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Johnson Rice Energy Conference – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Sep 21, 2016 · 44 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. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 1
    Investor Presentation September 2016
  2. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 2
    Pioneer At A Glance 30 B 2.1 B 13%+ Active Drilling Areas Current 2016 Planned Forecasted Enterprise Capex1 2016 Value Production 1.9 B Permian Growth Raton West Panhandle Gas Oil 233 24% Spraberry/Wolfcamp Dallas…
  3. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 3
    Outlook Pioneer plans to increase its horizontal rig count from 12 rigs to 17 rigs in the northern Spraberry/Wolfcamp during 2H 2016 First rig being added in September followed by 2 rigs in October and 2 rigs in November 3 of the…
  4. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 4
    2016E Capital Spending1 and Cash Flow Capital program increased from 2.0 B to 2.1 B during Q2 Drilling and Completions Capital: 1.95 B 1,810 MM northern Spraberry/Wolfcamp (90% of total) o 1,540 MM for horizontal drilling program…
  5. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 5
    Production Growth Forecast Total Net Production (MBOEPD) 231+ MBOEPD 233 232-237 222 204 55% Oil 58% Oil 2015 Q1 Q2 Q3 Q4 2017E1 2020E 1 52% Oil 62% Oil 65% Oil 2016E1 58% Oil 6 1) Assumes ethane rejection…
  6. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 6
    Liquidity Position Net debt at the end of Q2 2016 (reflects cash on hand, 0.3 B including liquid investments, of 3.3 B) Unsecured credit facility availability 1.5 B Net debt-to-book capitalization at the end of Q2 3% Repaid…
  7. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 7
    Midland Basin Acreage Acquisition Overview Acquired 28,000 net acres in the Midland Basin Acquired Acreage from Devon for 435 MM; closed late August Substantially all of the acreage acquired is core and a Sale Ranch significant…
  8. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 8
    Sale Ranch Well Performance Continues to Improve 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…
  9. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 9
    Spraberry/Wolfcamp Completion Optimization Program Continues to Deliver Strong Performance Northern Area - Wolfcamp B Version 2.0 Updated 250 All 87 wells since mid-2015 Mid-July (8,200 average lateral length) Cumulative Production…
  10. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 10
    Spraberry/Wolfcamp Completion Optimization Program Continues to Deliver Strong Performance (cont.) Northern Area - Wolfcamp A Updated Version 2.0 Mid-July 250 All 15 wells since mid-2015 Version 3.0 Cumulative Production (MBOE)1…
  11. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 11
    Spraberry/Wolfcamp Completion Optimization Program Continues to Deliver Strong Performance (cont.) Lower Spraberry Shale Updated Mid-July 250 Version 2.0 Cumulative Production (MBOE)1 All 24 wells since mid-2015 200 (9,100…
  12. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 12
    Completion Optimization Program 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 -…
  13. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 13
    Continuing to Reduce Spraberry/Wolfcamp Drilling and Completion Costs Drilling & Completion Cost per Perforated Lateral Foot1 (Reflects only northern Wolfcamp B wells) Q2 average well cost by interval: 1,300 WC B 7.2 MM 8,500 WC A…
  14. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 14
    2016 Spraberry/Wolfcamp Drilling Program Currently operating 12 horizontal rigs in the northern area; expect to add 5 rigs in 2H Pioneers Spraberry/Wolfcamp 2016 Drilling Areas Expect to place 230 horizontal wells on Northern…
  15. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 15
    Spraberry/Wolfcamp Production Forecast Spraberry/Wolfcamp Net Production (MBOEPD)1 168+ MBOEPD 167 149 115 125 93 66 Horizontal Vertical 2015 Q1 Q2 Q3 Q4 2017E2 2016E2 69 wells placed on production in Q2 2016 (49 in…
  16. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 16
    PXD Investment Highlights U.S. asset base Largest Spraberry/Wolfcamp acreage position (800,000 gross acres) High oil exposure from substantial resource potential in the Spraberry/Wolfcamp: 20,000 drilling locations Strong…
  17. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 17
    Pioneers Areas of Operations Current Total Enterprise Value (B) 30 Q2 2016 Production 58% Oil (MBOEPD) 233 2015 Drillbit F&D (/BOE) 10.18 2015 Reserve Replacement (%) 273% YE 2015 Proved Reserves (BBOE) 0.6 Raton West…
  18. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 18
    Production By Commodity By Area Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Spraberry/Wolfcamp Oil (BOPD) 77,735 87,547 92,121 102,016 117,388 NGL (BOEPD) 22,627 26,051 24,701 24,802 27,829 Gas (MCFPD) 110,165 120,681 120,025 132,029 131,847…
  19. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 19
    Production Costs (per BOE) Q2 2016 compared to Q1 2016: Lower LOE related to: 11.62 o Reduced maintenance costs due Workovers 11.19 11.02 0.64 to centralization of activities 0.63 0.60 Production & 9.17 Ad Valorem 1.87 o Reduced…
  20. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 20
    Cash Margins By Asset Q2 2016 Cash Margin by Asset ( per BOE) Permian Permian Total Horizontals Verticals Eagle Ford Other Assets Company Realized price (ex-hedges) 34.34 29.73 22.67 14.02 28.95 Production costs1 (2.25) (12.35)…
  21. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 21
    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…
  22. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 22
    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,…
  23. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 23
    Open Commodity Derivative Positions as of 7/25/16 Oil Q3 2016 Q4 2016 2017 Collars (BPD) - - 6,000 NYMEX Short Call Price (/BBL) - - 70.40 NYMEX Put Price (/BBL) - - 50.00 Three Way Collars (BPD)1 112,000 112,000 75,000 NYMEX…
  24. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 24
    Open Commodity Derivative Positions as of 7/25/16 Ethane 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 Q3 2016 Q4 2016 2017 Swaps (BPD)2…
  25. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 25
    Open Commodity Derivative Positions as of 7/25/16 Gas Q3 2016 Q4 2016 2017 2018 Swaps (MMBTUPD) 70,000 70,000 - - NYMEX Price (/MMBTU)1 4.06 4.06 - - Three Way Collars (MMBTUPD)1,2 180,000 180,000 130,000 50,000 NYMEX Call…
  26. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 26
    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)…
  27. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 27
    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…
  28. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 28
    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…
  29. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 29
    Permian Basin Regional Overview Outline of Central Basin Uplift Outline of Tatum Central Basin Platform Basin Grisham Fault Big Lake Fault Ozona Uplift Top Woodford structure Marfa (from Geomap) Basin Kerr…
  30. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 30
    Permian Basin Horizontals Are A Game Changer The Permian Basin has produced 35 BBOE in the past 90 years with an estimated 150 BBOE recoverable resource remaining 1.6 Permian Basin Tight 160 Oil Production 1.4 140 Daily Oil…
  31. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 31
    Permian Basin Only Growing Oil Shale Play Since 2015 Permian Basin is the only growing major U.S. oil shale 30% since downturn began 25% Percent Change in Daily Production Since 2015 20% 15% 10% 5% - (5%) (10%)…
  32. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 32
    Permian Basin: Increasing Rig Count Market Share % U.S. Horizontal Oil Rigs By Basin 100% 90% Williston 80% 70% 50% Permian Basin 60% 15% 50% Other 40% 30% 20% Eagle Ford 10% Woodford 0% Feb/11 Feb/12 Feb/13 Feb/14…
  33. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 33
    Permian Basin Horizontal Economics Among the Best in the World Average breakeven oil price (/barrel) Recent transactions for Permian Basin acreage: Delaware Basin 27M per acre Midland Basin 58M per acre PXD Midland HZ…
  34. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 34
    Top 20 Most Active Permian Operators Permian Permian Horizontal Horizontal Rig Count Rig Count at 2016) (End-Q1 end-Q1 18 Permian Horizontal Rig Count (as of end-Q1) 203 Gross Operated 16 Permian Production (MBOEPD) 14 HZ…
  35. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 35
    Permian Resource Perspective Total Recoverable Resource (BBOE)1 0 20 40 60 80 100 120 140 160 Ghawar, Saudi Arabia Permian Basin, USA Produced To Date Midland Basin Delaware Basin Burgan, Kuwait Safaniyah, Saudi Arabia Eagle…
  36. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 36
    Permian Basin Poised For Long-Term Growth The Permian Basin will drive long-term U.S. oil production growth 6 Permian Basin Oil Growth Forecast 2025 (2016 - 2025) 5 MMBOPD 5 Daily Oil Production (MMBOPD) 4 Today 3 2…
  37. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 37
    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…
  38. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 38
    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…
  39. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 39
    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.…
  40. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 40
    Impact of Horizontal Technology in the Midland Basin Midland Basin Spraberry/Wolfcamp Production 1,100,000 1,000,000 900,000 800,000 Spraberry/Wolfcamp production has increased 850,000 BOEPD since 2009 700,000 Production…
  41. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 41
    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…
  42. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 42
    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…
  43. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 43
    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…
  44. Johnson Rice Energy Conference – Pioneer Natural Resources Co. – slide 44
    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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