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June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Jun 23, 2016 · 36 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. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 1
    Investor Presentation June 2016
  2. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 2
    Pioneer At A Glance 27 B 2.1 B 12%+ Active Drilling Areas Current 2016 Planned Forecasted Enterprise Capex 2016 Value Production 1.95 B Permian Growth Raton West Panhandle Gas 222 27% Spraberry/Wolfcamp Dallas Headquarters…
  3. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 3
    Updated 2016 Outlook Acquiring 28,000 net acres in the Midland Basin from Devon for 435 MM Substantially all of this acreage is in the core of the Midland Basin with 15,000 net acres located in the prolific Sale Ranch area in Martin…
  4. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 4
    Midland Basin Acreage Acquisition Overview Acquiring 28,000 net acres in the Midland Basin from Devon for 435 MM; closing expected in Q3 Acquired Acreage Substantially all of the acreage being acquired is core and a significant…
  5. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 5
    Sale Ranch Well Performance Continues to Impress Pioneer has placed 41 horizontal Wolfcamp B interval wells on production in the Sale Ranch area since mid-2014 with lateral lengths 7,000 Well performance has improved significantly as a…
  6. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 6
    2016E Capital Spending and Cash Flow1 Capital program increased from 2.0 B to 2.1 B Drilling and Completions Capital: 1.95 B 1,810 MM northern Spraberry/Wolfcamp (90% of total) o 1,540 MM for horizontal drilling program o 160 MM for…
  7. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 7
    Production Growth Forecast Total Net Production (MBOEPD) 229+ MBOEPD 224 - 229 222 204 182 55% Oil 20141 20152 Q1 Q2 Q3 Q4 2017E 2 48% Oil 52% Oil 60% Oil 2016E2 56% Oil 1) Excludes Alaska, Barnett Shale and…
  8. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 8
    Liquidity Position Net debt as of Q1 2016 (reflects cash on hand, including 1.1 B liquid investments, of 2.5 B) Excludes net proceeds of 400 MM from June equity offering net of acquisition purchase price and additional 500 MM to be…
  9. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 9
    Northern Spraberry/Wolfcamp Completion Optimization Program Continues to Deliver Strong Performance Wolfcamp B All Completion Optimization Tests Updated Wolfcamp A Updated Since Mid-2015: mid April All Completion Optimization Tests mid…
  10. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 10
    Southern Wolfcamp Completion Optimization Program Continues to Deliver Strong Performance Completion optimization on 22 wells through end-Q1 2016 has resulted in strong well productivity improvements Pioneer is continuing to test…
  11. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 11
    Completion Optimization Timeline Designing completions to allow more rock to be contacted closer to the wellbore Version 1.0 Version 2.0 Version 3.0 Initial Frac Design Current Frac Design Testing Underway (2013 - 2014) (Q3 2015 -…
  12. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 12
    Continuing to Reduce Spraberry/Wolfcamp Drilling and Completion Costs Drilling & Completion Cost per Perforated Lateral Foot1 (Includes all northern Wolfcamp B wells)2 1,300 1,140 1,085 985 905 890 Q4 2014 Q1 2015 Q2…
  13. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 13
    2016 Spraberry/Wolfcamp Drilling Program Currently operating 12 horizontal rigs in the Pioneers Spraberry/Wolfcamp 2016 Drilling Areas northern area; expect to add 5 rigs in 2H Expect to place 230 horizontal wells on Northern…
  14. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 14
    Spraberry/Wolfcamp Production Forecast Spraberry/Wolfcamp Net Production (MBOEPD)1 167+ MBOEPD 149 125 93 99 66 33 Horizontal Vertical 2014 20152 Q1 Q2 Q3 Q4 2017E 2 2016E2 1) Includes horizontal and vertical…
  15. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 15
    PXD Investment Highlights U.S. asset base Largest Spraberry/Wolfcamp acreage position (800,000 gross acres) High oil exposure from substantial resource potential in Spraberry/Wolfcamp 20,000 drilling locations Strong production…
  16. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 16
    Appendix 17
  17. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 17
    Pioneers Areas of Operations Current Total Enterprise Value (B) 27 Q1 2016 Production 55% Oil (MBOEPD) 222 2015 Drillbit F&D (/BOE) 10.18 2015 Reserve Replacement (%) 273% YE 2015 Proved Reserves (BBOE) 0.6 Raton West…
  18. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 18
    Production By Commodity By Area Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Spraberry/Wolfcamp Oil (BOPD) 74,538 77,735 87,547 92,121 102,016 NGL (BOEPD) 19,760 22,627 26,051 24,701 24,802 Gas (MCFPD) 104,519 110,165 120,681 120,025 132,029…
  19. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 19
    Production Costs (per BOE) Q1 2016 compared to Q4 2015: LOE costs declined by 20%, primarily due to: 12.56 o Lower costs for chemicals, Workovers 11.62 0.62 11.19 11.02 electricity and contract services Production & 0.64 Ad…
  20. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 20
    Minimizing Spraberry/Wolfcamp Infrastructure Spending in 2016 Tank Battery/Saltwater Disposal (SWD) Facilities Expect to spend 170 MM in 2016 for new facilities and expansions o Cost per well hook-up expected to decline from 900 M in…
  21. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 21
    Derivative Philosophy Continue to use derivatives to mitigate commodity price exposure in order to ensure funding for development programs and to maintain strong financial position Continue to use a variety of derivative instruments,…
  22. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 22
    Open Commodity Derivative Positions as of 5/31/16 Oil Q2 2016 Q3 2016 Q4 2016 2017 Swaps - WTI (BPD) 60,000 - - - NYMEX WTI Price (/BBL) 53.08 - - - Collars (BPD) - - - 6,000 NYMEX Short Call Price (/BBL) - - - 70.40 NYMEX…
  23. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 23
    Open Commodity Derivative Positions as of 5/31/16 Ethane Q2 2016 Q3 2016 Q4 2016 2017 Collars (BPD)1 - - - 3,000 Mont Belvieu Call Price (/BBL) - - - 11.83 Mont Belvieu Put Price (/BBL) - - - 8.68 Propane Q2 2016 Q3 2016 Q4…
  24. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 24
    Open Commodity Derivative Positions as of 5/31/16 Gas Q2 2016 Q3 2016 Q4 2016 2017 2018 Swaps (MMBTUPD) 70,000 70,000 70,000 - - NYMEX Price (/MMBTU)1 4.06 4.06 4.06 - - Three Way Collars (MMBTUPD)1,2 180,000 180,000 180,000…
  25. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 25
    Three-Way Collars (50 by 70 by 80 Example) 100 NYMEX Oil Three-Way Collar Realization Short-Put at Long-Put at Short-Call at 90 50/BBL 70/BBL 80/BBL Potential Opportunity Realize NYMEX Price Loss 80 Realized Price (/BBL)…
  26. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 26
    Pioneers Year-End 2015 Proved Reserves1 Added 210 MMBOE from the drillbit, or 273% of full-year production, at a drillbit F&D cost of 10.18 per BOE2 Primarily reflects successful Spraberry/Wolfcamp horizontal drilling program…
  27. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 27
    U.S. Shale Production Forecast at Various Price Scenarios U.S. shale industry needs 55 to 60 oil to keep production flat Average Brent U.S. Shale Oil and Condensate Production (MMBbl/d) (2014/Bbl) 12 110-120 10 100-110…
  28. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 28
    Non-OPEC Oil Production Non-OPEC Oil Production Falls Rapidly in 2015, Declines in 2016 & 2017 29 Source: PIRA
  29. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 29
    Geologic Provinces of the Permian Basin PEDERNAL UPLIFT & ROOSEVELT POSITIVE OZONA PLATFORM Basin DEVILS Basement RIVER Uplift UPLIFT Shelf Thrust Belt Permian Basin is composed of multiple uplifts and basins that…
  30. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 30
    Wolfcamp Depositional Model Midland Basin Platform Platform Carbonate Land Carbonate Shelf Edge Carbonate Pelagic Sediments Clastic Detrital Slope Sediments & Reef Talus Fluvial - Deltaic Silt Cloud in Suspension Midland…
  31. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 31
    Regional Cross Section D-D 13 horizontal play intervals identified (so far) Successful Horizontal Wells in the Play 10 intervals have been tested successfully Future Horizontal Play 3 additional intervals remain to be tested North…
  32. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 32
    Midland Basin: Stacked Play Potential Midland Basin Delta log R (excess electrical resistance) Clear Fork Red intervals indicate hydrocarbons Petrophysical analysis indicates significantly more oil in place U. Spraberry M.…
  33. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 33
    Midland Basin Horizontal Resource Potential 75 BBOE Recoverable Resource Potential Spraberry Wolfcamp D Shales 13 BBOE 14 BBOE Wolfcamp C 2 BBOE Wolfcamp A Wolfcamp B 19 BBOE 27 BBOE 75 BBOE recoverable resource…
  34. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 34
    Drilling Results Confirming Pioneers Midland Basin Sweet Spot PXD Wolfcamp B Prospectivity Map (Early 2013) 2014 ITG Research Report Wolfcamp (All Zones) Test Rates Higher Tier 1 Tier 2 Pioneer Land Pioneer Wolfcamp B wells…
  35. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 35
    Crude Pipeline Capacity to Gulf Coast Major Permian Crude Pipeline Takeaway Operator Origin Destination Pipeline Capacity (BOD) Plains Permian Cushing Basin 450,000 Cushing Oxy Permian Cushing Centurion 75,000 Sunoco Permian GC West…
  36. June 2016 Investor Presentation Transaction Update – Pioneer Natural Resources Co. – slide 36
    Spraberry/Wolfcamp Midstream Infrastructure Gas Processing Pipeline NGL Takeaway Targa System to Mont Belvieu PXD has 27% interest Chaparral & West Texas Pipelines Current capacity: 855 MMCFD1 Sale Ranch PXD production throughput…

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