-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RQJJ449naDYTWmubauofHLaq1XYB6Bdx3X/tUDs7LGQcg4kKlOosk6juLfgTCOfk Kb6JBDbS8AfFWqbGAC7YUQ== 0000950134-02-004152.txt : 20020425 0000950134-02-004152.hdr.sgml : 20020425 ACCESSION NUMBER: 0000950134-02-004152 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020423 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20020425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER NATURAL RESOURCES CO CENTRAL INDEX KEY: 0001038357 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752702753 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13245 FILM NUMBER: 02620285 BUSINESS ADDRESS: STREET 1: 1400 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 9724449001 MAIL ADDRESS: STREET 1: 1400 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 8-K 1 d96299e8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 23, 2002 PIONEER NATURAL RESOURCES COMPANY ----------------------------------- (Exact name of Registrant as specified in its charter) DELAWARE 1-13245 75-2702753 - ------------------------------- ----------- ---------------------- (State or other jurisdiction of Commission (I.R.S. Employer incorporation or organization) File Number Identification Number) 5205 N. O'CONNOR BLVD., SUITE 1400, IRVING, TEXAS 75039 - ------------------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's Telephone Number, including area code : (972) 444-9001 Not applicable ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) PIONEER NATURAL RESOURCES COMPANY TABLE OF CONTENTS
PAGE ---- Item 5. Other Events.......................................................... 3 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits: (c) Exhibits.......................................................... 8 Item 9. Regulation FD Disclosure.............................................. 8 Signatures.................................................................... 10 Exhibit Index................................................................. 11
2 PIONEER NATURAL RESOURCES COMPANY ITEM 5. OTHER EVENTS On April 24, 2002, Pioneer Natural Resources Company ("Pioneer" or the "Company") announced financial and operating results for the quarter ended March 31, 2002. FIRST QUARTER 2002 RESULTS Pioneer reported a net loss of $2.0 million, or $0.02 per share, for the first quarter of 2002. The first quarter net loss included a noncash $5.4 million, or $0.05 per share, charge for the remeasurement of the Argentine peso denominated net monetary assets. Earnings as adjusted for the above items were $3.4 million or $0.03 per share. For the same period last year, Pioneer reported net income of $67.9 million, or $0.68 per diluted share, which included a gain on the sale of assets of $7.3 million, or $0.07 per share, and an $8.8 million, or $0.09 per share, mark-to-market charge related to derivatives not treated as hedges. Cash flow from operations for the 2002 first quarter was $50.0 million compared to $131.7 million for the first quarter of 2001. On March 31, 2002, Pioneer had 104.3 million common shares outstanding. Pioneer issued 11.5 million new shares of common stock on April 22, 2002 under a public offering at $21.50 per share, resulting in approximately $236 million of net proceeds to the Company. On an oil equivalent basis, sales averaged 110,703 barrels per day (BPD). First quarter oil sales averaged 34,541 BPD, natural gas liquid sales averaged 21,539 BPD and gas sales averaged 328 million cubic feet per day (MMcfpd). Realized prices (including the effects of commodity price hedges) for oil and natural gas liquids for the first quarter were $23.17 and $10.73 per barrel, respectively. The realized price for gas was $2.47 per Mcf. First quarter production costs averaged $5.12 per barrel oil equivalent (BOE), decreasing 8% from the prior year quarter, primarily due to lower field fuel and production taxes that are directly related to commodity price changes. Exploration and abandonment costs of $21 million for the quarter included $10 million of geologic and geophysical costs including seismic costs, $1 million of noncash leasehold abandonments including expired leases, and $10 million of exploration costs including $8.6 million related to the expensing of the Turnberry well drilled during the first quarter of 2001. For the same quarter last year, Pioneer reported oil sales of 35,140 BPD, natural gas liquid sales of 20,426 BPD and gas sales of 333 MMcfpd. Realized prices for the 2001 first quarter were $25.03 per barrel for oil, $22.71 per barrel for natural gas liquids and $4.58 per Mcf for gas. OPERATIONS UPDATE Development activities continue in the U.S., Canada and South Africa. Pioneer's "Big 4" development projects are progressing toward first production over the next 13 months as previously announced. Pioneer and its partner, Mariner Energy, Inc., have selected El Paso Energy Partners, L.P. (NYSE:EPN) to construct, install, own and operate the production platform and other facilities associated with the Falcon field discovery in the western deepwater Gulf of Mexico. Pioneer is the operator of the Falcon field with a 75 percent working interest, and the new platform is scheduled to be completed for first production during the first quarter of 2003. Pioneer is evaluating and preparing several prospects on the 24 blocks it holds surrounding the Falcon field for potential drilling later this year. In the central deepwater Gulf of Mexico, an appraisal well is currently being drilled on the Ozona Deep discovery drilled in 2001, and Pioneer plans to drill the Triton prospect near the infrastructure planned for the Devils Tower development during the summer of 2002. Pioneer also plans to drill two appraisal wells on the Company's Olowi Block in Gabon beginning in early May. Onshore Texas, Pioneer is running three rigs and plans to increase its drilling activity in its Spraberry oil and gas field and West Panhandle gas field. Pioneer completed 21 wells in Canada during the 2002 winter drilling season, and daily production from the new wells is anticipated to be approximately 12 Mmcfpd. 3 PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED BALANCE SHEET (in thousands) (Unaudited)
March 31, December 31, 2002 2001 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 16,757 $ 14,334 Accounts receivable 88,862 82,211 Inventories 11,974 14,549 Deferred income taxes 6,400 6,400 Other current assets 43,248 138,149 ------------ ------------ Total current assets 167,241 255,643 ------------ ------------ Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting 3,971,409 3,879,568 Accumulated depletion, depreciation and amortization (1,143,441) (1,095,310) ------------ ------------ 2,827,968 2,784,258 ------------ ------------ Deferred income taxes 84,319 84,319 Other assets, net 83,722 146,833 ------------ ------------ $ 3,163,250 $ 3,271,053 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 100,127 $ 99,165 Interest payable 37,115 37,410 Other current liabilities 76,867 91,634 ------------ ------------ Total current liabilities 214,109 228,209 ------------ ------------ Long-term debt 1,587,853 1,577,304 Other noncurrent liabilities 163,844 166,383 Deferred income taxes 5,633 13,768 Stockholders' equity 1,191,811 1,285,389 ------------ ------------ $ 3,163,250 $ 3,271,053 ============ ============
4 PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) (Unaudited)
Three months ended March 31, ---------------------------- 2002 2001 ------------ ------------ Revenues: Oil and gas $ 165,539 $ 257,986 Interest and other 1,193 5,167 Gain (loss) on disposition of assets, net (74) 7,293 ------------ ------------ 166,658 270,446 ------------ ------------ Costs and expenses: Oil and gas production 51,018 55,802 Depletion, depreciation and amortization - oil and gas 48,237 48,045 Depletion, depreciation and amortization - other 2,151 4,116 Exploration and abandonments 21,120 22,883 General and administrative 11,918 10,448 Interest 26,317 35,616 Other 8,266 25,217 ------------ ------------ 169,027 202,127 ------------ ------------ Income (loss) before income taxes (2,369) 68,319 Income tax (provision) benefit 410 (400) ------------ ------------ Net income (loss) $ (1,959) $ 67,919 ============ ============ Net income (loss) per share: Basic $ (.02) $ .69 ============ ============ Diluted $ (.02) $ .68 ============ ============ Weighted average basic shares outstanding: Basic 104,055 98,379 ============ ============ Diluted 104,055 99,708 ============ ============
5 PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
Three months ended March 31, ---------------------------- 2002 2001 ------------ ------------ Cash flows from operations: Net income (loss) $ (1,959) $ 67,919 Depletion, depreciation and amortization 50,388 52,161 Exploration expenses, including dry holes 18,666 21,847 Deferred income taxes (684) (4,800) (Gain) loss on disposition of assets, net 74 (7,293) Interest related amortization (992) 2,998 Derivative mark-to-market 124 8,753 Other noncash items 12,860 1,806 Changes in operating assets and liabilities: Accounts receivable (13,721) 26,449 Inventories 2,239 1,124 Other current assets (7) (5,954) Accounts payable (14,456) (25,607) Interest payable (295) 720 Other current liabilities (2,201) (8,389) ------------ ------------ Net cash provided by operating activities 50,036 131,734 Net cash used in investing activities (38,772) (88,801) Net cash used in financing activities (8,065) (50,548) ------------ ------------ Net increase (decrease) in cash and cash equivalents 3,199 (7,615) Effect of exchange rate changes on cash and cash equivalents (776) (239) Cash and cash equivalents, beginning of period 14,334 26,159 ------------ ------------ Cash and cash equivalents, end of period $ 16,757 $ 18,305 ============ ============
6 PIONEER NATURAL RESOURCES COMPANY SUMMARY PRODUCTION AND PRICE DATA
Three months ended March 31, ----------------------- 2002 2001 ---------- ---------- Average Daily Production: Oil (Bbls) - U.S. 24,305 24,651 Argentina 10,126 9,646 Canada 110 843 ---------- ---------- Total 34,541 35,140 Natural gas liquids (Bbls) - U.S. 19,919 18,922 Argentina 642 516 Canada 978 988 ---------- ---------- Total 21,539 20,426 Gas (Mcf) - U.S. 215,837 208,678 Argentina 65,119 80,035 Canada 46,780 43,973 ---------- ---------- Total 327,736 332,686 Total Production: Oil (MBbls) 3,109 3,163 Natural gas liquids (MBbls) 1,939 1,838 Gas (MMcf) 29,496 29,942 Equivalent barrels (MBOE) 9,963 9,991 Average Price*: Oil (per Bbl) - U.S. $ 24.27 $ 25.25 Argentina $ 20.61 $ 24.59 Canada $ 17.55 $ 23.83 Average $ 23.17 $ 25.03 Natural gas liquids (per Bbl) - U.S. $ 10.70 $ 22.51 Argentina $ 8.97 $ 27.04 Canada $ 12.41 $ 24.33 Average $ 10.73 $ 22.71 Gas (per Mcf) - U.S. $ 3.05 $ 5.61 Argentina $ .68 $ 1.25 Canada $ 2.27 $ 5.81 Average $ 2.47 $ 4.58
- ---------- * Average prices include the effects of commodity hedges. 7 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits 12.1 Ratio of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends 99.1 News Release dated April 23, 2002 99.2 News Release dated April 24, 2002 ITEM 9. REGULATION FD DISCLOSURE The information in this document includes forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, and the business prospects of Pioneer Natural Resources Company (the "Company"), are subject to a number of risks and uncertainties which may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, international operations and associated international political and economic instability, government regulation or action, litigation, the costs and results of drilling and operations, the Company's ability to replace reserves or implement its business plans, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, and environmental risks. These and other risks are described in the Company's 2001 Annual Report on Form 10-K that is available from the Company or the Securities and Exchange Commission. Within this Current Report on Form 8-K, the following oil and gas terms have specific meanings: "Bbl" means a standard barrel of 42 United States gallons; "MMBtu" means one million British thermal units and is an energy equivalent measure of natural gas; "Mcf" means one thousand cubic feet and is a measure of natural gas volume; and, "NYMEX" means The New York Mercantile Exchange. On April 23, 2002 and April 24, 2002, the Company issued news releases. The news releases are attached hereto as exhibits 99.1 and 99.2 and provide the following information: o a news release dated April 23, 2002 announcing the completion of the Company's public offering of 11.5 million shares of its common stock at $21.50 per share, including 1.5 million shares sold pursuant to the exercise of the underwriters' over-allotment option. The news release also announced that the $236 million of net proceeds from the sale of these shares will be principally used to fund the acquisition of additional interests in the Falcon field and associated assets in the deepwater Gulf of Mexico and for the acquisition of additional working interests and a gathering system in the West Panhandle gas field. Pending these uses of the net proceeds of the shares issued, the Company will pay down its bank line of credit. o a news release dated April 24, 2002 announcing the Company's financial and operating results for the quarter ended March 31, 2002 and the Company's second quarter 2002 outlook based on current expectations. The following table summarizes, as of April 23, 2002, the Company's (i) open oil hedge positions, (ii) open gas hedge positions and (iii) deferred gains and losses on terminated commodity hedges. Deferred gains and losses on terminated commodity hedges will be recognized as increases or decreases to oil and gas revenues during the periods in which the hedges were originally scheduled to mature. 8 PIONEER NATURAL RESOURCES COMPANY SUPPLEMENTAL COMMODITY HEDGE INFORMATION AS OF APRIL 23, 2002 Open Oil Hedge Positions
2002 2003 ---------------------------------- -------- Second Third Fourth Quarter Quarter Quarter -------- --------- --------- DAILY OIL PRODUCTION: SWAPS: Existing Volume (Bbl)............ 8,000 8,000 5,000 2,975 NYMEX price...................... $ 26.35 $ 24.76 $ 24.45 24.02 New Volume (Bbl)................. 6,341 13,000 14,000 10,000 NYMEX price...................... $ 24.59 $ 23.34 $ 23.46 $ 24.13 COLLARS: Volume (Bbl)..................... 6,000 -- -- -- NYMEX price: Ceiling....................... $ 28.61 Floor......................... $ 25.00
Open Gas Hedge Positions
2006 and 2002 2003 2004 2005 2007 ---------------------------------- -------- ------- -------- -------- Second Third Fourth Quarter Quarter Quarter --------- --------- --------- DAILY GAS PRODUCTION: SWAPS: Existing Volume (Mcf)............ 140,000 190,000 190,000 -- 55,000 30,000 -- NYMEX Price* (MMBtu)............. $ 4.35 $ 4.25 $ 4.25 -- $ 3.70 $ 3.70 -- New Volume (Mcf)................. - - - 150,000 50,000 50,000 10,000 NYMEX Price* (MMBtu)............. $ 3.70 $ 3.60 $ 3.70 $ 3.70 COLLARS: Existing Volume (Mcf)............ 20,000 20,000 20,000 -- -- -- -- NYMEX Price* (MMBtu): Ceiling....................... $ 6.00 $ 6.00 $ 6.00 Floor......................... $ 4.50 $ 4.50 $ 4.50 New Volume (Mcf)................. 50,000 83,152 100,000 -- -- -- -- NYMEX Price* (MMBtu): Ceiling....................... $ 3.10 $ 3.20 $ 3.20 Floor......................... $ 2.45 $ 2.50 $ 2.50
Deferred Gains (Losses) on Terminated Commodity Hedges (in thousands)
2002 2003 2004 2005 -------------------------------------- ---------- ---------- ---------- Second Third Fourth Quarter Quarter Quarter ---------- ---------- ---------- OIL** ........ $ 1,640 $ -- $ -- $ -- $ -- $ -- GAS** ........ (11,516) (11,643) (11,643) 72,546 43,230 1,220 ---------- ---------- ---------- ---------- ---------- ---------- $ (9,876) $ (11,643) $ (11,643) $ 72,546 $ 43,230 $ 1,220 ========== ========== ========== ========== ========== ==========
* Approximate, based on historical differentials to index prices. ** Cash has been paid on deferred hedge losses and received on deferred hedge gains except for the following: (i) a $1.6 million receivable for the 2002 oil hedge gains, (ii) a $6.6 million payable for certain 2002 gas hedge losses and (iii) a $1.3 million receivable for certain of the 2003 gas hedge gains. 9 PIONEER NATURAL RESOURCES COMPANY SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PIONEER NATURAL RESOURCES COMPANY Date: April 25, 2002 By: /s/ RICH DEALY -------------------------------------------- Rich Dealy Vice President and Chief Accounting Officer 10 PIONEER NATURAL RESOURCES COMPANY EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ------- ----------- 12.1* Ratio of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends 99.1* News Release dated April 23, 2002 99.2* News Release dated April 24, 2002
- ---------- * filed herewith 11 EX-12.1 3 d96299ex12-1.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1 PIONEER NATURAL RESOURCES COMPANY RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (in thousands, except ratios)
THREE MONTHS YEAR ENDED DECEMBER 31, ENDED ------------------------------------------------------ MARCH 31, 2002 2001 2000 1999 1998 1997 -------------- -------- -------- -------- --------- ----------- Pretax earnings $ (2,369) $107,765 $158,499 $(23,060) $(730,826) $(1,377,563) ----------- -------- -------- -------- --------- ----------- Adjustments: Add fixed charges and preferred stock dividends: Interest expense 26,317 131,958 161,952 170,344 164,285 77,550 Interest capitalized 2,131 5,991 -- -- -- -- Rental expense attributable to interest 495 2,200 2,333 2,300 2,967 1,233 Preferred stock dividends -- -- -- -- -- -- ----------- -------- -------- -------- --------- ----------- Total fixed charges and preferred stock dividends 28,943 140,149 164,285 172,644 167,252 78,783 ----------- -------- -------- -------- --------- ----------- Deduct: Interest capitalized 2,131 5,991 -- -- -- -- Preferred stock dividends -- -- -- -- -- -- ----------- -------- -------- -------- --------- ----------- Total deductions 2,131 5,991 -- -- -- -- ----------- -------- -------- -------- --------- ----------- Adjusted earnings $ 24,443 $241,923 $322,784 $149,584 $(563,574) $(1,298,780) =========== ======== ======== ======== ========= =========== Ratio of earnings to fixed charges 0.84 1.73 1.96 0.87 (3.37) (16.49) =========== ======== ======== ======== ========= =========== Ratio of earnings to fixed charges and preferred stock dividends 0.84 1.73 1.96 0.87 (3.37) (16.49) =========== ======== ======== ======== ========= ===========
- ----------- (1) Earnings were insufficient to cover fixed charges and preferred stock dividends by $4.5 million, $23.1 million, $730.8 million, $1,377.6 million during the quarter ended March 31, 2002 and for the years ended December 31, 1999, 1998 and 1997, respectively. EX-99.1 4 d96299ex99-1.txt NEWS RELEASE DATED APRIL 23, 2002 EXHIBIT 99.1 NEWS RELEASE INVESTOR RELATIONS CONTACT: SUSAN SPRATLEN (972) 444-9001 PIONEER COMPLETES PUBLIC OFFERING OF COMMON STOCK INCLUDING EXERCISE OF OVER-ALLOTMENT OPTION DALLAS, TEXAS, APRIL 23, 2002 -- PIONEER NATURAL RESOURCES COMPANY ("PIONEER")(NYSE:PXD) (TSE:PXD) today announced the completion of the public offering of 11.5 million shares of its common stock at $21.50 per share. Of the 11.5 million shares sold by Pioneer, 1.5 million shares were sold pursuant to the exercise of the underwriters' over-allotment option. The $236 million of net proceeds from the sale of these shares will be principally used to fund the acquisition of additional interests in the Falcon field and associated assets in the deepwater Gulf of Mexico and for the acquisition of additional working interests and a gathering system in the West Panhandle gas field. Pending these uses of the net proceeds, Pioneer will pay down its bank line of credit. The lead managers of the offering were Credit Suisse First Boston, Banc of America Securities LLC, JPMorgan and Lehman Brothers. The co-managers were Deutsche Bank Securities, Wachovia Securities, Friedman Billings Ramsey, Howard Weil, Johnson Rice & Company, L.L.C., Petrie Parkman & Co. and Raymond James. A copy of the prospectus supplement and prospectus relating to the offering may be obtained from the Prospectus Department of Credit Suisse First Boston, Eleven Madison Avenue, New York, NY 10010. Pioneer is a large independent oil and gas exploration and production company with operations in the United States, Canada, Argentina, South Africa, Gabon and Tunisia. Pioneer's headquarters are in Dallas. For more information, visit Pioneer's website at www.pioneernrc.com. Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward- looking statements and the business prospects of Pioneer Natural Resources Company are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, government regulation or action, foreign currency valuation changes, foreign government tax and regulation changes, litigation, the costs and results of drilling and operations, Pioneer's ability to replace reserves, implement its business plans, or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, and environmental risks. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission. EX-99.2 5 d96299ex99-2.txt NEWS RELEASE DATED APRIL 24, 2002 EXHIBIT 99.2 NEWS RELEASE INVESTOR RELATIONS CONTACT: SUSAN SPRATLEN (972) 444-9001 PIONEER REPORTS FIRST QUARTER RESULTS DALLAS, TEXAS, APRIL 24, 2002 -- PIONEER NATURAL RESOURCES COMPANY ("PIONEER")(NYSE:PXD) (TSE:PXD) today announced financial and operating results for the quarter ended March 31, 2002. FIRST QUARTER 2002 RESULTS Pioneer reported a net loss of $2.0 million, or $0.02 per share, for the first quarter of 2002. The first quarter net loss included a noncash $5.4 million, or $0.05 per share, charge for the remeasurement of the Argentine peso denominated net monetary assets. Earnings as adjusted for the above items were $3.4 million or $0.03 per share. For the same period last year, Pioneer reported net income of $67.9 million, or $0.68 per diluted share, which included a gain on the sale of assets of $7.3 million, or $0.07 per share, and an $8.8 million, or $0.09 per share, mark-to-market charge related to derivatives not treated as hedges. Cash flow from operations for the 2002 first quarter was $50.0 million compared to $131.7 million for the first quarter of 2001. On March 31, 2002, Pioneer had 104.3 million common shares outstanding. Pioneer issued 11.5 million new shares of common stock on April 22, 2002 under a public offering at $21.50 per share, resulting in approximately $236 million of net proceeds to the Company. On an oil equivalent basis, sales averaged 110,703 barrels per day (BPD). First quarter oil sales averaged 34,541 BPD, natural gas liquid sales averaged 21,539 BPD and gas sales averaged 328 million cubic feet per day (MMcfpd). Realized prices (including the effects of commodity price hedges) for oil and natural gas liquids for the first quarter were $23.17 and $10.73 per barrel, respectively. The realized price for gas was $2.47 per Mcf. First quarter production costs averaged $5.12 per barrel oil equivalent (BOE), decreasing 8% from the prior year quarter, primarily due to lower field fuel and production taxes that are directly related to commodity price changes. Exploration and abandonment costs of $21 million for the quarter included $10 million of geologic and geophysical costs including seismic costs, $1 million of noncash leasehold abandonments including expired leases, and $10 million of exploration costs including $8.6 million related to the expensing of the Turnberry well drilled during the first quarter of 2001. For the same quarter last year, Pioneer reported oil sales of 35,140 BPD, natural gas liquid sales of 20,426 BPD and gas sales of 333 MMcfpd. Realized prices for the 2001 first quarter were $25.03 per barrel for oil, $22.71 per barrel for natural gas liquids and $4.58 per Mcf for gas. OPERATIONS UPDATE Development activities continue in the U.S., Canada and South Africa. Pioneer's "Big 4" development projects are progressing toward first production over the next 13 months as previously announced. Pioneer and its partner, Mariner Energy, Inc., have selected El Paso Energy Partners, L.P. (NYSE:EPN) to construct, install, own and operate the production platform and other facilities associated with the Falcon field discovery in the western deepwater Gulf of Mexico. Pioneer is the operator of the Falcon field with a 75 percent working interest, and the new platform is scheduled to be completed for first production during the first quarter of 2003. Pioneer is evaluating and preparing several prospects on the 24 blocks it holds surrounding the Falcon field for potential drilling later this year. In the central deepwater Gulf of Mexico, an appraisal well is currently being drilled on the Ozona Deep discovery drilled in 2001, and Pioneer plans to drill the Triton prospect near the infrastructure planned for the Devils Tower development during the summer of 2002. Pioneer also plans to drill two appraisal wells on the Company's Olowi Block in Gabon beginning in early May. Onshore Texas, Pioneer is running three rigs and plans to increase its drilling activity in its Spraberry oil and gas field and West Panhandle gas field. Pioneer completed 21 wells in Canada during the 2002 winter drilling season, and daily production from the new wells is anticipated to be approximately 12 MMcfpd. CHAIRMAN'S COMMENT Scott D. Sheffield, Chairman and CEO stated, "The first quarter of this year was important for Pioneer, as we continue to push forward to first production at Canyon Express and the other Big 4 projects. We are pleased to have completed our equity offering and are excited to have a larger stake and operatorship in the Falcon field and surrounding prospects and look forward to controlling our West Panhandle field operations and development. We are also looking forward to upcoming drilling results at Ozona Deep and the two wells we have planned for Gabon, as they have the potential to be the next projects in the pipeline for 2004 and 2005 growth." FINANCIAL OUTLOOK The following statements are estimates based on current expectations. These forward-looking statements are subject to a number of risks and uncertainties which may cause the Company's actual results to differ materially from the following statements. The last paragraph of this release addresses certain of the risks and uncertainties to which the Company is subject. Second quarter production is expected to average 110 to 115 MBPD on an oil equivalent basis. During the second quarter, lease operating expenses (including production and ad valorem taxes) are expected to average $5.15 to $5.30 per BOE, based on today's NYMEX strip prices for oil and gas. Depreciation, depletion and amortization expense is expected to average $5.00 to $5.20 per BOE. Total exploration and abandonment expense is expected to be $15 million to $30 million. General and administrative expense is expected to be $10 million to $12 million. Interest expense is expected to be $24 million to $26 million and income taxes are expected to be $1 million to $2 million as the Company benefits from the carryforward of prior years' net operating losses in the U.S. and Canada. For the second quarter of 2002, cost incurred is expected to range from $120 to $140 million, excluding the previously announced acquisition costs related to acquiring additional interests in the Falcon field and surrounding exploration blocks. Pioneer's hedges are outlined in Item 9 of the Form 8-K filed today with the Securities and Exchange Commission. EARNINGS CONFERENCE CALL This morning at 10:00 a.m. Eastern, investors will have the opportunity to listen to the first quarter earnings call and view a presentation over the Internet via Pioneer's website located at http://www.pioneernrc.com. At the website, select 'INVESTOR' at the top of the page and then choose 'Webcasts/Earnings Calls'. To listen to the live call, please go to the website at least ten minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available on the website shortly after the call. Alternately, you may dial (800) 262-1292 (confirmation code: 694405) to listen to the conference call and view the accompanying visual presentation at the Internet address above. A telephone replay will be available by dialing (888) 203-1112: confirmation code: 694405. Pioneer is a large independent oil and gas exploration and production company with operations in the United States, Canada, Argentina, South Africa, Gabon and Tunisia. Pioneer's headquarters are in Dallas. For more information, visit Pioneer's website at www.pioneernrc.com. Financial statements attached. Except for historical information contained herein, the statements in this News Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer Natural Resources Company are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, government regulation or action, foreign currency valuation changes, foreign government tax and regulation changes, litigation, the costs and results of drilling and operations, Pioneer's ability to replace reserves, implement its business plans, or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, and environmental risks. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission. PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED BALANCE SHEET (in thousands) (Unaudited)
March 31, December 31, 2002 2001 ----------- ------------ ASSETS Current assets: Cash and cash equivalents $ 16,757 $ 14,334 Accounts receivable 88,862 82,211 Inventories 11,974 14,549 Deferred income taxes 6,400 6,400 Other current assets 43,248 138,149 ----------- ----------- Total current assets 167,241 255,643 ----------- ----------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting 3,971,409 3,879,568 Accumulated depletion, depreciation and amortization (1,143,441) (1,095,310) ----------- ----------- 2,827,968 2,784,258 ----------- ----------- Deferred income taxes 84,319 84,319 Other assets, net 83,722 146,833 ----------- ----------- $ 3,163,250 $ 3,271,053 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 100,127 $ 99,165 Interest payable 37,115 37,410 Other current liabilities 76,867 91,634 ----------- ----------- Total current liabilities 214,109 228,209 ----------- ----------- Long-term debt 1,587,853 1,577,304 Other noncurrent liabilities 163,844 166,383 Deferred income taxes 5,633 13,768 Stockholders' equity 1,191,811 1,285,389 ----------- ----------- $ 3,163,250 $ 3,271,053 =========== ===========
PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) (Unaudited)
Three months ended March 31, ----------------------- 2002 2001 --------- --------- Revenues: Oil and gas $ 165,539 $ 257,986 Interest and other 1,193 5,167 Gain (loss) on disposition of assets, net (74) 7,293 --------- --------- 166,658 270,446 --------- --------- Costs and expenses: Oil and gas production 51,018 55,802 Depletion, depreciation and amortization - oil and gas 48,237 48,045 Depletion, depreciation and amortization - other 2,151 4,116 Exploration and abandonments 21,120 22,883 General and administrative 11,918 10,448 Interest 26,317 35,616 Other 8,266 25,217 --------- --------- 169,027 202,127 --------- --------- Income (loss) before income taxes (2,369) 68,319 Income tax (provision) benefit 410 (400) --------- --------- Net income (loss) $ (1,959) $ 67,919 ========= ========= Net income (loss) per share: Basic $ (.02) $ .69 ========= ========= Diluted $ (.02) $ .68 ========= ========= Weighted average basic shares outstanding: Basic 104,055 98,379 ========= ========= Diluted 104,055 99,708 ========= =========
PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
Three months ended March 31, ----------------------- 2002 2001 --------- --------- Cash flows from operations: Net income (loss) $ (1,959) $ 67,919 Depletion, depreciation and amortization 50,388 52,161 Exploration expenses, including dry holes 18,666 21,847 Deferred income taxes (684) (4,800) (Gain) loss on disposition of assets, net 74 (7,293) Interest related amortization (992) 2,998 Derivative mark-to-market 124 8,753 Other noncash items 12,860 1,806 Changes in operating assets and liabilities: Accounts receivable (13,721) 26,449 Inventories 2,239 1,124 Other current assets (7) (5,954) Accounts payable (14,456) (25,607) Interest payable (295) 720 Other current liabilities (2,201) (8,389) --------- --------- Net cash provided by operating activities 50,036 131,734 Net cash used in investing activities (38,772) (88,801) Net cash used in financing activities (8,065) (50,548) --------- --------- Net increase (decrease) in cash and cash equivalents 3,199 (7,615) Effect of exchange rate changes on cash and cash equivalents (776) (239) Cash and cash equivalents, beginning of period 14,334 26,159 --------- --------- Cash and cash equivalents, end of period $ 16,757 $ 18,305 ========= =========
PIONEER NATURAL RESOURCES COMPANY SUMMARY PRODUCTION AND PRICE DATA
Three months ended March 31, -------------------------- 2002 2001 -------- -------- Average Daily Production: Oil (Bbls) - U.S. 24,305 24,651 Argentina 10,126 9,646 Canada 110 843 -------- -------- Total 34,541 35,140 Natural gas liquids (Bbls) - U.S. 19,919 18,922 Argentina 642 516 Canada 978 988 -------- -------- Total 21,539 20,426 Gas (Mcf) - U.S. 215,837 208,678 Argentina 65,119 80,035 Canada 46,780 43,973 -------- -------- Total 327,736 332,686 Total Production: Oil (MBbls) 3,109 3,163 Natural gas liquids (MBbls) 1,939 1,838 Gas (MMcf) 29,496 29,942 Equivalent barrels (MBOE) 9,963 9,991 Average Price*: Oil (per Bbl) - U.S. $ 24.27 $ 25.25 Argentina $ 20.61 $ 24.59 Canada $ 17.55 $ 23.83 Average $ 23.17 $ 25.03 Natural gas liquids (per Bbl) - U.S. $ 10.70 $ 22.51 Argentina $ 8.97 $ 27.04 Canada $ 12.41 $ 24.33 Average $ 10.73 $ 22.71 Gas (per Mcf) - U.S. $ 3.05 $ 5.61 Argentina $ .68 $ 1.25 Canada $ 2.27 $ 5.81 Average $ 2.47 $ 4.58
- --------------- * Average prices include the effects of commodity hedges. PIONEER NATURAL RESOURCES COMPANY SUPPLEMENTAL INFORMATION (in thousands) (Unaudited) Discretionary cash flow and EBITDAX (as defined below) are presented herein because of their wide acceptance as financial indicators of a company's ability to internally fund exploration and development activities and to service or incur debt. Discretionary cash flow and EBITDAX should not be considered as alternatives to net cash provided by operating activities, net income (loss) or income (loss) from continuing operations, as defined by generally accepted accounting principles. Discretionary cash flow and EBITDAX should also not be considered as indicators of the Company's financial performance, as alternatives to cash flow, as measure of liquidity or as being comparable to other similarly titled measures of other companies.
Three months ended March 31, ----------------------- 2002 2001 --------- --------- DISCRETIONARY CASH FLOWS*: Net income (loss) $ (1,959) $ 67,919 Depletion, depreciation and amortization 50,388 52,161 Exploration and abandonments 21,120 22,883 Deferred income taxes (684) (4,800) (Gain) loss on disposition of assets, net 74 (7,293) Interest related amortization (992) 2,998 Derivative mark-to-market 124 8,753 Other noncash items 12,860 1,806 --------- --------- Discretionary cash flow $ 80,931 $ 144,427 ========= =========
- ---------- * Discretionary cash flows equal cash flows from operations before working capital changes and exploration and abandonments. EBITDAX**: Net income (loss) $ (1,959) $ 67,919 Depletion, depreciation and amortization 50,388 52,161 Exploration and abandonments 21,120 22,883 Consolidated interest expense 26,317 35,616 Consolidated income taxes (410) 400 (Gain) loss on disposition of assets, net 74 (7,293) Derivative mark-to-market 124 8,753 Other noncash expenses 12,860 867 --------- --------- $ 108,514 $ 181,306 ========= =========
- ------------- ** "EBITDAX" represents earnings before depletion, depreciation and amortization expense; impairment of oil and gas properties; exploration and abandonments; consolidated interest expense; consolidated income taxes; gain or loss on the disposition of assets; extraordinary items; derivative mark-to-market adjustments; and, other noncash charges and expenses. -----END PRIVACY-ENHANCED MESSAGE-----