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1Q 2018 Earnings Presentation – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · May 3, 2018 · 31 slides

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Slides

  1. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 1
    Q1 2018 Earnings May 3, 2018
  2. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 2
    HIGHLIGHTS Q1 2018 adjusted income: 284 MM, or 1.66 per diluted share1 Q1 2018 Permian Basin production: 260 MBOEPD At top end of guidance range of 252 MBOEPD to 260 MBOEPD Increase of 9 MBOEPD, or 3%, vs. Q4 2017 Freezing…
  3. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 3
    HIGHLIGHTS (CONT.) Firm transportation (FT) contracts in place to assure movement of Pioneers increasing volumes of oil and gas production out of the Permian Basin Delivered 160 MBOPD of Permian Basin oil to the Gulf Coast under firm…
  4. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 4
    2018 UPDATE Continuing to operate 20 horizontal rigs in the Permian Basin Expecting to POP 250 - 275 wells during 2018 Drilling the most productive, high-return wells in the Basin Cash operating margins and IRRs continue to be…
  5. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 5
    2018 UPDATE (CONT.) Progressing divestiture process for Eagle Ford, South Texas, Raton and West Panhandle assets, making Pioneer a Permian Basin pure play After all of the divestitures are completed, reported cash operating margins…
  6. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 6
    36 VERSION 3.0+ COMPLETIONS SHOWING STRONG RESULTS Northern Midland Basin: LSS Updated Central Midland Basin: Wolfcamp B Updated Late April Late April Cumulative Production (MBOE)1 500 Version 3.0+: 3 wells 400 Version 3.0+: 12…
  7. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 7
    PERMIAN BASIN PRODUCTION GROWTH FORECAST Permian Basin Net Production 1 MMBOEPD 176 184 MBOPD 266 278 MBOEPD 700 MBOPD 268 - 276 260 224 171 175 - 181 170 148 118 Oil (MBOPD) 2016 2017 Q1 Q2 Q3 Q4 2026E 2018E 8
  8. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 8
    P IONE E R S TE MP LATE FOR E NHA NC ING SHA R E HOLDE R VA LUE FOCUS ON RETURNS: Low-cost, high-return Permian wells underpin increasing corporate returns CAPITAL DISCIPLINE: Capital program within cash flow drives strong…
  9. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 9
    F I R M T R A N S P O RTAT I O N TO T H E G U L F C O A S T I N S U L AT E S P I O N E E R FROM MIDLAND BASIS DIFFERENTIAL Sales Volumes to Gulf Coast (MBOPD)1 160 Gulf Coast Midland 115 Refinery Sales 80 60 89 87 Nederland 55…
  10. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 10
    W E LL P OSITIONE D TO MOV E P E R MIA N G A S P R ODUC T ION 75% of Pioneers Permian Basin net gas production of 216 MMCFPD is sold under firm pipeline contracts to the southern SoCal California market Current uplift of 0.60 per…
  11. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 11
    Q1 2018 EARNINGS SUMMARY Millions Per Diluted (After Tax) Share Net income attributable to common stockholders 178 1.04 Noncash mark-to-market (MTM) derivative losses (136 MM before tax) 106 0.62 Income adjusted for noncash MTM…
  12. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 12
    NEW REVENUE RECOGNITION STANDARD The Company adopted the new revenue recognition standard (Accounting Standards Update No. 2014-09, (ASC 606) Revenue from Contracts with Customers) effective January 1, 2018 Under the new rule, gas…
  13. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 13
    PRICE REALIZATIONS 1 61.64 Realized Prices 52.81 49.05 45.00 45.35 27.53 27.74 24.29 24.71 21.68 3.04 2.86 2.84 2.77 2.59 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Oil…
  14. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 14
    PRODUCTION COSTS 1 (PER BOE) 10.30 9.69 9.70 9.63 Workovers 9.09 0.82 0.59 0.76 Production & Ad 1.02 0.78 Q1 2018 compared to Q4 2017: Valorem Taxes 2.11 2.70 2.19 2.10 2.23 Increase in LOE primarily driven by Gathering,…
  15. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 15
    LIQUIDITY POSITION Net debt at the end of Q1 2018 (reflects cash on hand, including liquid 0.9 B investments, of 1.8 B) Unsecured credit facility availability 1.5 B Net debt-to-book capitalization at the end of Q1 7% Maturities…
  16. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 16
    Q2 2018 GUIDANCE Guidance Daily Production (MBOEPD) Total Corporate 312 322 Permian Basin 268 - 276 Production Costs (/BOE) 10.00 12.00 Exploration & Abandonment ( MM) 20 30 Drilling and Acreage 5 - 10 Personnel and Seismic 15 -…
  17. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 17
    SUPPLEMENTAL SLIDES 18
  18. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 18
    PRODUCTION BY COMMODITY Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Midland Basin Oil (BOPD) 104,703 110,028 126,771 140,260 144,628 Horizontal NGL (BOEPD) 26,709 32,546 37,923 40,895 45,718 Gas (MCFPD) 128,130 150,061 149,286 174,613 179,987…
  19. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 19
    PRODUCTION BY COMMODITY (ASSETS BEING DIVESTED) Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Eagle Ford Oil (BOPD) 7,870 6,279 6,956 9,896 9,010 NGL (BOEPD) 6,800 6,490 6,981 8,280 8,178 Gas (MCFPD) 45,069 39,531 40,775 50,755 48,849 Total…
  20. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 20
    CASH MARGINS BY ASSET Q1 2018 Cash Margin by Asset ( per BOE) Permian Permian Other Total Horizontals Verticals Eagle Ford Assets Company 1 Realized price (ex-derivatives) 48.53 47.32 33.86 23.98 45.11 Production costs1,2…
  21. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 21
    LOW-COST, HIGH-RETURN PERMIAN BASIN HORIZONTAL WELLS UNDERPIN PIONEERS 10-YEAR PLAN Pioneers 2017 Permian Basin Horizontal Low-Cost, High-Return Permian Basin Cost Structure (/BOE) Horizontal Wells 1.54 3.28 19 Grow Cash…
  22. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 22
    1 0 - Y E A R P L A N : S I G N I F I C A N T LY I M P R O V I N G F I N A N C I A L M E T R I C S 1 , 2 , 3 Cash Flow (B) Cash Flow Breakeven Oil Price 11 584 50 40 2.8 2018 2019 2020 2021 2022 2023 2024 2025 2026 2018…
  23. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 23
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 5/1/18 Oil Q2 2018 Q3 2018 Q4 2018 2019 Collars (BPD) 3,000 3,000 3,000 - NYMEX Short Call Price (/BBL) 58.05 58.05 58.05 - NYMEX Put Price (/BBL) 45.00 45.00 45.00 - Three Way…
  24. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 24
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 5/1/18 Ethane Q2 2018 Q3 2018 Q4 2018 2019 Frac Spread (BPD) 1 2,500 2,500 2,500 2,500 MMBTUPD Equivalent 6,920 6,920 6,920 6,920 Price differential to NYMEX (/MMBTU) 1.60 1.60 1.60…
  25. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 25
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 5/1/18 Gas Q2 2018 Q3 2018 Q4 2018 2019 Swaps (MMBTUPD) 1 100,000 100,000 100,000 - NYMEX Price (/MMBTU) 3.00 3.00 3.00 - Three Way Collars (MMBTUPD)1,2 50,000 50,000 50,000 - NYMEX Call…
  26. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 26
    2017 EFFECT OF NEW REVENUE RECOGNITION STANDARD The adoption of ASC 606 was effective January 1, 2018, this chart illustrates the pro forma effect of the accounting change as if ASC 606 had been effective for 2017. Q1 2017 Q2 2017 Q3…
  27. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 27
    SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES EBITDAX and discretionary cash flow (DCF) are disclosed by Pioneer, and reconciled to the generally accepted accounting principle (GAAP) measures of net income and net cash provided by operating…
  28. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 28
    SUPPLEMENTAL EARNINGS PER SHARE INFORMATION The Company uses the two-class method of calculating basic and diluted earnings per share. Under the two-class method of calculating earnings per share, GAAP provides that share and unit-based…
  29. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 29
    SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES Adjusted income excluding noncash MTM derivative losses as presented in the Financial and Operating Highlights slide and in the Q1 2018 Earnings Summary slide, is presented and reconciled to…
  30. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 30
    DEFINITIONS Return on Capital Employed (ROCE) equals net income adjusted for tax-effected interest expense, net noncash MTM derivative gains and losses and other unusual items1 divided by the summation of average equity plus average…
  31. 1Q 2018 Earnings Presentation – Pioneer Natural Resources Co. – slide 31
    COMMON SHARE REPURCHASES The stock purchase program allows for up to 100 million of stock to be repurchased during 2018. Pioneer may repurchase shares from time to time at managements discretion in accordance with applicable securities…

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