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Q3 2018 Earnings – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Nov 7, 2018 · 28 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. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 1
    Q3 2018 Earnings November 7, 2018
  2. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 2
    HIGHLIGHTS Q3 2018 adjusted income: 355 MM, or 2.07 per diluted share1 Q3 2018 Permian Basin production: 288 MBOEPD At top end of guidance range of 278 MBOEPD to 288 MBOEPD Increase of 14 MBOEPD2, or 5%, vs. Q2 2018 Q3 2018…
  3. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 3
    HIGHLIGHTS (CONT.) Benefit from firm transportation (FT) contracts resulted in 200 MM of incremental cash flow in Q3; expecting cash flow uplift of 125 MM in Q4 2018 Delivered 165 MBOPD of Q3 Permian Basin oil to the Gulf Coast under…
  4. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 4
    2018 UPDATE Operating 22 horizontal rigs in the Permian Basin Added two rigs in August; plan to add two in December Expecting to POP 250 - 275 wells during 2018 Cash operating margins and IRRs continue to be strong On track to…
  5. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 5
    2018 UPDATE (CONT.) Divestiture process expected to be completed by year end, resulting in Pioneer becoming a Permian Basin pure play Signed purchase and sale agreement to sell South Texas Sinor Nest oil assets for 132 MM; closing…
  6. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 6
    PERMIAN BASIN PRODUCTION GROWTH FORECAST Permian Basin Net Production 1 MMBOEPD 176 184 MBOPD 266 278 MBOEPD 700 MBOPD 293 - 303 288 2741 2661 224 171 186 188 - 194 175 170 148 118 Oil (MBOPD) 2016 2017 Q1 Q2 Q3…
  7. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 7
    FIR ST SP R A BE R RY A P P R A ISAL ( STA C K BE R RY ) PA D A SUC C E SS 1) Gathered advanced dataset utilizing peer- leading technology and science: 3) Delivered strong well results: Outperforming 100 West Martin Spraberry…
  8. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 8
    VERSION 3.0+ OUTPERFORMANCE IN SUMMARY Version 3.0 and 3.0+ POPs Includes all Version 3.0+ completions POPd 600 through Q3 2018 Updated Mid October Outperforming 35% cumulative outperformance compared to 500 by 35% Version 3.0…
  9. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 9
    PERMIAN MARKETING DRIVES PREMIUM PRICING Permian Oil Oil Exposed to Q3 Oil Prices Marketing Uplift Midland Pricing 189 75.97 MM 72.74 69 0% MM 69.50 Q2 2018 Q3 2018 Firm transportation to the Gulf Coast yielded premium…
  10. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 10
    Q3 2018 EARNINGS SUMMARY Millions Per Diluted (After Tax) Share Net income attributable to common stockholders 411 2.39 Noncash mark-to-market (MTM) derivative gains, net (48 MM) (38) (0.22) Adjusted income excluding noncash MTM…
  11. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 11
    PRICE REALIZATIONS 68.33 Uplift/(detriment) 65.30 due to FT 62.62 53.70 44.48 35.97 28.83 27.53 27.74 24.71 2.80 2.72 2.59 1.97 2.21 Q317 Q417 Q118 Q218 Q318 Q317 Q417 Q118 Q218 Q318 Q317 Q417 Q118 Q218 Q318…
  12. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 12
    PRODUCTION COSTS (PER BOE) 1 10.50 10.30 9.72 9.51 9.18 0.79 0.82 Workovers 1.00 1.00 0.76 2.35 Production & Ad 2.05 2.70 Q3 2018 compared to Q2 2018: Valorem Taxes 2.20 2.80 Decrease in production costs Gathering,…
  13. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 13
    LIQUIDITY POSITION Net debt at the end of Q3 2018 (reflects cash on hand, including liquid 0.6 B investments, of 1.7 B) Unsecured credit facility availability 1.5 B Net debt-to-book capitalization at the end of Q3 2018 5%…
  14. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 14
    Q4 2018 GUIDANCE Permian Basin Specific Guidance Guidance Production (MBOEPD) 293 303 Production Costs (/BOE) 9.00 - 11.00 DD&A (/BOE) 13.00 15.00 Total Company Guidance Exploration & Abandonment ( MM) 20 30 Drilling and Acreage…
  15. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 15
    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 Basin wells underpin increasing corporate returns CAPITAL DISCIPLINE: Capital program within cash flow drives strong…
  16. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 16
    SUPPLEMENTAL SLIDES 17
  17. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 17
    PRODUCTION BY COMMODITY Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Permian Basin Oil (BOPD) 126,771 140,260 144,628 151,083 163,952 Horizontal NGL (BOEPD) 37,923 40,895 45,718 45,342 47,518 Gas (MCFPD) 149,286 174,613 179,987 266,923…
  18. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 18
    PRODUCTION BY COMMODITY (ASSETS BEING DIVESTED) Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Eagle Ford Oil (BOPD) 6,956 9,896 9,010 6,510 5,803 NGL (BOEPD) 6,981 8,280 8,178 6,461 5,125 Gas (MCFPD) 40,775 50,755 48,849 37,952 31,546 Total…
  19. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 19
    CASH MARGINS BY ASSET Q3 2018 Cash Margin by Asset ( per BOE) Permian Permian Other Total Horizontals Verticals Eagle Ford Assets Company Realized price (ex-derivatives) 45.94 46.00 36.41 29.37 44.64 Production costs1 (4.20)…
  20. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 20
    FIR M T R A NSP ORTATION P R OV IDE S C OMP E T IT IV E A DVA NTAGE Sales Volumes to Gulf Coast (MBOPD)1 160 165 165 Gulf Coast Refinery Sales Midland 115 130 80 103 89 87 Nederland Houston Exports Corpus 15 Christi…
  21. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 21
    MA R K E T ING STR ATE G Y DR IV E S A DDIT IONA L C A SH FLOW A ND E NHA NC E S MA R GINS Apr May Jun Jul Aug Sep Oct Nov Dec Cash Flow Uplift Brent/WTI Differentials Locked In 200 MM 2 months prior Quarter Reported Q3 Q4…
  22. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 22
    BENEFITS OF LONG TERM PLANNING IN THE PERMIAN Targas Midland Basin Gas Processing Capacity Targa significantly increasing gas plant 1,750 capacity during Q119 and Q2 19 Capacity of 2019 new-build plants Greater mix of effluent water,…
  23. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 23
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 11/2/18 Oil Q4 2018 2019 Brent Swaps (BPD) - 10,000 Brent Price (/BBL) - 70.00 Brent Three Way Collars (BPD) 1 - 15,000 Brent Call Price (/BBL) - 89.90 Brent Put Price (/BBL) - 75.00…
  24. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 24
    OPEN COMMODITY DERIVATIVE POSITIONS AS OF 11/2/18 Gas Q4 2018 2019 Swaps (MMBTUPD)1 101,348 647 Permian Basin Gas Basis Swaps Q4 2018 2019 NYMEX Price (/MMBTU) 3.00 3.11 Southern California (MMBTUPD)3 66,522 84,932 Three Way…
  25. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 25
    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…
  26. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 26
    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…
  27. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 27
    SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES Adjusted income excluding noncash MTM derivative gains, and adjusted income excluding noncash MTM derivative gains and unusual items, as presented in the Financial and Operating Highlights slide…
  28. Q3 2018 Earnings – Pioneer Natural Resources Co. – slide 28
    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…

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