-----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, JZb/GEPAWWBixe4w2Fa5TjcSW9z5ITNm8teayq8/e1Bu2VqeA54YxjXyP90siL0t cBmvFi7r+ayIMvPn/gxcIA== 0001038357-06-000089.txt : 20060803 0001038357-06-000089.hdr.sgml : 20060803 20060803090334 ACCESSION NUMBER: 0001038357-06-000089 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060803 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060803 DATE AS OF CHANGE: 20060803 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: 061000145 BUSINESS ADDRESS: STREET 1: 200 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 9724449001 MAIL ADDRESS: STREET 1: 200 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 8-K 1 aug3er8k.txt PIONEER 6/06 EARNINGS REL 8-K 8/03/06 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): August 3, 2006 Pioneer Natural Resources Company ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware 1-13245 75-2702753 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 5205 N. O'Connor Blvd., Suite 200, 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17 CFR 240.14a-12) | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) PIONEER NATURAL RESOURCES COMPANY TABLE OF CONTENTS Page Item 2.02. Results of Operations and Financial Condition.......... 3 Item 9.01. Financial Statements and Exhibits (d) Exhibits.......................................... 3 Signature.......................................................... 4 Exhibit Index...................................................... 5 2 PIONEER NATURAL RESOURCES COMPANY Item 2.02. 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 that 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, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, third party approvals, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to replace reserves, implement its business plans (including its plan to repurchase stock), or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, acts of war or terrorism. These and other risks are described in the Company's 2005 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that are available from the Company or the United States Securities and Exchange Commission. On August 3, 2006, 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 June 30, 2006, provided an operations update and provided the Company's third quarter financial outlook based on current expectations. During the second and third quarters of 2005 and the first and second quarters of 2006, the Company divested certain Canadian and Gulf of Mexico assets and all of its Argentine assets. In accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), the Company has reflected the current and comparative prior year results of operations of those divested assets, net of tax, as discontinued operations rather than as components of continuing operations. Attached hereto as Exhibit 99.2 is a schedule which provides the Company's 2005 unaudited quarterly results of operations in accordance with SFAS 144, wherein the historic results of operations of the divested properties, net of tax, have been reclassified as income from discontinued operations. Exhibit 99.2 also provides the Company's 2005 quarterly sales volumes adjusted to exclude the sales volumes of the divested properties. Item 9.01. Financial Statements and Exhibits (d) Exhibits 99.1 News Release and Schedules Attached to News Release dated August 3, 2006. 99.2 2005 Unaudited Quarterly Results Adjusted for Discontinued Operations. 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: August 3, 2006 By: /s/ Darin G. Holderness --------------------------------------- Darin G. Holderness 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 August 3, 2006. 99.2(a) 2005 Unaudited Quarterly Results Adjusted for Discontinued Operations. ------------- (a) Filed herewith. 5 EX-99 2 aug3erx991.txt PIONEER 6/06 EARNINGS REL 8-K 8/03/06 EXH 99.1 EXHIBIT 99.1 NEWS RELEASE Company Contacts: Investors: Frank Hopkins Media and Public Affairs: Susan Spratlen (972) 444-9001 Pioneer Reports Second Quarter 2006 Results Dallas, Texas, August 3, 2006 -- Pioneer Natural Resources Company (NYSE:PXD) today announced financial and operating results for the quarter ended June 30, 2006. o Pioneer reported net income of $88 million, or $.69 per diluted share. o Second quarter oil and gas sales from continuing operations exceeded the Company's guidance, averaging 98,893 barrels oil equivalent per day (BOEPD). o North American production for the first half of 2006 rose 16% from equivalent volumetric production payment (VPP) adjusted 2005 first half levels, reflecting the continuing success of Pioneer's accelerated development drilling program. Worldwide production was up 9% for the same period. o Production growth is on track to meet or exceed the high end of Pioneer's targeted 2006 worldwide exit rate of 95,000 to 100,000 BOEPD. o Pioneer drilled three additional Edwards Trend discoveries, resulting in 100% success on the five prospects drilled to date. o The Company purchased 4.3 million shares at $39.27 per share, completing $170 million of the remaining $359 million share repurchase program authorized by the Board of Directors. o Pioneer closed the $675 million sale of its Argentine operations, recognizing an after-tax gain on the disposition of these assets of $6 million, or $.05 per diluted share. Net income for the second quarter of 2006 was comprised of (i) income from continuing operations of $66 million, or $.52 per diluted share, as compared to $22 million, or $.16 per diluted share, for the prior year quarter and (ii) income from discontinued operations of $22 million, or $.17 per diluted share, as compared to $163 million, or $1.12 per diluted share, for the prior year quarter. Income from continuing operations for the second quarter included the following unusual after-tax items: o deferred tax expense related to the newly enacted Texas margin tax of $13 million, or $.10 per diluted share, o deferred tax benefit from the recent reduction in Canadian federal and provincial tax rates of $10 million, or $.07 per diluted share, and o a loss of $5 million, or $.04 per diluted share, associated with the early extinguishment of $346 million of 6 1/2% 2008 senior notes with a scheduled maturity of January 2008. Income from discontinued operations for the second quarter was comprised of the following after-tax items: o a gain on the disposition of the Argentina assets of $6 million, or $.05 per diluted share, and operating income from the divested properties prior to closing of $4 million, or $.03 per diluted share, and o a gain related to deepwater Gulf of Mexico business interruption insurance recoveries (Hurricane Katrina) of $12 million, or $.09 per diluted share. Cash flow from operating activities for the second quarter of 2006 was $158 million. Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "Since shifting our strategy to deliver strong, consistent production growth in North America, we have accelerated development drilling, progressed several new resource play opportunities and advanced our major development projects. We are on track to meet or exceed our production targets for 2006 and remain confident that we can deliver double-digit production growth and add significant shareholder value over the next five years." Operations Review Pioneer currently has 32 rigs running, up from 27 rigs during the first quarter, and expects to continue to increase its drilling activity level through the remainder of 2006 and have approximately 44 rigs active by year end. In the Permian Basin, Pioneer is on track to drill approximately 340 wells this year, up from 190 wells in 2005. Production growth from the Spraberry field is on target to meet or exceed the Company's exit rate forecast with production during the first half of 2006 rising 26% from the same period in 2005, after adjusting for the Company's VPPs for comparison purposes. These strong Spraberry results are being driven by the success of Pioneer's deeper drilling campaign, which increases reserves and production by including the deeper Wolfcamp formation, and new opportunities from bolt-on acquisitions. In South Texas, Pioneer is running four rigs in the Edwards Trend and expects to add two rigs before year end. The Company has successfully drilled five prospects in different areas of the Trend with a 100% success rate. Three of these prospects were drilled in the second quarter - Bonita, Barracuda and Wahoo. On the previously announced Sinor prospect, where four successful wells have been drilled, the Company expects an aggressive development program to begin in the second quarter of 2007 after a 3-D seismic program is completed later this year. On the previously announced Stingray prospect, the first of three appraisal wells is being drilled. Three wells from the Sinor and Stingray prospects are now on production at approximately five million cubic feet per day. As more wells come on stream from the five successful prospects and development drilling in the existing Pawnee field continues, South Texas production is expected to exceed prior estimates for 2006. In addition, the Company continues to believe the Edwards Trend holds a gross resource potential of one to three trillion cubic feet and will generate very attractive returns. In the Rocky Mountains, year-to-date coal bed methane (CBM) production in the Raton field was up 8% from the same period in 2005. Through July, Pioneer has drilled 155 of the 330 Raton wells planned for 2006 and recently added the third rig planned for this drilling program. The Company now expects full-year production from the Raton field to exceed the 5% to 7% annual growth target versus 2005 announced earlier this year. In northeast Utah and northwest Colorado, Pioneer's programs to evaluate the CBM resource potential in the Uinta, Piceance and Sand Wash basins are progressing, and results from the initial pilot wells are expected to be evaluated in late 2006 / early 2007 to determine future development plans. In the Uinta Basin pilot program, 25 Castlegate wells are expected to be producing by the end of the third quarter, including four wells to be drilled during the third quarter. In the Piceance Basin, 35 Columbine Springs pilot program wells are expected to be on production during the third quarter. In the Sand Wash Basin, 22 Lay Creek wells from the initial two pilots are expected to be producing by year end. Drilling and testing continues on three additional pilots. Pioneer also plans to drill four wells and shoot additional 3-D seismic to evaluate the Main Canyon Entrada conventional gas play in the Uinta Basin during the second half of 2006. In Canada, the Company has drilled 20 of the 200 Horseshoe Canyon CBM wells planned for 2006, hindered by road bans from heavy spring rains which prevented access. The road bans were recently lifted, and Pioneer has two rigs on location and expects to add a third rig later in the third quarter. To test the potential of Mannville CBM in the Bashaw area, Pioneer has drilled four horizontal wells and plans to drill two additional horizontal wells during the third quarter. On the North Slope of Alaska, Pioneer has completed the construction of the gravel drill site for the Oooguruk development project. Additional work on the project scheduled for 2006 includes contouring and armoring the drill site, fabricating equipment and modifying the drilling rig for installation during 2007. The project is on schedule to achieve first oil production in 2008. In the Cook Inlet, Pioneer has assumed operatorship of the Cosmopolitan oil discovery project and increased its working interest to 50%. Offshore South Africa, development drilling continues on the South Coast Gas Project, a seven-well subsea tie-back to the existing F-A platform. Subsea infrastructure is expected to be in place for project startup during the second half of 2007. In Tunisia, production from the Adam 4 well oil discovery has begun, and drilling on the Adam 5 well began in July. Two wells are planned in the Pioneer-operated Jenein Nord block by year end, and one well is anticipated during the second half in the Borj El Khadra block. Pioneer increased its 2006 capital budget by $100 million to $1.4 billion, excluding discontinued operations, to accelerate successful Edwards Trend activities and fund new shale gas acreage additions and core area bolt-on acquisitions. Financial Review Second quarter oil sales averaged 24,571 barrels per day (BPD) and natural gas liquids sales averaged 19,143 BPD. Gas sales in the second quarter averaged 331 million cubic feet per day. The reported price for oil was $69.71 per barrel and included $13.00 per barrel related to deferred revenue from VPPs for which production is not recorded. The price for natural gas liquids was $36.32 per barrel. The reported price for gas was $6.25 per thousand cubic feet (Mcf) and included $.62 per Mcf related to deferred revenue from VPPs for which production is not recorded. Second quarter production costs averaged $11.45 per barrel of oil equivalent (BOE). Exploration and abandonment costs were $42 million for the quarter and included $13 million of unsuccessful Alaskan drilling costs, primarily associated with the Cronus and Antigua wells, $24 million of geologic and geophysical expenses including seismic and personnel costs and $5 million of other drilling and acreage costs. Financial Outlook The following statements are estimates based on current expectations. These forward-looking statements are subject to a number of risks and uncertainties that 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. Third quarter 2006 production is expected to average 95,000 to 100,000 BOEPD. Third quarter production costs (including production and ad valorem taxes and transportation costs) are expected to average $11.00 to $12.00 per BOE based on current NYMEX strip prices for oil and gas. Depreciation, depletion and amortization expense is expected to average $9.50 to $10.50 per BOE. Total exploration and abandonment expense during the third quarter is expected to be $20 million to $65 million and could include up to $15 million of costs associated with the high-impact drilling of a new prospect adjacent to the Company's Clipper discovery (deepwater Gulf of Mexico) and an onshore Norphlet prospect (Mississippi). It could also include $25 million associated with lower-risk resource plays in the Edwards Trend in South Texas, Uinta / Piceance in the Rockies, Canada and Tunisia. In addition, exploration expense includes $20 million to $25 million for seismic investments and personnel, primarily related to the onshore resource plays Pioneer is currently pursuing. General and administrative expense is expected to be $29 million to $32 million. Interest expense is expected to be $22 million to $25 million, offset by interest income of $3 million to $5 million. Accretion of discount on asset retirement obligations is expected to be $1 million to $2 million. The Company's third quarter effective income tax rate is expected to range from 35% to 45% based on current capital spending plans. Cash income taxes are expected to range from $5 million to $15 million, principally related to Tunisian income taxes and nominal alternative minimum tax in the U.S. 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 quarterly financial and operating results with an accompanying presentation. The call will be webcast on Pioneer's website, www.pxd.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. Or you may choose to dial (800) 474-8920 (confirmation code: 1564263) to listen to the call by telephone and view the accompanying visual presentation at the website above. A telephone replay will be available by dialing (888) 203-1112 (confirmation code: 1564263). Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, Canada and Africa. For more information, visit Pioneer's website at www.pxd.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, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, third party approvals, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to replace reserves, implement its business plans (including its plan to repurchase stock), or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, the assumptions underlying production forecasts, 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 (the "SEC"). Cautionary Note to U.S. Investors -- The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Pioneer uses certain terms in this release, such as "resource potential" or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines prohibit Pioneer from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Pioneer. PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31, 2006 2005 ----------- ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 457,042 $ 18,802 Accounts receivable, net 166,982 337,658 Inventories 115,917 79,659 Prepaid expenses 8,563 18,091 Deferred income taxes 115,963 158,878 Other current assets, net 30,604 10,716 ---------- ---------- Total current assets 895,071 623,804 ---------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting 7,389,043 8,813,134 Accumulated depletion, depreciation and amortization (1,728,466) (2,577,946) ----------- ----------- Total property, plant and equipment 5,660,577 6,235,188 ---------- ---------- Goodwill 311,346 311,651 Other assets, net 200,434 158,591 ---------- ---------- $ 7,067,428 $ 7,329,234 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 238,410 $ 345,204 Interest payable 30,500 40,314 Income taxes payable 78,283 22,470 Deferred revenue 184,848 190,327 Other current liabilities 349,047 435,040 ---------- ---------- Total current liabilities 881,088 1,033,355 ---------- ---------- Long-term debt 1,263,994 2,058,412 Deferred income taxes 1,050,236 767,329 Deferred revenue 574,155 664,511 Other liabilities and minority interests 383,028 588,525 Stockholders' equity 2,914,927 2,217,102 ---------- ---------- $ 7,067,428 $ 7,329,234 ========== ==========
PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) (Unaudited)
Three months ended Six months ended June 30, June 30, ---------------------- ---------------------- 2006 2005 2006 2005 --------- --------- --------- --------- Revenues and other income: Oil and gas $ 407,570 $ 320,337 $ 787,038 $ 644,163 Interest and other 9,741 12,031 26,852 14,051 Gain (loss) on disposition of assets, net (3,403) 109 (3,476) 2,250 -------- -------- -------- -------- 413,908 332,477 810,414 660,464 -------- -------- -------- -------- Costs and expenses: Oil and gas production 103,066 79,640 197,749 160,584 Depletion, depreciation and amortization 87,984 65,999 170,390 139,307 Impairment of long-lived assets - 471 - 623 Exploration and abandonments 41,618 37,498 166,260 91,327 General and administrative 29,468 26,596 61,715 54,084 Accretion of discount on asset retirement obligations 1,154 1,043 2,302 2,089 Interest 22,766 29,403 59,342 62,149 Other 11,759 15,713 16,813 24,554 -------- -------- -------- -------- 297,815 256,363 674,571 534,717 -------- -------- -------- -------- Income from continuing operations before income taxes 116,093 76,114 135,843 125,747 Income tax provision (50,207) (53,885) (70,924) (75,796) -------- -------- -------- -------- Income from continuing operations 65,886 22,229 64,919 49,951 Income from discontinued operations, net of tax 22,153 163,330 566,327 220,265 -------- -------- -------- -------- Net income $ 88,039 $ 185,559 $ 631,246 $ 270,216 ======== ======== ======== ======== Basic earnings per share: Income from continuing operations $ .52 $ .16 $ .52 $ .35 Income from discontinued operations, net of tax .18 1.16 4.48 1.55 -------- -------- -------- -------- Net income $ .70 $ 1.32 $ 5.00 $ 1.90 ======== ======== ======== ======== Diluted earnings per share: Income from continuing operations $ .52 $ .16 $ .52 $ .35 Income from discontinued operations, net of tax .17 1.12 4.34 1.51 -------- -------- -------- -------- Net income $ .69 $ 1.28 $ 4.86 $ 1.86 ======== ======== ======== ======== Weighted average shares outstanding: Basic 125,629 140,812 126,282 141,849 ======== ======== ======== ======== Diluted 129,624 145,246 130,346 146,286 ======== ======== ======== ========
PIONEER NATURAL RESOURCES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
Three months ended Six months ended June 30, June 30, ------------------------ ------------------------- 2006 2005 2006 2005 ---------- ---------- ---------- ----------- Cash flows from operating activities: Net income $ 88,039 $ 185,559 $ 631,246 $ 270,216 Adjustments to reconcile net income to net cash provided by operating activities: Depletion, depreciation and amortization 87,984 65,999 170,390 139,307 Impairment of long-lived assets - 471 - 623 Exploration expenses, including dry holes 17,354 12,286 111,936 28,962 Deferred income taxes 50,223 41,030 67,184 56,376 Loss (gain) on disposition of assets, net 3,403 (109) 3,476 (2,250) Loss on extinguishment of debt 8,076 7,342 8,076 7,342 Accretion of discount on asset retirement obligations 1,154 1,043 2,302 2,089 Discontinued operations (1,002) 61,019 (540,655) 184,072 Interest expense 2,118 865 5,165 1,062 Commodity hedge related activity (6,061) (7,666) (5,553) (10,727) Stock-based compensation 10,824 8,018 18,310 13,170 Amortization of deferred revenue (47,886) (20,449) (95,835) (32,074) Other noncash items 5,810 1,553 9,524 5,699 Changes in operating assets and liabilities, net of effects from acquisition: Accounts receivable, net 37,050 (42,269) 163,165 (54,302) Inventories (18,994) (11,388) (39,125) (12,703) Prepaid expenses 14,228 3,359 1,964 5,808 Other current assets, net (237) (331) 9,192 (529) Accounts payable (19,993) (8,029) (113,641) 9,564 Interest payable 8,826 11,895 (10,274) (4,364) Income taxes payable (78,236) 9,144 55,815 11,919 Other current liabilities (4,438) (9,425) 8,927 (5,689) --------- --------- --------- ---------- Net cash provided by operating activities 158,242 309,917 461,589 613,571 Net cash provided by investing activities 343,536 266,099 965,291 659,228 Net cash used in financing activities (89,857) (536,165) (990,440) (1,224,367) --------- --------- --------- ---------- Net increase in cash and cash equivalents 411,921 39,851 436,440 48,432 Effect of exchange rate changes on cash and cash equivalents 2,139 2,561 1,800 2,762 Cash and cash equivalents, beginning of period 42,982 16,039 18,802 7,257 --------- --------- --------- ---------- Cash and cash equivalents, end of period $ 457,042 $ 58,451 $ 457,042 $ 58,451 ========= ========= ========= ==========
PIONEER NATURAL RESOURCES COMPANY SUMMARY PRODUCTION AND PRICE DATA (Unaudited)
Three months ended Six months ended June 30, June 30, ---------------------- ----------------------- 2006 2005 2006 2005 --------- --------- --------- ---------- Average Daily Sales Volumes from Continuing Operations: Oil (Bbls) - U.S. 17,671 19,875 17,320 21,191 Canada 307 210 292 186 Africa 6,593 10,452 7,121 11,205 --------- --------- --------- --------- Worldwide 24,571 30,537 24,733 32,582 ========= ========= ========= ========= Natural gas liquids (Bbls) - U.S. 18,731 14,834 18,455 16,154 Canada 412 610 415 514 --------- --------- --------- --------- Worldwide 19,143 15,444 18,870 16,668 ========= ========= ========= ========= Gas (Mcf) - U.S. 286,270 252,047 280,553 267,477 Canada 44,801 36,710 40,317 35,448 --------- --------- --------- --------- Worldwide 331,071 288,757 320,870 302,925 ========= ========= ========= ========= Average Daily Sales Volumes from Discontinued Operations: Oil (Bbls) - U.S. - 6,549 4,839 6,376 Argentina 2,982 7,796 5,071 7,992 Canada - 45 - 57 --------- --------- --------- --------- Worldwide 2,982 14,390 9,910 14,425 ========= ========= ========= ========= Natural gas liquids (Bbls) - U.S. - 74 - 65 Argentina 406 1,948 849 1,761 Canada - 264 - 224 --------- --------- --------- --------- Worldwide 406 2,286 849 2,050 ========= ========= ========= ========= Gas (Mcf) - U.S. 1,317 301,756 72,763 278,609 Argentina 42,538 135,188 88,537 132,783 Canada 173 10,472 87 12,910 --------- --------- --------- --------- Worldwide 44,028 447,416 161,387 424,302 ========= ========= ========= ========= Average Reported Prices (a): Oil (per Bbl) - U.S. $ 69.43 $ 30.13 $ 64.82 $ 29.71 Canada $ 72.37 $ 35.22 $ 69.89 $ 41.97 Africa $ 70.34 $ 51.84 $ 64.73 $ 47.82 Worldwide $ 69.71 $ 37.60 $ 64.86 $ 36.01 Natural gas liquids (per Bbl) - U.S. $ 35.84 $ 28.34 $ 34.81 $ 27.14 Canada $ 57.97 $ 41.18 $ 56.10 $ 39.89 Worldwide $ 36.32 $ 28.85 $ 35.28 $ 27.54 Gas (per Mcf) - U.S. $ 6.08 $ 6.75 $ 6.33 $ 6.40 Canada $ 7.35 $ 6.17 $ 7.48 $ 6.07 Worldwide $ 6.25 $ 6.67 $ 6.48 $ 6.36 - --------------- (a) Average prices are attributable to continuing operations and include the results of hedging activities and amortization of VPP deferred revenue.
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 Six months ended June 30, June 30, ------------------------ ------------------------ 2006 2005 2006 2005 ---------- ---------- ---------- ---------- Net income $ 88,039 $ 185,559 $ 631,246 $ 270,216 Depletion, depreciation and amortization 87,984 65,999 170,390 139,307 Impairment of long-lived assets - 471 - 623 Exploration and abandonments 41,618 37,498 166,260 91,327 Accretion of discount on asset retirement obligations 1,154 1,043 2,302 2,089 Interest expense 22,766 29,403 59,342 62,149 Income tax provision 50,207 53,885 70,924 75,796 Loss (gain) on disposition of assets, net 3,403 (109) 3,476 (2,250) Loss on extinguishment of debt 8,076 7,342 8,076 7,342 Discontinued operations (1,002) 61,019 (540,655) 184,072 Current income taxes on discontinued operations 8,545 5,563 152,575 7,889 Cash exploration expense on discontinued operations 634 3,213 2,145 6,230 Commodity hedge related activity (6,061) (7,666) (5,553) (10,727) Stock-based compensation 10,824 8,018 18,310 13,170 Amortization of deferred revenue (47,886) (20,449) (95,835) (32,074) Other noncash items 5,810 1,553 9,524 5,699 --------- --------- --------- --------- EBITDAX (a) 274,111 432,342 652,527 820,858 Less: Cash interest expense (20,648) (28,538) (54,177) (61,087) Current income taxes (8,529) (18,418) (156,315) (27,309) --------- --------- --------- --------- Discretionary cash flow (b) 244,934 385,386 442,035 732,462 Less: Cash exploration expense (24,898) (28,425) (56,469) (68,595) Changes in operating assets and liabilities (61,794) (47,044) 76,023 (50,296) --------- --------- --------- ---------- Net cash provided by operating activities $ 158,242 $ 309,917 $ 461,589 $ 613,571 ========= ========= ========= ========= - ------------- (a) "EBITDAX" represents earnings before depletion, depreciation and amortization expense; impairment of long-lived assets; exploration and abandonments; accretion of discount on asset retirement obligations; interest expense; income taxes; gain or loss on the disposition of assets; loss on extinguishment of debt; noncash effects from discontinued operations; commodity hedge related activity; stock-based compensation; amortization of deferred revenue; 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 INFORMATION As of August 1, 2006 Open Commodity Hedge Positions
2006 ------------------------------ Third Fourth Quarter Quarter Year 2007 2008 -------- -------- -------- -------- -------- Average Daily Oil Production Hedged: Swap Contracts: Volume (Bbl) 5,000 5,000 5,000 10,000 10,000 NYMEX price (Bbl) $ 37.20 $ 37.20 $ 37.20 $ 30.96 $ 30.62 Collar Contracts: Volume (Bbl) 6,500 6,500 6,500 2,000 - NYMEX price (Bbl): Ceiling $ 66.41 $ 66.41 $ 66.41 $ 89.50 $ - Floor $ 41.92 $ 41.92 $ 41.92 $ 50.00 $ - Average Daily Gas Production Hedged: Swap Contracts: Volume (MMBtu) 73,880 73,984 73,932 59,195 15,000 NYMEX price (MMBtu) (a) $ 4.30 $ 4.30 $ 4.30 $ 7.75 $ 9.10 Collar Contracts: Volume (MMBtu) 85,000 95,000 90,000 - - NYMEX price (MMBtu) (a): Ceiling $ 15.00 $ 15.25 $ 15.15 $ - $ - Floor $ 6.95 $ 6.95 $ 6.95 $ - $ - - --------------- (a) Approximate, based on historical differentials to index prices.
Amortization of Volumetric Production Payment Proceeds and Net Derivative Losses (in thousands)
2006 ----------------------------------- Third Fourth Quarter Quarter Year 2007 Thereafter Total --------- --------- --------- --------- ---------- --------- VPP proceeds, net of transaction costs $ 45,838 $ 45,527 $ 91,365 $ 175,216 $ 460,322 $ 726,903 Net hedge obligations assigned 1,558 1,569 3,127 6,016 22,957 32,100 -------- -------- -------- -------- -------- -------- Total deferred revenue (a) 47,396 47,096 94,492 181,232 483,279 759,003 Less net derivative losses to be recognized in pretax earnings (b) 274 (396) (122) (3,540) (17,117) (20,779) -------- -------- -------- -------- -------- -------- Total VPP impact to pretax earnings $ 47,670 $ 46,700 $ 94,370 $ 177,692 $ 466,162 $ 738,224 ======== ======== ======== ======== ======== ======== - -------------- (a) Deferred revenue will be amortized as increases to oil and gas revenues during the indicated future periods. (b) Represents the remaining pretax earnings impact of the derivatives assigned in the VPPs.
EX-99 3 aug3erx992.txt PIONEER 6/06 EARNINGS REL 8-K 8/03/06 EXH. 99.2 EXHIBIT 99.2 Pioneer Natural Resources Company 2005 Unaudited Quarterly Results Adjusted for Discontinued Operations
Three months ended ------------------------------------------------------ March 31, June 30, September 30, December 31, ($ Millions except production volumes) 2005 2005 2005 2005 ---------- ---------- ------------- ------------ Revenues and other income: Oil and gas $ 324 $ 320 $ 390 $ 419 Interest and other 2 12 8 10 Gain on disposition on assets, net 2 - - 57 ----- ----- ----- ----- 328 332 398 486 ----- ----- ----- ----- Costs and expenses: Oil and gas production 81 80 93 93 Depletion, depreciation and amortization 73 66 76 85 Exploration and abandonments 54 37 56 56 General and administrative 27 27 30 30 Accretion of discount on asset retirement obligations 1 1 1 1 Interest 33 29 29 35 Other 9 16 34 41 ----- ----- ----- ----- 278 256 319 341 ----- ----- ----- ----- Income from continuing operations before income taxes 50 76 79 145 Current income tax provision (7) (13) (13) (18) Deferred income tax provision (15) (41) (4) (44) ----- ----- ----- ----- Income from continuing operations 28 22 62 83 Income from discontinued operations, net of tax 57 163 62 58 ----- ----- ----- ----- Net income $ 85 $ 185 $ 124 $ 141 ===== ===== ===== ===== Production volumes: Oil (in millions of barrels) 3,119 2,779 2,885 2,977 Natural gas liquid (in millions of barrels) 1,612 1,405 1,718 1,800 Gas (in millions of cubic feet) 28,553 26,277 28,700 28,694 Total (in millions of barrels of oil equivalents) 9,489 8,564 9,387 9,559
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