-----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, LEXpGicY9i4GWogOt/A4jAuFfDybtwpVBlYdCnQgGDQGNgm4a+FcTY4ut6vISOCS KSZeR0rLFEztoC2HHEpfLw== 0001038357-04-000016.txt : 20040507 0001038357-04-000016.hdr.sgml : 20040507 20040507124726 ACCESSION NUMBER: 0001038357-04-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040507 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040507 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: 04787920 BUSINESS ADDRESS: STREET 1: 900 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 9724449001 MAIL ADDRESS: STREET 1: 900 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 8-K 1 may07er04.txt PIONEER 3/31/04 EARNINGS RELEASE 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): May 7, 2004 Pioneer Natural Resources Company ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware 1-13245 75-2702753 - ---------------------------- ------------- ------------------ (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 5205 N. O'Connor Blvd., Suite 900, Irving, Texas 75039 - ------------------------------------------------ ----------- (Address of principal executive offices) (Zip Code) (972) 444-9001 ---------------------------------------------------- (Registrant's telephone number, including area code) Not applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) PIONEER NATURAL RESOURCES COMPANY TABLE OF CONTENTS Page Item 7. Financial Statements and Exhibits (c) Exhibits........................................... 3 Item 12. Results of Operations and Financial Condition........... 3 Signature......................................................... 4 Exhibit Index..................................................... 5 2 PIONEER NATURAL RESOURCES COMPANY Item 7. Financial Statements and Exhibits (c) Exhibits 99.1 News Release and Schedules Attached to News Release dated May 7, 2004 Item 12. Results of Operations and Financial Condition 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, 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, environmental and weather risks, acts of war or terrorism. These and other risks are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that are available from the Company or the Securities and Exchange Commission. On May 7, 2004, the Company issued a news release with financial statements and schedules that are attached hereto as exhibit 99.1. In the news release, the Company announced financial and operating results for the quarter ended March 31, 2004, provided an operations update and provided the Company's second quarter 2004 financial outlook based on current expectations. 3 PIONEER NATURAL RESOURCES COMPANY S I G N A T U R E 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: May 7, 2004 By: /s/ Richard P. Dealy ----------------------------------------- Richard P. Dealy Vice President and Chief Accounting Officer 4 PIONEER NATURAL RESOURCES COMPANY EXHIBIT INDEX Exhibit No. Description 99.1 (a) News Release and Schedules Attached to News Release dated May 7, 2004 - ------------- (a) filed herewith 5 EX-99 2 may07er0499.txt PIONEER 3/31/04 EARNINGS RELEASE EXH. 99.1 EXHIBIT 99.1 NEWS RELEASE Investor Relations Contact: Susan Spratlen (972) 444-9001 Pioneer Reports Record Production and First Quarter 2004 Results Dallas, Texas, May 7, 2004 -- Pioneer Natural Resources Company ("Pioneer") (NYSE:PXD) today announced financial and operating results for the quarter ended March 31, 2004. Pioneer reported net income of $60.2 million, or $0.50 per diluted share, for the first quarter of 2004. For the same period last year, Pioneer reported net income of $84.2 million, or $0.71 per diluted share, which included a $15.4 million, or $0.13 per share, benefit from the cumulative effect of change in accounting principle related to the adoption of Statement of Financial Accounting Standards No. 143. Cash flow from operations for the first quarter was $253.6 million compared to $136.8 million for the same period in 2003. The Company reduced long-term debt by $98.8 million during the first quarter of 2004 to $1.46 billion. First quarter oil and gas sales averaged 185,858 barrels per day (BPD) on a barrel oil equivalent (BOE) basis and represented a new record for Pioneer. First quarter oil sales averaged 47,733 BPD, an increase of 54% as compared to the same period last year, and natural gas liquids sales averaged 23,406 BPD. Gas sales in the first quarter averaged 688 million cubic feet per day (MMcfpd), a 54% increase over the same period last year. Realized prices for oil and natural gas liquids for the quarter were $28.31 and $22.21 per barrel, respectively. The realized price for gas was $4.41 per thousand cubic feet (Mcf), while North American gas prices averaged $5.04 per Mcf. First quarter production costs averaged $5.27 per BOE. Exploration and abandonment costs of $80.5 million for the quarter included $21.8 million of geologic and geophysical expenses including seismic costs and $4.2 million of noncash leasehold abandonments. For the same quarter last year, Pioneer reported oil sales of 31,894 BPD, natural gas liquids sales of 22,033 BPD and gas sales of 447 MMcfpd. Realized prices for the 2003 first quarter were $25.82 per barrel for oil, $22.00 per barrel for natural gas liquids and $4.16 per Mcf for gas. Operations Update In January, Pioneer achieved first production from the Harrier gas field in the deepwater Gulf of Mexico and from the Hawa oil field onshore Tunisia. The deepwater Gulf of Mexico Devils Tower field achieved first oil production in early May and the Company recently drilled a discovery well on its Goldfinger prospect, the second satellite discovery to the field. Goldfinger and Triton, the first satellite discovery, are expected to be jointly developed via subsea tieback to the Devils Tower spar for first production in 2005. Two deepwater development projects in the Falcon corridor, Tomahawk and Raptor, are proceeding on schedule with first production anticipated during the second quarter. Onshore development continues with ten onshore rigs running in the U.S. and five rigs running in Argentina. During the first quarter, Pioneer drilled 61 wells in the U.S., 44 wells in Canada and 12 wells in Argentina. In early April, Pioneer also acquired additional interests in the Spraberry field in West Texas, expanding its inventory of drilling locations. In Argentina, Pioneer's drilling activities continue to confirm the presence of significant deep gas reserves. First quarter gas production from Argentina was the highest summer production in the Company's history, and Pioneer expects to complete the expansion of its Loma Negra gas plant over the next few months, increasing plant capacity by 25% as demand peaks during the winter months in Argentina. The Company is also acquiring additional 3-D seismic in support of future drilling plans. Commercialization plans are progressing for existing discoveries in Gabon, Alaska, South Africa and the deepwater Gulf of Mexico. 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 2004 production is expected to average 180,000 to 195,000 BOEs per day, reflecting the incremental production expected from Devils Tower, Tomahawk and Raptor, the variability of oil cargo shipments in Tunisia and South Africa, and the seasonal increase in gas demand during Argentina's winter season. Second quarter lease operating expenses (including production and ad valorem taxes) are expected to average $5.20 to $5.70 per BOE based on current NYMEX strip prices for oil and gas. Depreciation, depletion and amortization expense is expected to average $8.00 to $8.50 per BOE as a greater proportion of the Company's production is being produced from higher-cost basis deepwater Gulf of Mexico and South Africa properties. Total exploration and abandonment expense is expected to be $25 million to $50 million. General and administrative expense is expected to be $16 million to $18 million. Interest expense is expected to be $20 million to $23 million and accretion of discount on asset retirement obligations is expected to be approximately $2 million. Cash income taxes are expected to be $3 million to $6 million, principally related to Argentine and Tunisian income taxes and nominal alternative minimum tax in the U.S. Other than in Argentina and Tunisia, the Company continues to benefit from the carryforward of net operating losses and other positive tax attributes. The Company's financial results and oil and gas hedges are outlined on the attached schedules. Earnings Conference Call This morning at 10:00 a.m. Eastern, Pioneer will discuss its first quarter financial and operating results with an accompanying presentation. The call will be webcast on Pioneer's website, www.pioneernrc.com. At the website, select 'INVESTOR' at the top of the page. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Alternately, you may dial (800) 474-8920 (confirmation code: 601422) to listen to the call via the telephone and view the accompanying visual presentation at the website above. A telephone replay will be available by dialing (888) 203-1112: confirmation code: 601422. Pioneer is a large independent oil and gas exploration and production company with operations in the United States, Argentina, Canada, Gabon, South Africa 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 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 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, international operations and associated international political and economic instability, 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, environmental and weather risks, acts of war or terrorism. 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)
March 31, December 31, 2004 2003 ----------- ----------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 9,022 $ 19,299 Accounts receivable, net 146,139 111,480 Inventories 17,210 17,509 Prepaid expenses 10,166 11,083 Deferred income taxes 35,780 40,514 Other current assets, net 4,396 5,230 ---------- ---------- Total current assets 222,713 205,115 ---------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting 5,246,313 5,163,383 Accumulated depletion, depreciation and amortization (1,808,468) (1,676,136) ---------- ---------- Total property, plant and equipment 3,437,845 3,487,247 ---------- ---------- Deferred income taxes 198,587 192,344 Other assets, net 69,139 66,866 ---------- ---------- $ 3,928,284 $ 3,951,572 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 175,901 $ 186,418 Interest payable 37,728 37,034 Income taxes payable 8,986 5,928 Other current liabilities 240,963 200,372 ---------- ---------- Total current liabilities 463,578 429,752 ---------- ---------- Long-term debt 1,456,695 1,555,461 Deferred income taxes 12,832 12,121 Other liabilities 237,352 194,466 Stockholders' equity 1,757,827 1,759,772 ---------- ---------- $ 3,928,284 $ 3,951,572 ========== ==========
PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) (Unaudited)
Three months ended March 31, ---------------------- 2004 2003 --------- --------- Revenues and other income: Oil and gas $ 446,526 $ 284,999 Interest and other 1,735 2,713 Gain (loss) on disposition of assets, net (13) 1,426 -------- -------- 448,248 289,138 -------- -------- Costs and expenses: Oil and gas production 89,211 67,867 Depletion, depreciation and amortization 136,499 70,049 Exploration and abandonments 80,506 35,867 General and administrative 18,329 15,481 Accretion of discount on asset retirement obligations 1,966 1,094 Interest 21,576 22,491 Other 196 5,178 -------- -------- 348,283 218,027 -------- -------- Income before income taxes and cumulative effect of change in accounting principle 99,965 71,111 Income tax provision (39,777) (2,304) -------- -------- Income before cumulative effect of change in accounting principle 60,188 68,807 Cumulative effect of change in accounting principle, net of tax - 15,413 -------- -------- Net income $ 60,188 $ 84,220 ======== ======== Net income per share: Basic: Income before cumulative effect of change in accounting principle $ .51 $ .59 Cumulative effect of change in accounting principle, net of tax - .13 -------- -------- Net income $ .51 $ .72 ======== ======== Diluted: Income before cumulative effect of change in accounting principle $ .50 $ .58 Cumulative effect of change in accounting principle, net of tax - .13 -------- -------- Net income $ .50 $ .71 ======== ======== Weighted average shares outstanding: Basic 118,719 116,743 ======== ======== Diluted 120,264 118,675 ======== ========
PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
Three months ended March 31, ------------------------ 2004 2003 ---------- ---------- Cash flows from operating activities: Net income $ 60,188 $ 84,220 Depletion, depreciation and amortization 136,499 70,049 Exploration expenses, including dry holes 78,820 30,263 Deferred income taxes 32,720 254 (Gain) loss on disposition of assets, net 13 (1,426) Accretion of discount on asset retirement obligations 1,966 1,094 Interest related amortization (6,370) (4,565) Commodity hedge related amortization (11,291) (17,782) Cumulative effect of change in accounting principle, net of tax - (15,413) Other noncash items 1,220 4,733 Changes in operating assets and liabilities: Accounts receivable, net (33,737) (25,967) Inventories (19) (360) Prepaid expenses 917 (8,222) Other current assets, net 757 398 Accounts payable (6,002) 8,381 Interest payable 693 522 Income taxes payable 3,058 1,452 Other current liabilities (5,802) 9,158 --------- --------- Net cash provided by operating activities 253,630 136,789 Net cash used in investing activities (172,301) (239,481) Net cash provided by (used in) financing activities (91,426) 100,594 --------- --------- Net decrease in cash and cash equivalents (10,097) (2,098) Effect of exchange rate changes on cash and cash equivalents (180) 466 Cash and cash equivalents, beginning of period 19,299 8,490 --------- --------- Cash and cash equivalents, end of period $ 9,022 $ 6,858 ========= =========
PIONEER NATURAL RESOURCES COMPANY SUMMARY PRODUCTION AND PRICE DATA (Unaudited)
Three months ended March 31, ----------------------- 2004 2003 --------- ---------- Average Daily Production: Oil (Bbls) - U.S. 24,971 24,086 Argentina 8,628 7,673 Canada 100 135 Africa 14,034 - --------- ---------- Total 47,733 31,894 Natural gas liquids (Bbls) - U.S. 20,936 20,024 Argentina 1,424 1,130 Canada 1,046 879 --------- --------- Total 23,406 22,033 Gas (Mcf) - U.S. 550,480 339,598 Argentina 97,818 66,633 Canada 40,019 40,876 --------- --------- Total 688,317 447,107 Total Production: Oil (MBbls) 4,344 2,870 Natural gas liquids (MBbls) 2,130 1,983 Gas (MMcf) 62,637 40,240 Equivalent barrels (MBOE) 16,913 11,560 Average Reported Price (a): Oil (per Bbl) - U.S. $ 26.67 $ 25.85 Argentina $ 27.93 $ 25.61 Canada $ 35.00 $ 31.81 Africa $ 31.41 $ - Worldwide $ 28.31 $ 25.82 Natural gas liquids (per Bbl) - U.S. $ 21.52 $ 21.63 Argentina $ 29.16 $ 24.27 Canada $ 26.51 $ 27.51 Worldwide $ 22.21 $ 22.00 Gas (per Mcf) - U.S. $ 5.11 $ 4.72 Argentina $ .58 $ .54 Canada $ 4.22 $ 5.38 Worldwide $ 4.41 $ 4.16 - --------------- (a) Average prices include the results of hedging activities.
PIONEER NATURAL RESOURCES COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (in thousands) (Unaudited) EBITDAX and discretionary cash flow ("DCF") (as defined below) are presented herein, and reconciled to the generally accepted accounting principle ("GAAP") measures of net income and net cash provided by operating activities because of their wide acceptance by the investment community as financial indicators of a company's ability to internally fund exploration and development activities and to service or incur debt. The Company also views the non-GAAP measures of EBITDAX and DCF as useful tools for comparisons of the Company's financial indicators with those of peer companies that follow the full cost method of accounting. EBITDAX and DCF should not be considered as alternatives to net income or net cash provided by operating activities, as defined by GAAP.
Three months ended March 31, ---------------------- 2004 2003 --------- --------- Net income $ 60,188 $ 84,220 Depletion, depreciation and amortization 136,499 70,049 Exploration and abandonments 80,506 35,867 Accretion of discount on asset retirement obligations 1,966 1,094 Interest expense 21,576 22,491 Income tax provision 39,777 2,304 (Gain) loss on disposition of assets, net 13 (1,426) Commodity hedge related amortization (11,291) (17,782) Cumulative effect of change in accounting principle, net of tax - (15,413) Other noncash items 1,220 4,733 -------- -------- EBITDAX (a) 330,454 186,137 Less: Cash interest expense (27,946) (27,056) Current income taxes (7,057) (2,050) -------- -------- Discretionary cash flow (b) 295,451 157,031 Less: Cash operating exploration expense (1,686) (5,604) Changes in operating assets and liabilities (40,135) (14,638) -------- -------- Net cash provided by operating activities $ 253,630 $ 136,789 ======== ======== - ------------- (a) "EBITDAX" represents earnings before depletion, depreciation and amortization expense; impairment of oil and gas properties; exploration and abandonments; accretion of discount on asset retirement obligations; interest expense; income taxes; net gain or loss on the disposition of assets; commodity hedge related amortization; cumulative effect of change in accounting principle, net of tax; and other noncash items. (b) Discretionary cash flow equals cash flows from operating activities before changes in operating assets and liabilities and before cash exploration expense.
PIONEER NATURAL RESOURCES COMPANY SUPPLEMENTAL HEDGE INFORMATION As of May 6, 2004 Open Commodity Hedge Positions
2004 -------------------------------------- Second Third Fourth Quarter Quarter Quarter Year 2005 2006 2007 2008 ------- ------- ------- -------- ------- ------ ------- ------- Average Daily Oil Production: Swap Contracts: Volume (Bbl) 24,000 22,500 24,000 23,498 27,000 5,000 1,000 5,000 NYMEX price (Bbl) $ 26.51 $ 29.26 $ 29.65 $ 28.46 $ 27.97 $26.19 $26.00 $26.09 Average Daily Gas Production: Swap Contracts: Volume (Mcf) 280,000 310,000 310,000 300,073 174,904 70,000 20,000 - NYMEX price (MMBtu) (a) $ 4.20 $ 4.40 $ 4.40 $ 4.35 $ 5.15 $ 4.25 $ 3.75 $ - - --------------- (a) Approximate, based on historical differentials to index prices.
Open Interest Rate Swap Hedge Positions (a)
Annual Interest (b) Notional --------------------------- Debt Fixed Rates LIBOR Margins Amounts Received Paid ------------- ----------- ------------- 7-1/2% senior notes due 2012 $ 150,000,000 7.50% 3.71% 9-5/8% senior notes due 2010 $ 150,000,000 9.63% 5.66% - --------------- (a) The open interest rate swaps are fair value hedges of the Company's 7-1/2% and 9-5/8% senior notes and mature when the hedged senior notes mature in 2012 and 2010, respectively. (b) Under the terms of the interest rate swaps, the Company receives the fixed rates on the notional amounts and pays the variable six- month London Interbank Offered Rate ("LIBOR") plus the LIBOR margins shown above.
Net Deferred Gains (Losses) on Terminated Hedges (in thousands)
2004 ------------------------------------- Second Third Fourth Quarter Quarter Quarter Year 2005 Thereafter Total ------- ------- ------- ------- ------- ---------- -------- Net commodity hedge gains (a) $10,932 $11,001 $10,954 $32,887 $ 1,249 $ - $ 34,136 Net debt hedge gains (losses) (b) 6,116 5,489 4,555 16,160 10,968 (7,062) 20,066 ------ ------ ------ ------ ------ ------- ------- Total net deferred gains (losses) $17,048 $16,490 $15,509 $49,047 $12,217 $ (7,062) $ 54,202 ====== ====== ====== ====== ====== ======= ======= - --------------- (a) Includes the following net deferred commodity hedge gains and losses for which cash settlements have been deferred until the indicated future periods: (i) $323 thousand, $322 thousand and $318 thousand of net deferred commodity hedge losses due during the second, third and fourth quarters of 2004, respectively, and (ii) $209 thousand of net deferred commodity hedge gains to be received during 2005. Deferred commodity hedge gains will be amortized as increases to oil and gas revenues and deferred commodity hedge losses will be amortized as decreases to oil and gas revenues during the indicated future periods. (b) Deferred debt hedge gains will be amortized as decreases to interest expense and deferred debt hedge losses will be amortized as increases to interest expense during the indicated future periods.
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