer Spraberry Field Gross Production by Operator 20,000+ Vertical Drilling Locations 47 (MBOED)1 26 19 15 8 8 5 5 4 4 PXD Acreage (900,000 Acres; 75% HBP) Spraberry…
  8. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 8
    Deeper Drilling in Spraberry Increasing EURs (Intervals Below Wolfcamp) 6,000 ft Upper Clear- Spraberry fork Current Spraberry 40-acre type curve EUR including Lower Wolfcamp: 140 MBOE Q3 Deeper Drilling Results Q3 Results…
  9. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 9
    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…
  10. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 10
    Continuing to Accelerate Spraberry Development Spraberry Net Production1 (MBOEPD) 77 84 68 74 Currently 51 MBOEPD 54 59 51 53 47 40 41 34 2010 Q1 Q2 Q3 Q4E 2012E 2013E 2014E 2011E Production forecasts exclude potential…
  11. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 11
    Eagle Ford Shale Operational Update Running 12 rigs Current gross well cost: 7 MM - 8 MM Before tax IRRs1: 80% for rich condensate and 60% for lean condensate (excludes carry benefit) Average lateral length 5,500 feet with 13-stage…
  12. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 12
    Strong Eagle Ford Shale Well Performance Continues in Q31 Dewitt County BOPD BNGLPD MMCFPD Schorlemer 1H 938 619 4.7 Boldt 1H 901 617 4.7 Schroeder 1H 957 643 4.9 Kleine 1H 639 653 5.7 Straube 1H 1,020 675 5.1 Matejek 1H 1,554…
  13. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 13
    Ramping Up Eagle Ford Shale Development Eagle Ford Net Production (MBOEPD) 54 60 40 45 Currently 20 MBOEPD 26 30 20 23 14 8 5 2 2010 Q1 Q2 Q3 Q4E 2012E 2013E 2014E 2011E (expect to be within 12 - 15 MBOEPD FY…
  14. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 14
    Strong Barnett Shale Combo Well Performance Continues in Q31,2 Current acreage: 76 M net acres 700 drilling locations BOPD BNGLPD MMCFPD Running 2 rigs Steadham A1H 261 122 0.8 Gross well cost: 3 MM Gross EUR: 320 MBOE BOPD BNGLPD…
  15. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 15
    Growing Barnett Shale Combo Production Barnett Shale Net Production1 (MBOEPD) 26 31 18 22 Currently 5 MBOEPD 9 12 57 4 3 2 3 2010 Q1 Q2 Q3 Q4E 2012E 2013E 2014E 2011E (expect to be within 4 - 5 MBOEPD FY guidance) 1)…
  16. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 16
    Pioneer is a Leader in the Two Most Active U.S. Plays 225 U.S. Rig Activity1 200 196 Pioneer Growth Areas 162 122 80 71 65 55 53 49 44 37 35 23 20 1) Source: ISI Group, Inc. 17
  17. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 17
    Q3 2011 Earnings Summary Millions Per Diluted (After Tax) Share Net income attributable to common stockholders 351 2.95 Unrealized mark-to-market (MTM) derivative gains (303 MM before tax) (191) (1.60) Adjusted income excluding…
  18. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 18
    Price Realizations1 Realized Prices (excludes VPPs and derivatives) 98.50 89.43 87.25 79.93 70.41 48.16 48.36 41.03 42.17 33.49 4.23 4.14 4.31 4.24 3.76 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3…
  19. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 19
    Production Costs (per BOE)1 13.27 13.31 12.82 13.47 0.75 Workovers 1.08 10.94 0.78 0.99 Q3 11 vs. Q2 11 Comparison Production & 0.73 3.32 3.28 Higher LOE primarily due to 3.27 3.32 Ad Valorem Taxes increased labor rates and Third…
  20. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 20
    Q4 2011 Guidance1 Guidance Daily Production (MBOEPD) 136 - 141 Production Costs (/BOE) 12.50 14.50 Exploration & Abandonment ( MM) 25 - 35 Drilling and Acreage 20 Seismic Activity and Personnel 15 DD&A (/BOE) 13.50 15.00 G&A (…
  21. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 21
    Supplemental Information Supplemental Information Slides Slide Liquidity Position 23 2011 Capital Spending and 2012 Operational Flexibility 24 Oil and Gas Revenue 25 Historic Production 26 Derivative Position 27 - 29 Future…
  22. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 22
    Liquidity Position (09/30/11)1 Net debt (net of cash balance of 211 MM): 2.4 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…
  23. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 23
    2012 Operational Flexibility in Lower Commodity Price Environment 2011 Capital Budget: 2.1 Billion1,2 Barnett Alaska 210 MM 100 MM Other 100 MM Eagle Ford Shale 120 MM Vertical Integration & Facilities Funded from operating cash…
  24. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 24
    Oil and Gas Revenue1 Millions 611 584 VPP Deferred 10 Revenue 10 497 472 10 437 22 22 574 601 450 487 415 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 1) All periods presented have been restated to exclude discontinued…
  25. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 25
    Production (MBOEPD)1 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Spraberry 35 38 40 41 47 Raton 28 28 27 27 27 Eagle Ford Shale 1 2 5 8 14 South Texas 9 9 8 8 8 2 2 Mid-Continent 21 20 18 21 19 Barnett 2 2 2 3 4 Alaska 7 6 5 5 4 Other U.S. 1…
  26. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 26
    PXD Open Commodity Derivative Positions as of 11/1/2011 (includes PSE) Oil Q4 2011 2012 2013 2014 2015 Swaps WTI (BPD) 750 3,000 3,000 - - NYMEX WTI Price (/BBL) 77.25 79.32 81.02 - - Collars - (BPD) 2,000 2,000 - - - NYMEX Call…
  27. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 27
    PXD Open Commodity Derivative Positions as of 11/1/2011 (includes PSE) Gas Q4 2011 2012 2013 2014 2015 Swaps - (MMBTUPD) 117,500 105,000 67,500 50,000 - NYMEX Price (/MMBTU)1 6.13 5.82 6.11 6.05 - Collars - (MMBTUPD) - 65,000…
  28. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 28
    PSE Derivative Position as of 11/1/2011 Oil Q4 2011 2012 2013 2014 Swaps (BPD) 750 3,000 3,000 - NYMEX Price (/BBL) 77.25 79.32 81.02 - Collars (BPD) 2,000 - - - NYMEX Call Price (/BBL) 170.00 - - - NYMEX Put Price (/BBL) 115.00 - -…
  29. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 29
    Future Amortization of Deferred Gains - Discontinued Commodity Hedges1 ( Millions) Oil Gas NGL Total (Cash / Noncash) Total (Cash / Noncash) Total (Cash / Noncash) 4th Qtr 2011 9 [9 / -] - - 1) Deferred gains will increase oil…
  30. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 30
    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…
  31. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 31
    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 /…
  32. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 32
    Oil Differentials (per BBL)1 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 NYMEX calendar month average 76.20 85.18 94.10 102.56 89.76 NYMEX differential excluding VPPs and derivatives U.S. (5.90) (5.28) (4.93) (4.17) (2.80) South Africa2 1.64…
  33. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 33
    NGL Differentials (per BBL)1 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 NYMEX oil calendar month average 76.20 85.18 94.10 102.56 89.76 NYMEX differential excluding derivatives (42.71) (44.15) (51.93) (54.40) (41.40) Realized prices excluding…
  34. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 34
    Gas Differentials (per MCF)1 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 NYMEX bid week average 4.38 3.80 4.11 4.32 4.20 NYMEX differential excluding derivatives U.S. (0.35) (0.23) (0.23) (0.21) (0.16) South Africa2 1.96 2.24 3.62 2.78 3.62…
  35. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 35
    Other Costs1 General & Administrative Costs Interest Costs Millions Millions 50 45 45 45 45 46 46 43 43 44 9 Noncash 8 9 8 10 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2010 2010 2011 2011 2011 2010 2010 2011 2011 2011 1) All periods…
  36. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 36
    Exploration & Abandonments Millions Drilling & Acreage Acreage and Other 2 Geological & Geophysical U.S. Resource Plays 7 Personnel & Other 11 18 3rd Quarter 2011 Total 20 37
  37. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 37
    Income Taxes Attributable to Continuing Operations Quarter Ended September 30, 2011 ( Millions) U. S. S. Africa Total Current tax provision 3 9 12 Deferred tax provision (benefit) 179 (6) 173 Tax provision 182 3 185 38
  38. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 38
    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…
  39. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 39
    Supplemental Non-GAAP Financial Measures Adjusted income excluding unrealized MTM derivative gains, as presented in the Q3 2011 Earnings Summary slide, is presented and reconciled to Pioneers net income attributable to common stockholders…
  40. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 40
    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…
  41. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 41
    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…
  42. Q3 2011 Earnings Call – Pioneer Natural Resources Co. – slide 42
    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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