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Q3 2012 Earnings Call – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Nov 1, 2012 · 47 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 2012 Earnings Call – Pioneer Natural Resources Co. – slide 1
    Third Quarter 2012 Earnings November 1, 2012
  2. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 2
    Highlights Q3 2012 adjusted income1 of 104 MM, or 0.82 per adjusted share1 Q3 2012 production: 159.9 MBOEPD2 (153.0 MBOEPD excluding production from the Barnett Shale properties that are included in discontinued operations pending…
  3. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 3
    Highlights Continued Continuing to drill successful horizontal Wolfcamp Shale wells Well performance in southern 200,000 acres meeting type curve expectations Commenced drilling delineation wells in northern acreage Pursuing joint…
  4. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 4
    Strong Production Growth Continues in 20121 MBOEPD 160 MBOEPD including Barnett Shale 154 - 158 153 140 143 Strong drilling and well 117 performance in Spraberry vertical, 101 horizontal Wolfcamp Shale and Eagle Ford Shale…
  5. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 5
    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…
  6. Q3 2012 Earnings Call – 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. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 7
    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…
  8. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 8
    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…
  9. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 9
    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…
  10. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 10
    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…
  11. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 11
    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…
  12. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 12
    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%…
  13. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 13
    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…
  14. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 14
    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…
  15. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 15
    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…
  16. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 16
    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…
  17. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 17
    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 18
  18. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 18
    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…
  19. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 19
    Eagle Ford Shale Continues to Set New Production Records Eagle Ford Shale Net Production1 Narrowing guidance range based on YTD results (MBOEPD) 27 28 25 29 MBOEPD FY Guidance 32 - 35 Strong well performance continues 29 to…
  20. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 20
    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…
  21. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 21
    Q3 2012 Earnings Summary Millions (After Tax) Per Share Net income attributable to common stockholders 19 0.15 Unrealized mark-to-market (MTM) derivative losses (232 MM before tax) 146 1.19 Adjusted income excluding unrealized MTM…
  22. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 22
    Price Realizations1 Realized Prices (excludes VPPs and derivatives) 99.10 91.54 86.96 86.83 88.05 48.33 45.60 41.90 32.90 31.28 4.05 3.39 2.52 2.62 2.02 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3…
  23. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 23
    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…
  24. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 24
    Q4 2012 Guidance1 Guidance Daily Production (MBOEPD) 154 158 Production Costs (/BOE) 14.50 16.50 Exploration & Abandonment ( MM) 25 35 Drilling and Acreage 15 Personnel and Seismic 20 DD&A (/BOE) 13.50 15.50 G&A ( MM) 60 65…
  25. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 25
    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…
  26. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 26
    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…
  27. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 27
    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…
  28. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 28
    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…
  29. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 29
    Oil and Gas Revenue1 Millions 698 695 9 VPP Deferred 642 10 622 Revenue 11 574 10 10 689 685 631 612 564 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 1) All periods presented have been restated to exclude discontinued operations…
  30. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 30
    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 -…
  31. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 31
    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…
  32. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 32
    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…
  33. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 33
    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…
  34. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 34
    Impact of Volumetric Production Payments (VPP) Amortization of VPP Deferred Revenue1 ( Million) Q1 Q2 Q3 Q4 Total Gas / Oil Gas / Oil Gas / Oil Gas / Oil Gas / Oil 2005 11 / - 19 / - 21 / - 20 / - 71 / - 2006 16 / 27 20 / 28 19 /…
  35. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 35
    Oil Differentials (per BBL)1 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 NYMEX calendar month average 89.76 94.06 102.93 93.49 92.22 NYMEX differential (2.80) (2.52) (3.83) (6.66) (4.17) Realized prices excluding VPPs and derivatives 86.96…
  36. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 36
    NGL Differentials (per BBL)1 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 NYMEX oil calendar month average 89.76 94.06 102.93 93.49 92.22 NYMEX differential (41.43) (48.46) (61.03) (60.59) (60.94) Realized prices excluding derivatives 48.33 45.60…
  37. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 37
    Gas Differentials (per MCF)1 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 NYMEX bid week average 4.20 3.55 2.72 2.21 2.80 NYMEX differential (0.15) (0.16) (0.20) (0.19) (0.18) Realized prices excluding derivatives 4.05 3.39 2.52 2.02 2.62…
  38. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 38
    General & Administrative Costs1 Millions 63 63 55 12 55 12 Noncash 50 10 13 9 Q3 Q4 Q1 Q2 Q3 2011 2011 2012 2012 2012 1) All periods presented have been restated to exclude discontinued operations 40
  39. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 39
    Interest Costs1 Millions 54 49 46 46 47 9 Noncash 8 8 8 10 Q3 Q4 Q1 Q2 Q3 2011 2011 2012 2012 2012 1) All periods presented have been restated to exclude discontinued operations 41
  40. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 40
    Exploration & Abandonments Millions Drilling & Acreage Alaska 1 South Texas 1 Acreage & Other 11 13 Geological & Geophysical Seismic 3 Personnel & Other 11 14 3rd Quarter 2012 Total 27 42
  41. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 41
    Income Taxes Attributable to Continuing Operations Quarter Ended September 30, 2012 ( Millions) Current tax benefit 13 Deferred tax provision (22) (8) 43
  42. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 42
    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…
  43. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 43
    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…
  44. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 44
    Supplemental Non-GAAP Financial Measures Adjusted income excluding unrealized MTM derivative losses and adjusted income excluding unrealized MTM derivative losses, unusual items and the incremental share dilution, as presented in the Q3…
  45. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 45
    Supplemental Non-GAAP Financial Measures Selected Q3 2012 results including Barnett Shale activity and excluding unrealized MTM derivative losses and unusual items, as presented in the Q3 2012 Earnings Summary Slide, are presented and…
  46. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 46
    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…
  47. Q3 2012 Earnings Call – Pioneer Natural Resources Co. – slide 47
    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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