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Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Mar 27, 2017 · 46 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. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 1
    Howard Weil Energy Conference MARCH 28,2017
  2. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 2
    PIONEER AT A GLANCE 32 B 2.8 B 15% - 18% Active Drilling Areas Current 2017 Planned Forecasted Enterprise Capex1 2017 Value 2.4 B Permian Production Growth Raton West Panhandle Spraberry/Wolfcamp Gas Dallas Headquarters…
  3. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 3
    2017 PLAN AND CAPITAL PROGRAM Plan to operate 18 horizontal rigs in the Spraberry/Wolfcamp during 2017 14 rigs in the northern area 4 rigs in the southern Wolfcamp JV area; activity will be focused in the northern portion of the JV…
  4. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 4
    2017 PLAN AND CAPITAL PROGRAM (CONT.) 2017 capital program of 2.8 B Includes 2.5 B for drilling and completions and 275 MM for vertical integration Assumes 5% cost inflation offset by efficiency gains; vertical integration expected…
  5. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 5
    2017 CAPITAL PROGRAM 1 AND CASH FLOW 2017 capital program of 2.8 B Drilling and Completion Capital: 2.5 B 2017 Cash Flow Sensitivity to Forward Commodity Prices ( MM) 2.4 B Spraberry/Wolfcamp2 (95% of total) 5.00 o 1.9 B for…
  6. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 6
    PIONEERS 10-YEAR VISION Targeting to grow production to 1 MMBOEPD in 2026 Reflects organic compound annual production growth of 15%+ drilling high-return wells Growth driven by world-class Spraberry/Wolfcamp asset Vertical…
  7. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 7
    PRODUCTION GROWTH FORECAST 1 MMBOEPD Total Net Production (MBOEPD) 269 - 276 234 242 243-248 239 233 222 204 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2026E 1 52% Oil 70% Oil 2016 2017E1 57% Oil 62% Oil 1) Assumes ethane…
  8. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 8
    LIQUIDITY POSITION Net debt at the end of Q4 2016 (reflects cash on hand, including liquid 0.2 B investments, of 3.0 B1) Unsecured credit facility availability 1.5 B Net debt-to-book capitalization at the end of Q4 2% Paid with…
  9. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 9
    V E R SIO N 3 .0 C OMP LE T IO N S C O N T IN U IN G TO O U T P E R FO R M V E R SIO N 2 .0 C OMP LE T IO N S IN SP R A BE R RY /WO LFC AMP Version 3.0 wells pay out incremental capital cost of 0.5 MM to 1.0 MM in less than 1 year…
  10. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 10
    LOW E R SP R A BE R RY SH A LE W E LLS C O N T IN U E TO DE LIV E R ST R O N G P E R FOR MA NC E Lower Spraberry Shale Updated End Cumulative Production (MBOE)1 350 January Version 2.0 44 wells since mid-2015 300 10 wells in Q4…
  11. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 11
    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 Initial Larger Design Current Frac Design (2013 - 2014) (Mid…
  12. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 12
    C ONT IN U ING TO R E DU C E SP R A BE R RY /WO LFCAM P D R ILLIN G A ND C O M P LE T ION C OST S Drilling & Completion Cost per Perforated Lateral Foot1 (Reflects all wells) Q4 average well cost by interval: WC B 8.5 MM 9,500 1,089…
  13. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 13
    2017 SPRABERRY/WOLFCAMP DRILLING PROGRAM Expect to place 260 horizontal wells on Pioneers Spraberry/Wolfcamp Acreage Position and 2017 Drilling Areas production during 2017 (244 net POPs) Horizontal drilling program continuing to…
  14. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 14
    G A S P R O C E S S I N G A N D V E RT I C A L I N T E G R AT I O N S U P P O RT E X E C U T I O N Gas Processing Pioneers Water Distribution System 2017 spending expected to be 115 MM; includes 70 MM for gathering system…
  15. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 15
    SPRABERRY/WOLFCAMP PRODUCTION FORECAST Spraberry/Wolfcamp Net Production (MBOEPD)1 Q4 production: 188 MBOEPD (69% oil) 222 229 66 wells placed on production in Q4 2016 as expected (64 wells in northern area and 2 wells 171 in the…
  16. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 16
    PLANNING LIMITED 2017 EAGLE FORD SHALE DRILLING PROGRAM Plan to complete 20 wells in the Eagle Ford Shale Includes 9 DUCs that were drilled in late 2015/early 2016 and 11 Pioneers Eagle Ford Shale new wells that will be drilled and…
  17. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 17
    PXD INVESTMENT HIGHLIGHTS U.S. asset base Largest Spraberry/Wolfcamp acreage position (800,000 gross acres) with a low average royalty and low acreage cost basis High oil exposure from substantial resource potential in the…
  18. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 18
    PIONEERS AREAS OF OPERATIONS Current Total Enterprise Value (B) 32 Q4 2016 Production 59% Oil (MBOEPD) 242 2016 Drillbit F&D (/BOE) 9.59 2016 Proved Developed F&D (/BOE) 9.11 2016 Reserve Replacement (%) 232% YE 2016 Proved…
  19. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 19
    PRODUCTION BY COMMODITY BY AREA Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Spraberry/Wolfcamp Oil (BOPD) 92,121 102,016 117,388 120,663 130,236 NGL (BOEPD) 24,701 24,802 27,829 34,631 31,637 Gas (MCFPD) 120,025 132,029 131,847 144,249…
  20. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 20
    PRODUCTION COSTS (PER BOE) Q4 2016 compared to Q3 2016: LOE increase is primarily due to: 11.02 o Repair costs for mechanical issues at Workovers the Fain gas plant in the West 0.60 Production & 9.17 Ad Valorem 1.67 Panhandle…
  21. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 21
    CASH MARGINS BY ASSET Q4 2016 Cash Margin by Asset ( per BOE) Permian Permian Other Total Horizontals Verticals Eagle Ford Assets Company Realized price (ex-hedges) 37.70 35.01 26.31 19.44 33.84 Production costs 1 (1.96)…
  22. Scotia Howard Weil 45th Annual 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…
  23. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 23
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 3/23/17 Oil Q1 2017 Q2 2017 Q3 2017 Q4 2017 2018 Collars (BPD) 6,000 6,000 6,000 6,000 - NYMEX Short Call Price (/BBL) 70.40 70.40 70.40 70.40 - NYMEX Put Price (/BBL) 50.00 50.00 50.00…
  24. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 24
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 3/23/17 Ethane Q1 2017 Q2 2017 Q3 2017 Q4 2017 2018 Collars (BPD)1 3,000 3,000 3,000 3,000 - Mont Belvieu Call Price (/BBL) 11.83 11.83 11.83 11.83 - Mont Belvieu Put Price (/BBL) 8.68 8.68…
  25. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 25
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 3/23/17 Gas Q1 2017 Q2 2017 Q3 2017 Q4 2017 2018 Three Way Collars (MMBTUPD)1,2 190,000 270,000 270,000 300,000 62,300 NYMEX Call Price (/MMBTU) 3.51 3.56 3.56 3.60 3.56 NYMEX Put Price…
  26. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 26
    THREE-WAY COLLARS (40 BY 50 BY 65 EXAMPLE) NYMEX Oil Three-Way Collar Realization 80 Short-Put at Long-Put at Short-Call at 75 40/BBL 50/BBL 65/BBL 70 Potential Opportunity Loss Realized Price (/BBL) 65 Realize NYMEX plus…
  27. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 27
    PIONEERS YEAR-END 2016 PROVED RESERVES 1 Added 205 MMBOE from the drillbit, or 232% of full-year production, at a drillbit F&D cost of 9.59 per BOE2 Reflects successful Spraberry/Wolfcamp horizontal drilling program Year-end 2016…
  28. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 28
    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 (from Geomap) Kerr Devils River…
  29. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 29
    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 1.8 160 Permian Basin Tight 1.6 Oil Production 140 Daily Oil…
  30. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 30
    MIDLAND BASIN PERFORMANCE: PXD - LEADER OF REPEATABLE SUCCESS 220 200 Pioneer Highlights Pioneers: 180 Core acreage position 160 Contiguous leasehold that allows for longer 140 laterals Well Count Scale of operations…
  31. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 31
    PERMIAN BASIN ONLY GROWING OIL SHALE PLAY Permian Basin is the only growing major U.S. oil shale since downturn began 2.5 Nov. 2014 OPEC Decision Permian Basin 2.0 Million Barrels Oil Per Day 1.5 1.0 Eagle Ford…
  32. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 32
    U.S. OIL PRODUCTION Average Monthly Oil Production Weekly Data Monthly Data 10.0 9.5 9.0 8.5 8.0 7.5 MMBOPD 7.0 6.5 6.0 5.5 5.0 4.5 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: EIA 34
  33. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 33
    PERMIAN HORIZONTAL RIG COUNT 400 Peak: 349 350 300 Feb 17: 260 +125% vs bottom 250 200 150 100 Bottom: 116 50 0 Feb-11 Sep-11 Mar-12 Oct-12 May-13 Dec-13 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16 Source: Baker Hughes rig count data…
  34. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 34
    DRILLING RIG ADDITIONS DIRECTED TO PERMIAN Basin Rig Count 160 Permian Basin Delaware 140 Midland 120 100 80 Eagle Ford 60 Cana Woodford 40 Williston 20 0 Source: Baker Hughes rig count data as of 2/17/2017 36
  35. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 35
    PERMIAN BASIN: INCREASING RIG COUNT MARKET SHARE % U.S. Horizontal Oil Rigs By Basin 100% Williston 90% 80% 70% Permian Basin 50% 60% 15% 50% Other 40% 30% 20% Eagle Ford 10% Woodford 0% Feb/11 Feb/12 Feb/13…
  36. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 36
    PERMIAN BASIN HORIZONTAL ECONOMICS AMONG THE BEST IN THE WORLD Average breakeven oil price (/barrel) Recent transactions for Permian Basin acreage: Delaware Basin 49M per acre Midland Basin 58M per acre PXD Midland HZ…
  37. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 37
    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…
  38. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 38
    PERMIAN BASIN POISED FOR LONG -TERM GROWTH The Permian Basin will drive long-term U.S. oil production growth 6 2025 Permian Basin Oil Growth Forecast 5 MMBOPD (2016 - 2025) Daily Oil Production (MMBOPD) 5 4 3 Today…
  39. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 39
    WOLFCAMP DEPOSITIONAL MODEL MIDLAND BASIN Platform Carbonate Land Platform Shelf Edge Carbonate Pelagic Sediments Carbonate Clastic Detrital Slope Sediments & Reef Talus Fluvial - Deltaic Silt Cloud in Suspension Midland…
  40. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 40
    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 D…
  41. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 41
    MIDLAND BASIN: STACKED PLAY POTENTIAL Midland Basin Clear Fork Delta log R (excess electrical resistance) Red intervals indicate hydrocarbons U. Spraberry M. Spraberry Petrophysical analysis indicates significantly more oil in…
  42. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 42
    IMPACT OF HORIZONTAL TECHNOLOGY IN THE MIDLAND BASIN Midland Basin Spraberry/Wolfcamp Production 1,200,000 1,100,000 1,000,000 900,000 Spraberry/Wolfcamp production has 800,000 increased 900,000 BOEPD since 2009…
  43. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 43
    MIDLAND BASIN HORIZONTAL RESOURCE POTENTIAL 75 BBOE Recoverable Resource Potential Spraberry Wolfcamp D Shales Wolfcamp C 13 BBOE 14 BBOE 2 BBOE Wolfcamp A Wolfcamp B 19 BBOE 27 BBOE 75 BBOE recoverable resource…
  44. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 44
    DR ILLING R E SULTS CONFIR MING P IONE E R S MIDLA ND BA SIN SW E E T SP OT 2014 RSEG Research Report PXD Wolfcamp B Prospectivity Map (Early 2013) Wolfcamp (All Zones) Test Rates Higher Tier 1 Tier 2 Pioneer Land Pioneer…
  45. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 45
    CRUDE PIPELINE CAPACITY TO GULF COAST Major Permian Crude Pipeline Takeaway Operator Origin Destination Pipeline Capacity (BOPD) Plains Permian Cushing Basin 450,000 Cushing Oxy Permian Cushing Centurion 75,000 Sunoco Permian GC West…
  46. Scotia Howard Weil 45th Annual Energy Conference – Pioneer Natural Resources Co. – slide 46
    SPRABERRY/WOLFCAMP MIDSTREAM INFRASTRUCTURE Gas Processing Pipeline NGL Takeaway to Mont Belvieu Targa System Chaparral & West Texas PXD has 27% interest Pipelines Current capacity: 855 MMCFD1 Martin County / PXD production…

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