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Third Quarter 2014 Earnings – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Nov 5, 2014 · 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. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 1
    Third Quarter 2014 Earnings November 5, 2014
  2. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 2
    Capital Funding Rationale Current 1 B equity offering, combined with the expected sale of Pioneers Eagle Ford Shale Midstream business, is expected to allow Pioneer to prudently develop its assets in a 70 to 80 oil price environment…
  3. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 3
    Eagle Ford Shale Midstream Divestiture Pursuing divestment of Pioneers 50.1% share of Eagle Ford Shale Midstream business Joint divestiture process with Reliance Holding USA, Inc. (remaining 49.9%) Pioneer is the operator Data room…
  4. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 4
    Spraberry/Wolfcamp: World-Class Asset Over the 2011 2014 period, Pioneer has successfully transformed its Spraberry/Wolfcamp acreage from a vertical play into a world-class horizontal play Successfully appraised 6 highly prospective…
  5. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 5
    Pioneers Efforts Have Dramatically Increased Spraberry/Wolfcamp Resource Potential1 Capital Efficiency Driving Transition from Vertical to Horizontal Development 2011 2014 Spraberry/Wolfcamp Net Recoverable Spraberry/Wolfcamp Net…
  6. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 6
    Executing on the Growth Plan Q3 2014 production: 186 MBOEPD from continuing operations1 Top end of Q3 production guidance range of 181 MBOEPD 186 MBOEPD Up 10 MBOEPD, or 6%, compared to Q2 2014 (oil production up 9 MBOPD, or 12%)…
  7. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 7
    Executing on the Growth Plan (cont.) Northern Spraberry/Wolfcamp horizontal oil drilling Production data from 56 Wolfcamp A, B and D wells and 9 Lower Spraberry Shale wells placed on production in 2013 and during the first 9 months of…
  8. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 8
    Narrowing 2014 Production Growth Range from 16% - 19% to 18% - 19%1 FY Guidance MBOEPD1 Narrowing 182 - 183 guidance range 180 - 185 Mid-October Rate: 195 MBOEPD 200-205 186 176 166 155 137 59% 63% 66% 66% 69% 75%…
  9. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 9
    Pioneers 2013/9-Months 2014 Northern Spraberry/Wolfcamp Program Successfully placed 56 horizontal Wolfcamp and 9 horizontal Lower Spraberry Shale wells on production during 2013 and 9 months 2014 Pioneers Northern Well Count…
  10. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 10
    Production for Northern Wolfcamp B Horizontal Wells Drilled to Date1 Updated End September 2,000 Wolfcamp B: 33-well average in Midland, Martin, Glasscock and Andrews counties; 7,700 avg. lateral length 1,000 Daily Production…
  11. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 11
    Production for Northern Wolfcamp A Horizontal Wells Drilled to Date1,2 2,000 Updated End September Wolfcamp A: 12-well average in Midland and Glasscock counties; 6,940 avg. lateral length 1,000 Daily Production (BOEPD)…
  12. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 12
    Production for Northern Wolfcamp D Horizontal Wells Drilled to Date1 2,000 Updated End September Wolfcamp D: 11-well average in Midland, Martin, Glasscock and Andrews counties excludes two underperforming wells drilled in Tier 2 to…
  13. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 13
    Production for Northern Lower Spraberry Shale Horizontal Wells Drilled to Date1 2,000 Updated End September Lower Spraberry Shale: 9-well average in Midland, Martin, Glasscock and Andrews counties; 5,920 avg. lateral length 1,000…
  14. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 14
    Recent Middle Spraberry Shale and Jo Mill Shale Horizontal Results Recent Q3 Middle Spraberry Shale well (Pembrook 1402H) in Upton County; 4,982 lateral length Updated End September 2,000 Middle Spraberry Shale: PSU 1702H in Midland…
  15. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 15
    Continuing to Successfully Grow Spraberry/Wolfcamp Production Spraberry/Wolfcamp Net Production (MBOEPD)1 Narrowing 98 100 MBOEPD 73 horizontal wells placed on production in Q3 guidance to upper end of range 96 100 MBOEPD 33 in…
  16. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 16
    Pioneers 10-Year Plan for Spraberry/Wolfcamp Resource Development Optimized Marketing/ Procurement/ Development Plan Takeaway Gas Processing Services Cushing Keystone South Seaway Permian Basin Wink GC Market…
  17. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 17
    Meeting Long-Term Water Requirements Objective: Reduce reliance on fresh water used in drilling and fracture stimulation Frac Pond in Midland County operations, mitigate the need for disposal of produced water through recycling and…
  18. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 18
    Constructing Field-Wide System for Water Transport Field-wide system expected to include: 100 mile mainline 30 to 36 diameter o Includes fiber optic cable to support field communications Feeder lines from Odessa and Midland effluent…
  19. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 19
    Benefits of Water Project for Pioneer Ensures availability and improves deliverability of low-cost, long-term water supply across Pioneers Spraberry/Wolfcamp acreage position Provides a significant reduction in the cost of water for…
  20. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 20
    Field Infrastructure Tank Batteries & Gas Processing Tank Batteries / Saltwater Disposal New large-scale tank batteries and saltwater disposal New DL Hutt Tank Battery facilities being constructed to optimize future horizontal…
  21. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 21
    Brady Sand Mine Expansion Pioneers Brady, Texas sand mine is Brady Sand Mine strategically located within close proximity (190 miles) of the Spraberry/Wolfcamp Current capacity: 750 M tons per year Total proved reserves + probable…
  22. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 22
    Eagle Ford Shale Downspacing and Staggering Update Expect to place 50 wells on production in 25% of acreage prospective for Upper Eagle Ford Shale Upper targets during 2014 as part of the downspacing and staggering program in the…
  23. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 23
    Continuing to Successfully Grow Eagle Ford Shale Production Eagle Ford Shale Net Production (MBOEPD)1 Narrowing 46 47 MBOEPD Record Eagle Ford Shale net production of 47 MBOEPD guidance range 46 49 MBOEPD in Q3 Placed 35…
  24. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 24
    Optimizing Returns in a Lower Oil Price Environment Aggressively solicit cost reductions from service companies Focus Spraberry/Wolfcamp drilling activity on the best intervals Primarily drill Wolfcamp B, Wolfcamp A and Lower…
  25. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 25
    Q3 2014 Earnings Summary Millions Per Diluted (After Tax) Share Net income attributable to common stockholders 374 2.58 Noncash mark-to-market (MTM) derivative gains (337 MM before tax) (216) (1.49) Adjusted income excluding noncash…
  26. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 26
    Price Realizations1 Realized Prices 101.70 95.87 90.88 92.38 90.82 30.87 32.82 30.18 30.24 28.44 4.75 4.33 3.39 3.79 3.30 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Oil…
  27. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 27
    Production Costs (per BOE)1 14.15 14.30 2014 production costs trending 13.90 13.39 13.17 down as additional lower-cost Workovers 0.72 0.76 0.59 0.55 0.63 horizontal Spraberry/Wolfcamp Production & 3.51 3.68 3.52 wells are placed…
  28. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 28
    Liquidity Position (9/30/14) Net debt (net of cash balance of 550 MM): 2.1 B Unsecured credit facility availability: 1.5 B Net debt-to-book capitalization: 23% Maturities and Balances1 2016 2017 2018 2020 2022 2028 455 MM 485…
  29. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 29
    Q4 2014 Guidance1 Guidance Daily Production (MBOEPD) 200 205 Production Costs (/BOE) 13.25 15.25 Exploration & Abandonment ( MM) 25 35 Drilling and Acreage 10 Personnel and Seismic 25 DD&A (/BOE) 15.00 17.00 G&A ( MM) 80…
  30. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 30
    Pioneers Significant Proved Reserves and Recoverable Resource Potential1 Proved Reserves + Estimated Net Recoverable Resource Potential of 11 BBOE 22,000 Horizontal Drilling Locations 12/31/13 Proved Reserves: 845 MMBOE2 Additional…
  31. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 31
    2014 Drilling Capital1 Millions 974 730 612 Q1 '14 Q2 '14 Q3 '14 1) Excludes acquisitions, asset retirement obligations, capitalized interest, geological and geophysical administrative costs and capital expenditures during…
  32. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 32
    Pioneers Production By Commodity By Area Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Spraberry/Wolfcamp Oil (BOPD) 51,903 52,957 58,307 57,893 66,425 NGL (BOEPD) 16,200 16,251 16,693 19,754 21,734 Gas (MCFD) 62,939 65,863 66,770 83,368 86,412…
  33. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 33
    Oil and Gas Revenue1 Millions 967 938 890 820 791 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 35 1) All periods presented have been restated to exclude discontinued operations associated with Alaska, Barnett Shale and Hugoton…
  34. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 34
    Open Commodity Derivative Positions as of 10/30/2014 Oil Q4 2014 2015 2016 Swaps WTI (BPD) 15,000 - - NYMEX WTI Price (/BBL) 96.31 - - Three Way Collars (BPD)1,2 69,000 95,767 70,000 NYMEX Call Price (/BBL) 114.05 99.36 96.86…
  35. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 35
    Open Commodity Derivative Positions as of 10/30/2014 Natural Gasoline Q4 2014 2015 2016 Three Way Collars (BPD)1,2 3,500 - - Mont Belvieu Call Price (/BBL) 97.93 - - Mont Belvieu Put Price (/BBL) 90.14 - - Mont Belvieu Short…
  36. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 36
    Open Commodity Derivative Positions as of 10/30/2014 Gas Q4 2014 2015 2016 Swaps - (MMBTUPD) 195,000 20,000 70,000 NYMEX Price (/MMBTU)1 4.04 4.31 4.06 Three Way Collars (MMBTUPD)1,2 115,000 285,000 20,000 NYMEX Call Price…
  37. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 37
    General & Administrative Costs1 Millions 96 14 81 82 81 72 14 15 16 Noncash 14 Q3 Q4 Q1 Q2 Q3 2013 2013 2014 2014 2014 39 1) All periods presented have been restated to exclude discontinued operations associated with…
  38. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 38
    Interest Costs Millions 47 46 45 45 45 4 4 4 5 4 Noncash Q3 Q4 Q1 Q2 Q3 2013 2013 2014 2014 2014 40
  39. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 39
    Exploration & Abandonments1 ( Millions) Drilling, Acreage & Other Abandonments: 1 Geological & Geophysical: Seismic 5 Personnel & Other 16 3rd Quarter 2014 Total 22 41 1) Excludes discontinued operations associated with…
  40. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 40
    Income Taxes Attributable to Continuing Operations Quarter Ended September 30, 2014 ( Millions) Current tax benefit (14) Deferred tax provision 250 Income tax provision 236 42
  41. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 41
    Supplemental Non-GAAP Financial Measures Adjusted income excluding noncash MTM derivative gains and adjusted income excluding noncash MTM derivative gains and unusual items, as presented in the Financial and Operating Highlights slide and…
  42. Third Quarter 2014 Earnings – Pioneer Natural Resources Co. – slide 42
    Certain Reserve Information Cautionary Note to U.S. Investors --The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than reserves, as that term is defined by the…

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