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Q4 2010 Earnings Call – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Feb 8, 2011 · 43 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. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 1
    Fourth Quarter 2010 Earnings February 8, 2011
  2. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 8
    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…
  9. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 9
    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…
  10. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 10
    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…
  11. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 11
    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…
  12. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 12
    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…
  13. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 13
    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.…
  14. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 14
    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…
  15. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 15
    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…
  16. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 16
    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…
  17. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 17
    Q4 2010 Earnings Summary Millions Per Diluted (After Tax) Share Net income attributable to common stockholders1 80 0.67 Unrealized mark-to-market (MTM) derivative losses (143 MM before tax) 85 0.71 Adjusted income excluding…
  18. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 18
    Q4 2010 Guidance vs. Results (Continuing Ops) Q4 2010 Results Q4 2010 Results Incl. Tunisia and Excl. Tunisia and Q4 2010 Guidance Excl. Unusual Items1 Incl. Unusual Items Daily Production (MBOEPD) 115 120 117 111 Production…
  19. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 19
    Price Realizations1 Realized Prices (excludes VPPs and derivatives) 79.93 73.77 72.63 70.41 72.09 40.77 41.03 36.16 33.36 33.49 5.23 4.08 4.02 4.23 3.76 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09…
  20. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 20
    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…
  21. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 21
    Q1 2011 Guidance1 Guidance Daily Production (MBOEPD) 114 - 118 Production Costs (/BOE) 11.75 13.75 Exploration & Abandonment ( MM) 25 35 Drilling and Acreage 10 - 20 Seismic Activity and Personnel 15 DD&A (/BOE) 13.50 15.00 G&A…
  22. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 22
    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…
  23. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 23
    2010 Capital Spending1 Millions 328 316 36 Acreage 86 261 17 200 43 280 Drilling 242 244 157 Q1 2010 Q2 2010 Q3 2010 Q4 2010 1) Excludes asset retirement obligations (ARO) - 21 MM, capitalized interest - 15 MM and G&G…
  24. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 24
    Oil and Gas Revenue1 Millions 472 472 VPP Deferred 22 437 22 Revenue 417 422 22 36 22 450 450 400 415 381 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 1) All periods presented have been restated to exclude discontinued operations 26
  25. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 25
    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.…
  26. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 26
    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 -…
  27. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 27
    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…
  28. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 28
    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 - - -…
  29. Q4 2010 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) 1st Qtr 2011 9 [9 / -] - - 2nd Qtr 2011 9 [9 / -] - - 3rd Qtr…
  30. Q4 2010 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. Q4 2010 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. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 32
    Oil Differentials (per BBL)1 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 NYMEX calendar month average 76.19 78.71 78.04 76.20 85.18 NYMEX differential excluding VPPs and derivatives U.S. (4.16) (5.11) (5.51) (5.90) (5.28) South Africa2 1.14…
  33. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 33
    NGL Differentials (per BBL)1 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 NYMEX oil calendar month average 76.19 78.71 78.04 76.20 85.18 NYMEX differential excluding derivatives (40.03) (37.94) (44.68) (42.71) (44.15) Realized prices excluding…
  34. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 34
    Gas Differentials (per MCF)1 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 NYMEX bid week average 4.17 5.30 4.09 4.38 3.80 NYMEX differential excluding VPPs and derivatives U.S. (0.14) (0.17) (0.25) (0.35) (0.23) South Africa2 2.10 1.01 2.02 1.96…
  35. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 35
    Other Costs1 General & Administrative Costs Interest Costs Millions Millions 48 45 45 45 45 43 43 40 38 35 8 9 Noncash 7 7 6 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2009 2010 2010 2010 2010 2009 2010 2010 2010 2010 1) All…
  36. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 36
    Exploration & Abandonments Millions Drilling & Acreage Cosmopolitan 97 Unsuccessful Exploration in Utah and Other Acreage 18 115 Geological & Geophysical U.S. Resource Plays 3 Personnel & Other 11 14 4th Quarter 2010 Total…
  37. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 37
    Income Taxes Quarter Ended December 31, 2010 ( Millions) U. S. S. Africa Total Current tax provision - 4 4 Deferred tax benefit (32) (3) (35) Tax provision (benefit) (32) 1 (31) 39
  38. Q4 2010 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. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 39
    Supplemental Non-GAAP Financial Measures Adjusted income excluding unrealized MTM derivative losses adjusted income excluding unrealized MTM derivative losses and unusual items, as presented in the Highlights slide and as presented in…
  40. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 40
    Supplemental Non-GAAP Financial Measures Selected Q4 2010 results including Tunisia and excluding unusual items, as presented in the Q4 2010 Guidance vs. Results slide, are presented and reconciled to the comparable GAAP results in the…
  41. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 41
    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…
  42. Q4 2010 Earnings Call – 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. Q4 2010 Earnings Call – Pioneer Natural Resources Co. – slide 43
    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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