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Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Nov 15, 2018 · 37 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. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 1
    Global Energy Conference Bank of America Merrill Lynch NOVEMBER 15, 2018
  2. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 2
    PIONEER AT A GLANCE Permian pure play (post divestitures) Midland Basin Largest Midland Basin acreage position with Oil 65% 288 Gas decades of oil drilling inventory MBOEPD 16% Q3 2018 750,000 gross acres NGL 20,000 drilling…
  3. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 3
    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…
  4. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 4
    2018 UPDATE (CONT.) Continuing to progress divestiture process; Pioneer to become a Permian Basin pure play Signed purchase and sale agreement to sell South Texas Sinor Nest oil assets for 132 MM; closing expected in Q4 Closed…
  5. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 5
    ANNOUNCED CAPITAL REDUCTION INITIATIVES Closing Brady sand mine to transition to 100% West Texas sand by mid year 2019 (announced November 15th, 2018) Expecting to wind down operations during the first quarter of 2019 Transitioning…
  6. Global Energy Conference Bank of America Merrill Lynch 2018 – 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. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 7
    FIRST SPRABERRY APPRAISAL (STACKBERRY) PAD A SUCCESS 1) Gathered advanced dataset utilizing peer- leading technology and science: 3) Delivered strong well results: Outperforming 100 West Martin Spraberry Appraisal: by 35%…
  8. Global Energy Conference Bank of America Merrill Lynch 2018 – 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. Global Energy Conference Bank of America Merrill Lynch 2018 – 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. Global Energy Conference Bank of America Merrill Lynch 2018 – 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 11 Source:…
  11. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 11
    NORTH AMERICAN SHALE PLAY OIL BREAKEVENS BY COMPANY 50 Breakeven Oil Price (/BBL) 40 30 20 10 - Pioneers world-class Midland Basin acreage position drives industry leading breakeven oil price Source: Citi Research…
  12. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 12
    PIONEERS TEMPLATE FOR ENHANCING SHAREHOLDER VALUE FOCUS ON RETURNS: Low-cost, high-return Permian Basin wells underpin increasing corporate returns CAPITAL DISCIPLINE: Capital program within cash flow drives strong production…
  13. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 13
    SUPPLEMENTAL SLIDES 14
  14. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 14
    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%…
  15. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 15
    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…
  16. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 16
    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…
  17. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 17
    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,…
  18. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 18
    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)…
  19. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 19
    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…
  20. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 20
    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…
  21. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 21
    FIRM TRANSPORTATION PROVIDES COMPETITIVE ADVANTAGE 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 Q3 '17 Q4 '17 Q1…
  22. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 22
    MARKETING STRATEGY DRIVES ADDITIONAL CASH FLOW AND ENHANCES MARGINS 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 Quarterly reported cash…
  23. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 23
    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,…
  24. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 24
    PIONEERS YEAR-END 2017 PROVED RESERVES 1 Added 314 MMBOE from the drillbit, or 309% of full-year production, 2 at a drillbit F&D cost of 8.46 per BOE Reflects successful Permian Basin and Eagle Ford horizontal drilling program…
  25. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 25
    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: 1,255 MMCFPD1 Martin County Pipelines PXD…
  26. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 26
    PIONEERS FOCUS ON INNOVATION AND TECHNOLOGY WILL DRIVE FURTHER EFFICIENCIES IN THE PERMIAN BASIN New technology initiatives are focused on improving productivity 4-D fracture propagation modeling Machine learning and artificial…
  27. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 27
    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 Pioneers…
  28. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 28
    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 Safaniyah, Saudi Arabia…
  29. Global Energy Conference Bank of America Merrill Lynch 2018 – 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 (from Geomap) Kerr Devils River…
  30. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 30
    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…
  31. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 31
    REGIONAL CROSS SECTION D -D 14 horizontal play intervals identified (so far) Successful Horizontal Wells in the Play 10 intervals have been tested successfully Future Horizontal Play 4 additional intervals remain to be tested North…
  32. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 32
    IMPACT OF HORIZONTAL DRILLING IN THE MIDLAND BASIN 2.0 1.9 1.8 1.7 1.6 Midland Basin production has increased 1.5 1.4 1.7 MMBOEPD since 2009 1.3 Hz 1.2 1.1 1.0 MMBOEPD 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1…
  33. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 33
    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 3.5 160 3.0 Permian Basin 140 Daily Oil Production (MMBOPD)…
  34. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 34
    PERMIAN BASIN CONTINUES TO GROW Permian Basin is the only continuously growing major U.S. oil shale since downturn began 3.5 Permian Basin 3.0 Nov. 2014 OPEC Decision Million Barrels Oil Per Day 2.5 2.0 1.5 Eagle…
  35. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 35
    HORIZONTAL OIL RIG COUNT Peak: 1,115 10/26/18: 773 +213% vs. bottom U.S. 10/26/18: 436 +276% vs. bottom Previous Peak: 349 Bottom: 247 Permian Bottom: 116 The Permian Basin is operating more horizontal oil rigs…
  36. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 36
    DEFINITIONS AND SUPPLEMENTAL INFORMATION Capital Expenditures equal the Companys planned capital budget for any year excluding acquisitions, asset retirement obligations, capitalized interest, geological and geophysical G&A and IT…
  37. Global Energy Conference Bank of America Merrill Lynch 2018 – Pioneer Natural Resources Co. – slide 37
    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…

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