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June 2018 Investor Presentation – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Jun 4, 2018 · 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. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 1
    Investor Presentation JUNE 2018
  2. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 2
    PIONEER AT A GLANCE Permian pure play (post divestitures) Midland Basin Largest Midland Basin acreage position with decades of oil drilling inventory Oil 65% 260 Gas 750,000 gross acres MBOEPD 14% Q1 2018 20,000 drilling…
  3. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 3
    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…
  4. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 4
    2018 UPDATE (CONT.) 2018 capital spending to be funded from forecasted cash flow of 3.2 B (assumes oil price of 66/BBL and gas price of 2.80/MCF for the remainder of the year) 2018 capital budget of 2.9 B expected to be increased…
  5. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 5
    2018 UPDATE (CONT.) Progressing divestiture process for Eagle Ford Shale, South Texas, Raton and West Panhandle assets, making Pioneer a Permian pure play Closed sale of 10,200 net acres in the Eagle Ford Shale for 103 MM After all…
  6. June 2018 Investor 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. June 2018 Investor 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. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 8
    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…
  9. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 9
    WELL POSITIONED TO MOVE PERMIAN GAS PRODUCTION 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 MCF Midland…
  10. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 10
    OIL BREAKEVENS BY SHALE PLAY IN THE U.S. Breakeven Oil Price (/BBL) 60 50 40 30 20 10 - Permian Basin considered among the top oil shale plays in North America with a breakeven oil price of less than 30/BBL Source:…
  11. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 11
    NORT H A ME R ICA N SHA LE P LAY OIL BR E A K E VE NS BY C OMPA NY 50 Breakeven Oil Price (/BBL) 40 30 20 10 - Pioneers world-class Midland Basin acreage position drives industry leading breakeven oil price…
  12. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 12
    L O W - C O S T, H I G H - R E T U R N P E R M I A N B A S I N H O R I Z O N TA L W E L L S UNDERPIN PIONEERS 10-YEAR PLAN Pioneers 2017 Permian Basin Horizontal Low-Cost, High-Return Permian Basin Cost Structure (/BOE) Horizontal…
  13. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 13
    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…
  14. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 14
    SUPPLEMENTAL SLIDES 15
  15. June 2018 Investor 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. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 16
    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…
  17. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 17
    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…
  18. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 18
    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…
  19. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 19
    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…
  20. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 20
    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,…
  21. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 21
    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…
  22. June 2018 Investor 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. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 23
    PIONEERS YEAR-END 2017 PROVED RESERVES 1 Added 314 MMBOE from the drillbit, or 309% of full-year production, at a drillbit F&D cost of 8.46 per BOE2 Reflects successful Permian Basin and Eagle Ford horizontal drilling program Permian…
  24. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 24
    C O N T I N U I N G TO B U I L D O U T P E R M I A N B A S I N I N F R A S T R U C T U R E A N D V E RT I C A L I N T E G R AT I O N Tank Battery/Saltwater Disposal (SWD) Facilities/Below-Grade Cellars Tank Battery/SWD Expect to spend…
  25. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 25
    DERIVATIVE PHILOSOPHY Continue to use derivatives to mitigate commodity price exposure in order to support funding for development programs and to maintain strong financial position Continue to use a variety of derivative…
  26. June 2018 Investor Presentation – 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. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 27
    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…
  28. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 28
    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…
  29. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 29
    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…
  30. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 30
    MIDLAND BASIN MIDSTREAM INFRASTRUCTURE Gas Processing Pipeline NGL Takeaway Targa System to Mont Belvieu PXD has 27% interest Chaparral & West Texas Sale Ranch / Current capacity: 855 MMCFPD1 Martin County Pipelines PXD production…
  31. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 31
    P I O N E E R S F O C U S O N I N N O VAT I O N A N D T E C H N O L O G Y W I L L D R I V E F U RT H E R E F F I C I E N C I E S I N T H E P E R M I A N B A S I N New technology initiatives are focused on improving productivity 4-D…
  32. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 32
    BENEFITS OF WATER REUSE VS. DISPOSAL Treatment & Blending SWD Existing Tank Battery Water Disposal Facility Tank Battery Water Reuse Storage Pond Produced Water Produced Water for Water Disposal Water Completion…
  33. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 33
    CASING DESIGN COMPARISON 3-String 4-String 13 3/8 Surface Casing 13 3/8 Surface Casing Water Disposal Zone 9 5/8 Intermediate Casing 9 5/8 Intermediate Casing (Higher Pressures) Clearfork - Spraberry (Lower Pressures) 7 5/8…
  34. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 34
    PERMIAN BASIN TAKES THE GLOBAL STAGE 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 U.S. hits all time high…
  35. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 35
    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…
  36. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 36
    U.S. LARGEST SHALE PLAYS Permian Basin Petrophysical analysis indicates significantly more oil in place in the Wolfcamp and Spraberry Shale intervals in the Midland Basin Permian compared to other major U.S. shale oil plays…
  37. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 37
    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…
  38. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 38
    IMPACT OF HORIZONTAL DRILLING IN THE MIDLAND BASIN Midland Basin production has increased 1.3 MMBOEPD since 2009 MMBOEPD Hz From 2009 to 2012, production growth primarily attributable to increased vertical activity Post…
  39. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 39
    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 2.5 160 Permian Basin Oil Production 140 Daily Oil Production…
  40. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 40
    PERMIAN BASIN CONTINUES TO GROW Permian Basin is the only continuously growing major U.S. oil shale since downturn began 3.0 Permian Nov. 2014 Basin OPEC Decision 2.5 Million Barrels Oil Per Day 2.0 1.5 Eagle Ford…
  41. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 41
    HORIZONTAL OIL RIG COUNT 1,200 Peak: 1,115 1,000 800 U.S. 1/26/18: 662 +168% vs. bottom 600 1/26/18: 385 Previous +232% vs. bottom 400 Peak: 349 Bottom: 247 200 Permian Bottom: 116 0 Jun-11 Dec-11 Jun-12 Dec-12…
  42. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 42
    DEFINITIONS AND SUPPLEMENTAL INFORMATION 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…
  43. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 43
    RESERVES AUDIT, F&D COSTS AND RESERVE REPLACEMENT An audit of proved reserves follows the general principles set forth in the standards pertaining to the estimating and auditing of oil and gas reserve information promulgated by the…
  44. June 2018 Investor Presentation – Pioneer Natural Resources Co. – slide 44
    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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