PIONEERS AREAS OF OPERATION Current Enterprise Value 27B 2016 Planned Capex 2.0B Permian 1.8B Forecasted 2016 Production Growth 12%+ 3
PIONEER AT A GLANCE Largest Spraberry/Wolfcamp acreage position with decades of drilling inventory Well positioned to weather the current low commodity price environment Strong balance sheet (investment grade) Strong derivatives…
THE RACE CAR DRIVER PIT CREW STRATEGY Acreage Development Execution Financing Position Plan & Sustainability
CAR Acreage Position
DRILLING RESULTS CONFIRMING PIONEERS MIDLAND BASIN SWEET SPOT Higher Tier 1 Tier 2 Pioneer Land Pioneer Wolfcamp B wells Wolfcamp B depth contour Test Rate (BOEPD/1000 lateral) Pioneer Wolfcamp B Prospectivity Map (Early…
ACREAGE POSITION: TUNING A WINNING RACE CAR Scenario 1 Pre Trade Scenario 2 Post Trade 1 mile 1 mile Scenario 1 Scenario 2 1 mile PXD PXD 1 mile 2 non-contiguous Contiguous sections sections 5,000 ft laterals 10,000 ft…
DRIVER Development Plan
THE OBJECTIVE Perfection Possibilities Too Close Too Big Too Late Too Far Too Small Too Bad 10
TRUE COST OF COINS Cost 0.0143 0.0699 0.0338 0.0775 G&A 0.0021 0.0102 0.0049 0.0109 Transport 0.0002 0.0008 0.0004 0.0011 Total Cost 0.0166 0.0809 0.0391 0.0895 Total Value 0.01 0.05 0.10 0.25 11
THE COIN FRAC Quarter Frac Cost 0.0895 0.0895 0.0895 0.0895 0.3580 Value 0.2500 0.2500 0.2500 0.2500 1.0000 Total If Cost = Development Cost (AKA Finding Cost) If Value = Reserves Then Cost / Value = Finding and Development…
THE QUARTER FRAC Correct Spacing Cost: 8.95 x 4 = 35.8 cents Value:100 cents F&D: 35.8 / 100 = 0.358 Too Far Cost: 8.95 x 3 = 26.85 cents Value: 75 cents (lost 25 cents) F&D: 75 / 26.85 = 0.358 Too Tight Cost: 8.95 x 5 =…
THE DIME FRAC Cost: 8.95 x 4 = 35.8 cents Value: 50 cents Cost: 8.95 x 4 = 35.8 cents Value: 100 cents Total Cost: 71.6 cents Total Value: 150 cents F&D: 71.6 / 150 = 0.48 Cost: 3.91 x 5 = 19.55 cents Value: 50 cents Cost:…
PENNY AND NICKEL FRACS PENNY FRACS NICKEL FRACS SHORT LATERALS MECHANICAL FAILURE UNDER STIMULATED SCREEN OUT POOR ROCK TOO CLOSE TOO BIG TOO LATE 15
SPACING & STIMULATION EXAMPLE 2014 Wells Midland County 2015 Wells Martin County 600 ft spacing All wells received similar stimulation All wells received modified stimulations than the original Stage Stage BBL/FT LBS /FT CL /ST CL…
PIT CREW Execution
DRILLING EXECUTION Not All Intervals Created Equal Cum. Wells Rig Released (2015+) Ft per Day (Spud to Rig Release) WC A LSS Avg. PXD WC B Rig Release Quarter 18
COMPLETIONS EXECUTION Attainment to Design Targets per Day Trend 100% Jan. 2 to May 1 90% 90% 80% 70% 60% 50% 40% 30% 20% January February March April May Stretch Goal Base Period Rolling-30 Daily Goal Linear…
MAINTAIN A STRONG BALANCE SHEET 2016E2016E Leverage Metric Leverage Metric (2016E Net Debt / 2016E EBITDA) 10x (2016E Net Debt/2016E EBITDA) 9x 8x 7x Pioneer has lowest leverage in 6x industry 5x 4x Average Leverage: 3x…
PROTECTING CASH FLOW WITH ATTRACTIVE DERIVATIVES POSITION PIONEERS DERIVATIVE GAINS TOTAL 2 BILLION SINCE 2011 OIL AND GAS DERIVATIVES UTILIZED TO PROTECT CASH FLOW OIL DERIVATIVE COVERAGE OF 85% FOR 2016 AND 50% FOR 2017 GAS…
SUSTAINING LOW SERVICE COSTS Pumping Services Well Services Premier Silica PXD entered Permian with Organically grown business Acquired Carmeuse fracture stimulation services unit created in November Industrial Sands in April in…
SAFETY AND ENVIRONMENT SAFETY Reduced OSHA Recordable Rate by 48% since 2012 Reduced Lost Time Incident Rate by 77% since 2012 Focused on Reducing Contractor Incidents ENVIRONMENT Water Sourcing, Recycling and Reuse Emission…
SUSTAINABLE DEVELOPMENT (MANAGING DEPENDENCIES) Optimized Marketing/ Gas Processing Procurement/ Development Plan Takeaway Services Cushing Keystone South Seaway Permian Basin Wink GC Market Pioneer is committed…
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