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CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Feb 10, 2011 · 39 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. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 1
    Credit Suisse 2011 Energy Summit February 10, 2011
  2. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 2
    Highlights Q4 2010 adjusted income1 of 59 MM, or 0.51 per diluted share Excludes net gain from unusual items of 106 MM after tax, or 0.87 per diluted share Excludes unrealized mark-to-market derivative losses of 85 MM after tax, or…
  3. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 3
    Increasing Compound Annual Production Growth For 2011 2013 to 18+% Achieved 10% production growth target from Q4 2009 to Q4 2010 (11% reflecting Tunisia as discontinued operations) Forecasting annual production growth of 15% to 19%…
  4. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 4
    Strong 2010 Reserve Additions1 Year-end 2010 proved reserves of 1,011 MMBOE Added 163 MMBOE, or 363% of full-year production, from successful drilling, improved performance, acquisitions and price revisions SEC Year-end 10 Included…
  5. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 5
    Strong 2010 F&D Performance Drillbit F&D of 9.96/BOE excluding price revisions Below targeted drillbit F&D cost of 10 - 15/BOE All-in F&D of 7.30/BOE including price revisions Reserve mix 97% U.S. 56% liquids / 44% gas 57% PD…
  6. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 6
    2011E Capital Spending and Cash Flow1,2 Capital program includes: Drilling capital: 1.6 B 1.1 B Spraberry Sensitivity to Commodity Prices ( MM) 110 MM Eagle Ford Shale (net of carry) 170 MM Barnett Shale Combo 115 MM Alaska…
  7. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 7
    Substantial Operating Cash Flow Growth1,2 Billions 2.3 Additional Cash Flow From Deepwater GOM 1.9 Refund and Insurance Recoveries 1.4 1.3 1.0 2010 2011E 2012E 2013E 1) Excludes operating cash flow for 2011 2013 from…
  8. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 8
    Continuing to Add Incremental Production from Lower Wolfcamp Drilling1 90 30+% increase in cumulative production during first nine months 80 Gross Production Per Well (BOEPD) 70 Added incremental production in 2010 from deeper…
  9. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 9
    New Spraberry 40-Acre Type Curve Deeper drilling to Lower Wolfcamp expected to add 30 MBOE to Spraberry well EURs Gross Production Per Well (BOEPD) 140 MBOE Spraberry/Dean/Full Wolfcamp (70% oil, 20% NGLs, 10% gas) 110…
  10. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 10
    Spraberry Project Updates Horizontal Drilling Drilling 2 horizontal Wolfcamp wells in Midland County 4,000 foot laterals with 15 stage completions First well drilled in middle Wolfcamp carbonate section Currently completing Second…
  11. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 11
    Utilizing Vertical Integration to Control Spraberry Well Costs Operating 12 Company-owned drilling rigs Expanding frac fleet ownership 3 frac fleets currently operating Ordered 2 additional frac fleets with delivery expected during…
  12. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 12
    Continuing to Accelerate Spraberry Development Spraberry Net Production1 (MBOEPD) Exceeded 66 - 70 Exceeded forecast by 60 - 66 2 MBOEPD 52 - 56 forecast by 48 - 54 1.5 MBOEPD 42 - 46 38 - 44 35 38 31 32 +2% vs. +4% vs.…
  13. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 13
    Eagle Ford Shale Operational Update Running 7 rigs Reducing drilling time and enhancing completion techniques Current gross well cost: 7 MM - 8 MM Before tax IRRs: 100% for high condensate yield and 50% for low condensate yield at…
  14. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 14
    Accelerating Eagle Ford Shale Development Eagle Ford Net Production (MBOEPD) 40 45 32 - 41 26 30 19 - 24 Midstream YE exit rate RIL JV connections 5 MBOEPD effective June 1st began 12 15 10 13 1 2 1 2 Q1 Q2 Q3 Q4 2011E…
  15. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 15
    Barnett Shale Combo Play Current acreage: 65 M net acres 600 drilling locations; 77% NRI Barnett Shale Liquids-Rich Area Continuing to grow leasehold position (42% gas, 42% NGLs, 16% oil) Acquired 110 square miles of Combo Play…
  16. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 16
    Investment Highlights 20,000 liquids-rich drilling locations in low-risk resource plays Successfully accelerating drilling in the Spraberry and Eagle Ford Shale Redeployment of proceeds from pending Tunisia sale allows further…
  17. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 17
    Appendix 18
  18. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 18
    Pioneer Operations Raton CBM & Hugoton Pierre Shale (liquids & gas) (gas) Barnett Shale (liquids & gas) West Panhandle (liquids & gas) Edwards Trend (gas) Eagle Ford Shale (liquids & gas) 19
  19. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 19
    Production (MBOEPD)1 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Spraberry 31 31 32 35 38 Raton 30 29 28 28 28 Eagle Ford Shale - 1 2 1 2 South Texas 10 9 8 9 9 Mid-Continent 17 22 21 21 20 Alaska 6 6 7 7 6 Other U.S. 4 5 4 3 3 Total N.…
  20. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 20
    PXD Production By Commodity By Area1 1) All periods presented have been restated to exclude discontinued operations 21
  21. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 21
    Liquidity Position (12/31/10)1 Net debt (net of cash balance of 111 MM): 2.4 B Unsecured Senior Credit Facility availability: 1.4 B Net Debt-to-Book Capitalization: 37% Maturities and Balances2 2011 2012 2013 2016 2017 2018 2020…
  22. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 22
    PXD Open Commodity Derivative Positions as of 2/4/2011 (includes PSE) Oil Q1 2011 Q2 2011 Q3 2011 Q4 2011 2012 2013 2014 Swaps WTI (BPD) 750 750 750 750 3,000 3,000 - NYMEX WTI Price (/BBL) 77.25 77.25 77.25 77.25 79.32 81.02 -…
  23. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 23
    PXD Open Commodity Derivative Positions as of 2/4/2011 (includes PSE) Gas 2Q1 011 Q2 2011 Q3 2011 Q4 2011 2012 2013 2014 Swaps - (MMBTUPD) 117,500 117,500 117,500 117,500 105,000 67,500 50,000 NYMEX Price (/MMBTU)1 6.13 6.13 6.13 6.13…
  24. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 24
    PSE Derivative Position as of 2/4/2011 Oil Q1 2011 Q2 2011 Q3 2011 Q4 2011 2012 2013 2014 Swaps (BPD) 750 750 750 750 3,000 3,000 - NYMEX Price (/BBL) 77.25 77.25 77.25 77.25 79.32 81.02 - Collars (BPD) 2,000 2,000 2,000 2,000 - - -…
  25. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 25
    Three-Way Collars (55 by 70 by 90 example) Potential Opportunity Loss NYMEX Price Short call at 90/BBL Realized Price Short put at 55/BBL Long put at 70/BBL Potential Gain Realize NYMEX price Realize 70/BBL Realize…
  26. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 26
    Future Amortization of Deferred Gains - Discontinued Commodity Hedges1 ( Millions) Oil Gas NGL Total (Cash / Noncash) Total (Cash / Noncash) Total (Cash / Noncash) 1st Qtr 2011 9 [9 / -] - - 2nd Qtr 2011 9 [9 / -] - - 3rd Qtr…
  27. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 27
    Production Costs (per BOE)1 13.27 12.17 11.74 11.54 1.08 10.94 Q4 vs. Q3 Comparison 0.67 Workovers 0.93 1.01 Q4 2010 LOE includes 10 MM Alaska 3.27 0.73 Production & 2.05 2.59 processing fee recovery for 2010 Ad Valorem Taxes…
  28. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 28
    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…
  29. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 29
    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…
  30. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 30
    PXD Largest Spraberry Acreage Holder and Producer 20,000+ Drilling Locations PERMIAN BASIN 24 MM acres PXD Acreage (900,000 Acres; 75% HBP) 150 miles All Others (800,000 Acres) Spraberry Field Gross Production by…
  31. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 31
    History of Spraberry Trend Completions 1950 - 70s 1980 - 90s 2000s 2008 - 09 2010+ Average Clearfork 6,000 ft Cased Depth of Wellbore Fracture Spraberry Stimulation Upper Stages Spraberry Lower Dean…
  32. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 32
    Spraberry Increasing Recovery Per Section Expected Recovery Per Section (% of OOIP) 40-acre field development (350 MMBOE) 12% - 13% Ramping up drilling Capturing pay from shale/silt non-traditional intervals 5,100 locations…
  33. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 33
    Eagle Ford Shale: Largest U.S. Oil Discovery Since Prudhoe Bay Map source: PXD Gross resource potential of play: 150 TCF1 100 rigs currently running in the play Oil Window PXD Acreage Area 1) Source: Tudor, Pickering,…
  34. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 34
    80% of Pioneers Acreage in Condensate Window NW Handy Pioneer Well Pioneer Well Riedesel Chesnutt Pioneer Well SE 6 miles Condensate Window 13,000 ft 13,200 ft Austin Chalk 13,400 ft Sligo Margin Yield 13,600 ft 285 BBL/MM Top…
  35. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 35
    Eagle Ford Shale Production Breakdown 20% 20% 30% Condensate NGL1 NGL1 50% 100% Condensate Gas 50% 30% Gas Gas 1) NGLs are 50% ethane, 25% propane, 15% butanes and 10% heavier liquids 36
  36. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 36
    Eagle Ford Shale Provides Excellent BTAX IRRs Even With Low NGL Pricing 125% 100% IRR at NGL Prices 50% of WTI High Condensate Yield 100% 200 BBL / MMCF BTAX IRR 75% 50% IRR at NGL Prices Low Condensate Yield 50% of WTI…
  37. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 37
    Alaska - Oooguruk 1-rig drilling program will continue Initial Development Island Drill Site Area in 2011 Key element of program is further Recent Torok Well testing of Torok zone in Moraine play PXD Acreage First of 2…
  38. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 38
    Oil/Gas Ratio Trending Up Since 2006 Oil/Gas ratio has increased from 5:1 in 2006 to 20:1 recently Oil Price Oil/Gas Ratio Gas Price 39
  39. CREDIT SUISSE 2011 ENERGY SUMMIT – Pioneer Natural Resources Co. – slide 39
    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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