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4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Feb 14, 2019 · 33 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. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 1
  2. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 2
    Creating Differentiated Value 9% ROCE in 2018 1 increase from 4% in 2017 Focus on +458 MM Cash Flow Uplift from firm transportation (FT) agreements in 2018 88% Cash Flow Increase over 20172 Permian Streamlining Portfolio…
  3. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 3
    Successful 2018 Lays Foundation for Strong 2019 Permian Permian Firm Permian Lease Cash Flow Net Debt Oil Production BOE Production1 Transportation Operating Growth2 to EBITDAX3 Uplift Expense 194 302 173 MM 4.11/BOE 38% 0.3x…
  4. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 4
    Low Cost of Supply Underpins Strong Returns Through Cycles Pioneers 2018 Midland Basin Horizontal Cost Structure (/BOE) Low fully-burdened cost structure generates 23 strong margins Advantaged cost structure coupled with Brent-…
  5. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 5
  6. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 6
    Improving Capital Efficiency 11% Decrease in D,C & F Capital Delivers 12% -17% Growth in Production 3.3 B 2.95 B 2018 D,C & F Capital Pressure Pumping Sand1 Water & Efficiency Activity 2019 D,C & F Capital2 Offsetting…
  7. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 7
    Enhancing Shareholder Value Focus on Returns - Low-cost, high-return Permian Basin wells underpin increasing corporate returns Capital Discipline - Capital spending within cash flow while maintaining strong production growth…
  8. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 8
    Industry-Leading Acreage Cost Basis FOCUS ON RETURNS 100,0000 Permian Basin Acquisitions (Late 2016 - Present)3 90,000 2018 ROCE 80,000 9% 70,000 PIONEERS AVERAGE COST BASIS OF 6% 60,000 500/ACRE 50,000 Peer…
  9. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 9
    Capital Discipline: Growth within Cash Flow CAPITAL DISCIPLINE 2019 Sources and Uses of Cash Cash on Hand Return of Capital Share & to Shareholders Repurchases, Free Cash Flow Cash on Hand & Investments Cash Flow D,C & F…
  10. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 10
    Priorities Aligned with Shareholders RETURN OF CAPITAL 1.9% Total Shareholder Yield 1 Increasing Dividend 328 Million 0.35 Executed2 0.30 0.25 700% Increase in Dividend 0.20 0.15 2 Billion 0.10 Authorized 0.05…
  11. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 11
    Maintaining Low Leverage PRESERVE STRONG BALANCE SHEET Balance Sheet Strength1,2 (bubble size represents market cap) 3 Net debt at YE 2018 of 0.9 B 2.5 (reflects cash on hand, including liquid investments, of 1.4 B) 2 Low…
  12. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 12
    Unmatched Footprint in World Class Asset HIGHLY REPEATABLE PROGRAM Well Productivity by Year 200 Updated late January 150 100 2018 2017 50 PERMIAN 2016 2015 0 0 30 60 90 120 150 180 Days on Production Sources:…
  13. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 13
    Delivering Best-in-Class Oil Production Total Permian Oil Mix (2 Stream) 1,2 Cumulative Oil Production2,3 200 75% PXD 160 65% Peers 120 55% 80 40 45% 1 2 3 4 5 6 7 8 9 10 11 12 Peer 1 Peer 2 Peer 3 Peer 4…
  14. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 14
    Operations Update Second Stackberry pad successful; Two Stackberry projects de-risking a further 40,000 acres to spud late in 2019 140 Midland County Stackberry Outperforming by 34% 2-Well Wolfcamp D pad POPd 8 wells (2 Middle…
  15. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 15
  16. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 16
    Environmental, Social & Governance Environmental: Reducing emissions through extensive Leak Detection and Repair (LDAR) program Greater mix of effluent, reuse and brackish water decreases dependence on fresh water Social: Proactive…
  17. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 17
    Long-Term Planning Benefitting Bottom Line 2018 Oil Pricing Realizations Oil Exposed to Brent Pricing PXD Realized Price1 64 Permian Peers2 Midland Pricing 90% Through 2021 MIDLAND Nederland Houston 57 58 Corpus…
  18. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 18
    A Commitment to Driving Results Focus on Capital Return of Preserve Highly Returns Discipline Capital Strong Repeatable Low-cost, Capital spending Free cash flow Balance Sheet Program high-return within cash flow generation leads…
  19. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 19
  20. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 20
    Q4 2018 Summary Q4 2018 Earnings Q4 2018 Guidance vs. Results Millions Per Diluted Permian Basin Specific Guidance Guidance Results of Operations (After Tax) Share Daily Production (MBOEPD) 293-303 302 Net income attributable to…
  21. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 21
    Q1 2019 Guidance Permian Basin Guidance Total Company Guidance Production (MBOEPD) 302 - 317 Exploration & Abandonment ( MM) 20 - 30 Oil Production (MBOPD) 194 - 204 G&A ( MM) 95 - 100 Production Costs (/BOE) 8.50 - 10.50 Interest…
  22. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 22
    Price Realizations 68.33 65.30 62.62 Uplift due to FT 59.16 53.70 35.97 27.74 28.83 27.53 26.88 2.72 2.59 1.97 2.21 1.75 Q417 Q118 Q218 Q318 Q418 Q417 Q118 Q218 Q318 Q418 Q417 Q118 Q218 Q318 Q418 Oil (/BBL)…
  23. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 23
    Production Costs (Per BOE) 10.50 10.30 9.18 0.82 0.79 9.51 Q4 2018 compared to Q3 2018: 8.70 1.00 Workovers 0.76 2.35 1.07 Decrease in production costs Production and Ad 2.70 primarily attributable to 2.20 2.80 Valorem Taxes…
  24. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 24
    Production By Commodity Q417 Q118 Q218 Q318 Q418 Oil (BOPD) 140,260 144,628 151,083 163,952 171,988 Permian Basin Horizontal NGL (BOEPD) 40,895 45,718 45,342 47,518 50,813 Gas (MCFPD) 174,613 179,987 266,923 254,242 271,147 Total…
  25. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 25
    Cash Margin By Asset Q4 2018 Cash Margin by Asset (/BOE) Permian Permian Eagle Other Total Horizontals Verticals Ford Assets Company Realized price 38.22 39.45 34.45 35.11 38.16 (ex-derivatives) Production costs1 (3.90) (26.92)…
  26. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 26
    Liquidity Position Net debt at the end of Q4 2018 (reflects cash on hand, including liquid investments, of 1.4 B) 0.9 B Unsecured credit facility availability 1.5 B Net debt-to-book capitalization at the end of Q4 2018 7%…
  27. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 27
    Permian Basin Year End 2018 Proved Reserves 1 Added 304 MMBOE in the Permian Basin, or 290% of full-year Year-End 2018 Proved Reserves Permian production, at a drillbit finding and development (MMBOE) cost of 11.77 per BOE2 Permian…
  28. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 28
    Supplemental Earnings Per Share Information The Company uses the two-class method of calculating basic The following table is a reconciliation of the Company's net income attributable and diluted earnings per share. Under the two class…
  29. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 29
    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…
  30. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 30
    Supplemental Non-GAAP Financial Measures Adjusted loss excluding noncash MTM derivative gains, and adjusted income excluding noncash MTM derivative gains and unusual items, as presented in the Q4 2018 Summary Millions Per Diluted…
  31. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 31
    Return on Capital Employed (ROCE) is a non-GAAP financial measure. As used by Pioneer, ROCE is net income adjusted for tax-effected interest expense, noncash MTM derivative gains and other unusual items divided by the summation of average…
  32. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 32
    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…
  33. 4Q 2018 Earnings and 2019 Outlook – Pioneer Natural Resources Co. – slide 33
    Common Share Repurchases Under the stock repurchase program, the Company may repurchase shares from time to time at managements discretion in accordance with applicable securities laws, including through open market transactions,…

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