-----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, LLfSm7MmYfyWHEt89bCUR+EvGtqGH7CzSbus/EzZX5IDJuqbW6vA1vgf7ye5O+7x 4fut7WqSAMBBCxvezGy7eA== 0001038357-08-000013.txt : 20080507 0001038357-08-000013.hdr.sgml : 20080507 20080507085919 ACCESSION NUMBER: 0001038357-08-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20080507 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080507 DATE AS OF CHANGE: 20080507 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: 1206 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13245 FILM NUMBER: 08808308 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 marer8k.htm PXD MAY 08 ER

 

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, 2008

 

 

PIONEER NATURAL RESOURCES COMPANY

(Exact name of Registrant as specified in its charter)

 

Delaware

1-13245

75-2702753

(State or other jurisdiction of

incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

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:

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

1

 


 

PIONEER NATURAL RESOURCES COMPANY

 

Item 2.02.

Results of Operations and Financial Condition

 

On May 7, 2008, the Company issued the news release, with financial statements and schedules, that is attached hereto as exhibit 99.1. In the news release, the Company announced financial and operating results for the quarter ended March 31, 2008, provided an operations update and provided the Company’s financial and operational outlook for future periods based on current expectations.

 

Item 9.01.

Financial Statements and Exhibits

 

 

(d)

Exhibits

 

 

99.1 --

News Release, dated May 7, 2008, titled “Pioneer Reports First Quarter 2008 Results” and financial statements and schedules attached to news release.

 

 

 

2

 


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

 

 

 

 

By:

/s/ Richard P. Dealy

 

 

 

Richard P. Dealy

 

 

 

Executive Vice President and Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)

 

 

 

 

 

Dated: May 7, 2008

 

 

 

 

 

3

 


 

PIONEER NATURAL RESOURCES COMPANY

 

EXHIBIT INDEX

 

Exhibit No.

Description

 

99.1(a)

News Release, dated May 7, 2008, titled “Pioneer Reports First Quarter 2008 Results” and financial statements and schedules attached to news release.

 

___________

(a) Furnished herewith.

 

 

4

 

 

EX-99 2 marer8k991.htm

EXHIBIT 99.1


 

News Release

 

 

Pioneer Reports First Quarter 2008 Results

 

Dallas, Texas, May 7, 2008 -- Pioneer Natural Resources Company (NYSE:PXD) today announced financial and operating results for the quarter ended March 31, 2008.

 

 

Reported first quarter net income of $130 million, or $1.09 per diluted share

 

Increased average daily oil and gas sales to 110,298 barrels oil equivalent per day (BOEPD); 24% above comparable sales for the first quarter of 2007

 

Posted 31% combined production growth from Spraberry, Raton and Edwards fields from the prior year quarter

 

Announced initiatives to capture additional resource potential of one billion barrels oil equivalent (BOE) in the Spraberry field

 

Announced a new discovery in the Pierre Shale gas play in the Raton Basin in southeastern Colorado with net resource potential of more than two trillion cubic feet

 

Drilled three successful Silurian wells in Tunisia; two wells included new discoveries in the Ordovician and TAGI formations

 

Scott Sheffield, Chairman and CEO, stated, “Delivering consistent, repeatable reserve and production growth was a key goal in our decision to refocus the Company’s efforts on our onshore assets, particularly those in North America. Our first quarter results further demonstrate that this goal is being achieved. With the new opportunities we’ve announced in our two largest core areas (Spraberry and Raton), our active onshore drilling program and plans to expand drilling in 2009, we are highly confident that the Company will continue to deliver consistent growth and achieve our recently increased target for 14+% compound average annual growth (CAGR) in production per share and 20+% CAGR in after-tax cash flow through 2011.

 

“Pioneer has reached an important inflection point. From 2008 to 2009, based on current strip commodity prices and expected production growth, our after-tax cash flow is expected to grow by approximately 50%.”

 

Financial Review

Pioneer’s first quarter net income was $130 million, or $1.09 per diluted share, and included income of $11 million ($7 million or $.06 per diluted share after tax) associated with the refund of Alaskan Petroleum Production Tax credits which are earned for qualified capital expenditures and income of $2 million ($.02 per diluted share) from discontinued operations.

 

First quarter oil and gas sales exceeded expectations. Oil sales averaged 28,145 barrels per day (BPD), natural gas liquids sales averaged 19,408 BPD and gas sales averaged 376 million cubic feet per day (MMCFPD).

 

The reported first quarter average price for oil was $77.41 per barrel and included $10.17 per barrel related to deferred revenue from volumetric production payments (VPPs) for which

 


production was not recorded. The price for natural gas liquids was $53.89 per barrel. The reported price for gas was $7.74 per thousand cubic feet (MCF), including $.40 per MCF related to deferred revenue from VPPs for which production was not recorded.

 

First quarter production costs averaged $13.22 per BOE. Production costs were primarily impacted by (i) higher production taxes, electricity and fuel costs related to the increase in commodity prices, (ii) increased compressor maintenance in Raton, (iii) higher lease operating expenses associated with initiating production operations in the Cherouq Concession in Tunisia (formerly a part of the Jenein Nord block) and (iv) fixed costs associated with operating the Sable Floating Production Storage and Offloading vessel (FPSO) coupled with declining field production.

 

Exploration and abandonment costs were $39 million for the quarter and included $5 million of acreage and unsuccessful drilling costs and $34 million of geologic and geophysical expenses, including seismic costs related to ongoing activities in the Edwards Trend and Tunisia and personnel costs.

 

Cash flow from operating activities for the first quarter was $178 million.

 

Valuation

 

Pioneer recently updated its estimate of the Company’s net asset value (NAV) considering current proved reserves and net resource potential estimates. Utilizing an oil price of $85 per barrel, a gas price of $8.50 per MCF and a 10% present value discount rate, Pioneer estimates that its NAV is approximately $109 per share. At $100 per barrel and $10 per MCF, estimated NAV is approximately $153 per share. Approximately 50% of the estimated NAV is attributable to proved reserves.

 

In April, Pioneer completed the initial public offering of common units in Pioneer Southwest Energy Partners L.P. (PSE) and received net proceeds of $163 million in early May, including proceeds related to the underwriters’ exercise of their over-allotment option in full. PSE has interests in producing wells that had 34 million BOE of estimated proved reserves as of December 31, 2007, and average production of 5,367 BOEPD during 2007. Pioneer retained an ownership interest in PSE of approximately 68%.

 

Operations

In the Spraberry oil field, Pioneer is actively undertaking initiatives to capture additional resource potential and currently estimates that the field holds approximately 1 billion BOE of resource potential above current proved reserves. Spraberry production increased 21% in the first quarter of 2008 compared to first quarter 2007. The Company is running 16 rigs in the field, has drilled 94 wells in its 350-well program and expects Spraberry production to grow approximately 15% during 2008. Increased drilling activity beginning in 2009 and new resource recovery initiatives support expectations for 15% compound average annual growth in production through 2011.

 

Pioneer recently announced a new discovery in the Pierre Shale gas play in the Raton Basin in southeastern Colorado with more than two trillion cubic feet of net resource potential. The play is being developed under the existing Raton coal bed methane (CBM) field. A total of 10 vertical wells have been drilled; five wells drilled into the “fairway” proved commerciality of the Kp1 (lowest) interval and five other wells tested the areal extent of the play. Pioneer has initiated testing in the Kp2 and Kp3 intervals in several wells. This summer, the Company plans to begin assessing the potential upside from horizontal drilling. Pioneer expects to complete 175 wells

 

 


(160 CBM wells and approximately 15 Pierre Shale wells) during 2008 and increase production by approximately 15% from 2007 levels.

 

The Company’s active drilling program in the Edwards Trend in South Texas continues with 11 wells drilled in the first quarter. First quarter 2008 production was up 65% compared to the same quarter in 2007 and is expected to grow more than 25% in 2008 with the drilling of at least 35 development and appraisal wells. During the first quarter, Pioneer announced further success in a new large field that was discovered in the Edwards Trend during 2007. Several wells in the field have been tested with initial production rates ranging from 10 MMCFPD to 18 MMCFPD. While these rates are not indicative of expected stabilized production rates, they materially exceeded historical average initial test rates from wells drilled in the trend. Through the remainder of 2008, the Company is planning to add facility capacity of 25 MMCFPD to 50 MMCFPD to accommodate additional growth.

 

Pioneer has commenced a 20-well drilling program in the Barnett Shale, which includes participation with another operator in the drilling of six wells. Beginning in 2009, the Company plans to expand its Barnett drilling program with gas equivalent production expected to grow from a current level of approximately 15 MMCFPD to approximately 100 MMCFPD by 2011.

 

In Tunisia, Pioneer drilled three successful Silurian wells, one in the Cherouq Concession and two in the Adam Concession. Two of the wells also included new discoveries in the Ordovician and TAGI formations, with the new zones testing at combined rates of approximately 3,500 BOEPD. Construction of Cherouq production facilities is on schedule and the 3-D seismic program in Anaguid and Cherouq is approximately 70% complete. Pioneer plans to drill 15 to 17 wells in Tunisia during 2008 and increase daily production by 80% to 90%.

 

Offshore South Africa, production continues from Pioneer’s interests in the Sable oil field and the South Coast Gas (SCG) project. Facilities modifications are planned for late 2008/early 2009 to allow for simultaneous production of oil and gas from Sable which will significantly expand the gas produced through the SCG project and also result in lower operating costs once the Sable FPSO is released.

 

On the North Slope of Alaska, Pioneer has drilled the first producing well and a disposal well at Oooguruk. First production is expected during the second quarter of 2008 with first sales anticipated following the completion of scheduled mid-year maintenance at third-party onshore production facilities. The Company expects to have five to six producing wells and several injection wells drilled by year-end 2008, with net sales expected to reach 3 MBOPD to 4 MBOPD.

 

Financial Outlook

Second quarter 2008 production is forecasted to average 110,000 BOEPD to 115,000 BOEPD. Production growth is expected to continue during the second quarter, driven primarily by increasing production from Pioneer’s core onshore areas (Spraberry, Raton, Edwards and Tunisia). The forecasted second quarter production range includes approximately 1,100 BOEPD of production that is attributable to the public ownership in PSE. The expense estimates below also include portions attributable to the public ownership in PSE.

 

Second quarter production costs (including production and ad valorem taxes and transportation costs) are expected to average $12.75 to $13.75 per BOE based on current NYMEX strip prices for oil and gas. Depreciation, depletion and amortization expense is expected to average $10.75 to $11.75 per BOE.

 

 

 


Total exploration and abandonment expense during the second quarter is expected to be $40 million to $70 million, including up to $35 million associated with drilling in lower-risk resource plays in the Edwards Trend and Tunisia and $35 million of seismic (principally in the Edwards Trend and Tunisia) and personnel costs.

 

General and administrative expense is expected to be $34 million to $38 million. Interest expense is expected to be $36 million to $40 million. Accretion of discount on asset retirement obligations is expected to be $2 million to $4 million.

 

The Company’s second quarter effective income tax rate is expected to range from 40% to 50%based on current capital spending plans. Cash taxes are expected to be $15 million to $25 million and are primarily attributable to Tunisia.

 

Second quarter 2008 amortization of deferred losses on terminated oil and gas hedges is expected to be $30 million. The Company's financial results, oil and gas hedges and future VPP amortization are outlined on the attached schedules.

 

Earnings Conference Call  

On Wednesday, May 7 at 10:00 a.m. Eastern Time, Pioneer will discuss its 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 (877) 723-9509 (confirmation code: 9173534) 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: 9173534).

 

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, South Africa and Tunisia. 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 commodity prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, access to and availability of drilling equipment and transportation, processing and refining facilities, 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 and resource potential and the ability to add proved reserves in the future, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, and 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. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these statements except as required by law.

 

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.

 

A copy of the final prospectus relating to the initial public offering of common units in Pioneer Southwest Energy Partners L.P. may be obtained by submitting requests to Citigroup Global Markets Inc., Attention: Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220, phone: 718-765-6732, fax: 718-765-6734; Deutsche Bank Securities Inc., Attn: Prospectus Department, 100 Plaza One, 2nd Floor, Jersey City, NJ 07311, or by telephone at (800) 503-4611, or by email at prospectus.cpdg@db.com; or UBS Securities LLC, Attention: Prospectus Department, 299 Park Avenue, New York, New York 10171, phone: 212-821-3000. A registration statement relating to these securities has been filed with, and declared effective by, the Securities and Exchange Commission. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities law in any such state.

 

Pioneer does not consider “Net Asset Value” and “Net Asset Value Per Share” to be “non-GAAP financial measures,” as defined in SEC rules. Pioneer uses Net Asset Value as an estimate of fair value. Net Asset Value and Net Asset Value Per Share should not be considered as alternatives to Standardized Measure, Stockholders Equity or per share statements of those measures. Pioneer’s Net Asset Value calculation is based on numerous assumptions that may change as a result of future activities or circumstances.

 

Pioneer Natural Resources Contacts:

Investors

 

Frank Hopkins – 972-969-4065

 

James Meier – 972-969-3931

Media and Public Affairs

 

Susan Spratlen – 972-969-4018

 

 

 

 


PIONEER NATURAL RESOURCES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

March 31,

 

December 31,

 

 

 

2008

 

2007

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,320

 

$

12,171

 

Accounts receivable, net

 

 

295,882

 

 

283,832

 

Income taxes receivable

 

 

40,121

 

 

40,046

 

Inventories

 

 

124,386

 

 

97,619

 

Prepaid expenses

 

 

8,567

 

 

9,378

 

Deferred income taxes

 

 

163,098

 

 

108,073

 

Other current assets, net

 

 

39,263

 

 

213,936

 

 

 

 

 

 

 

 

 

Total current assets

 

 

688,637

 

 

765,055

 

 

 

 

 

 

 

 

 

Property, plant and equipment, at cost:

 

 

 

 

 

 

 

Oil and gas properties, using the successful efforts method of accounting

 

 

9,548,517

 

 

9,251,113

 

Accumulated depletion, depreciation and amortization

 

 

(2,130,805

)

 

(2,028,472

)

 

 

 

 

 

 

 

 

Total property, plant and equipment

 

 

7,417,712

 

 

7,222,641

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

9,780

 

 

10,263

 

Goodwill

 

 

310,861

 

 

310,870

 

Other assets, net

 

 

318,977

 

 

308,152

 

 

 

 

 

 

 

 

 

 

 

$

8,745,967

 

$

8,616,981

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

335,613

 

$

378,416

 

Interest payable

 

 

28,685

 

 

42,020

 

Income taxes payable

 

 

22,033

 

 

12,842

 

Deferred revenue

 

 

155,379

 

 

158,138

 

Other current liabilities

 

 

481,641

 

 

402,753

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

1,023,351

 

 

994,169

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,803,558

 

 

2,755,491

 

Deferred income taxes

 

 

1,291,212

 

 

1,229,677

 

Deferred revenue

 

 

288,422

 

 

325,142

 

Other liabilities and minority interests

 

 

288,520

 

 

269,780

 

Stockholders' equity

 

 

3,050,904

 

 

3,042,722

 

 

 

 

 

 

 

 

 

 

 

$

8,745,967

 

$

8,616,981

 

 

 

 


PIONEER NATURAL RESOURCES COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data)

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2008

 

2007

 

 

 

 

 

 

 

 

 

Revenues and other income:

 

 

 

 

 

 

 

Oil and gas

 

$

558,476

 

$

353,582

 

Interest and other

 

 

25,024

 

 

13,486

 

Gain on disposition of assets, net

 

 

678

 

 

251

 

 

 

 

584,178

 

 

367,319

 

Costs and expenses:

 

 

 

 

 

 

 

Oil and gas production

 

 

132,647

 

 

89,448

 

Depletion, depreciation and amortization

 

 

109,627

 

 

78,850

 

Exploration and abandonments

 

 

38,677

 

 

71,771

 

General and administrative

 

 

36,481

 

 

32,624

 

Accretion of discount on asset retirement obligations

 

 

2,142

 

 

1,632

 

Interest

 

 

37,453

 

 

28,425

 

Hurricane activity, net

 

 

458

 

 

13,548

 

Other

 

 

11,626

 

 

8,373

 

 

 

 

369,111

 

 

324,671

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

 

215,067

 

 

42,648

 

Income tax provision

 

 

(87,267

)

 

(14,632

)

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

127,800

 

 

28,016

 

Income from discontinued operations, net of tax

 

 

1,940

 

 

1,577

 

Net income

 

$

129,740

 

$

29,593

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.08

 

$

.23

 

Income from discontinued operations, net of tax

 

 

.02

 

 

.01

 

Net income

 

$

1.10

 

$

.24

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.07

 

$

.23

 

Income from discontinued operations, net of tax

 

 

.02

 

 

.01

 

Net income

 

$

1.09

 

$

.24

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

117,934

 

 

121,523

 

Diluted

 

 

119,092

 

 

122,794

 

 

 

 


PIONEER NATURAL RESOURCES COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2008

 

2007

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

129,740

 

$

29,593

 

Adjustments to reconcile net income to net cash provided
by operating activities:

 

 

 

 

 

 

 

Depletion, depreciation and amortization

 

 

109,627

 

 

78,850

 

Exploration expenses, including dry holes

 

 

3,548

 

 

43,418

 

Hurricane activity

 

 

 

 

19,000

 

Deferred income taxes

 

 

66,164

 

 

9,476

 

Gain on disposition of assets, net

 

 

(678

)

 

(251

)

Accretion of discount on asset retirement obligations

 

 

2,142

 

 

1,632

 

Discontinued operations

 

 

348

 

 

16,442

 

Interest expense

 

 

3,472

 

 

4,726

 

Commodity hedge related activity

 

 

7,665

 

 

5,899

 

Amortization of stock-based compensation

 

 

8,980

 

 

7,738

 

Amortization of deferred revenue

 

 

(39,479

)

 

(45,034

)

Other noncash items

 

 

(4,640

)

 

(6,283

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(14,061

)

 

(15,227

)

Income taxes receivable

 

 

(76

)

 

12,558

 

Inventories

 

 

(26,172

)

 

1,989

 

Prepaid expenses

 

 

937

 

 

1,156

 

Other current assets, net

 

 

1,995

 

 

212

 

Accounts payable

 

 

(33,913

)

 

(24,590

)

Interest payable

 

 

(13,335

)

 

(3,470

)

Income taxes payable

 

 

9,190

 

 

6,814

 

Other current liabilities

 

 

(33,772

)

 

(14,651

)

Net cash provided by operating activities

 

 

177,682

 

 

129,997

 

Net cash used in investing activities

 

 

(177,540

)

 

(447,455

)

Net cash provided by financing activities

 

 

5,007

 

 

323,643

 

Net increase in cash and cash equivalents

 

 

5,149

 

 

6,185

 

Effect of exchange rate changes on cash and cash equivalents

 

 

 

 

132

 

Cash and cash equivalents, beginning of period

 

 

12,171

 

 

7,033

 

Cash and cash equivalents, end of period

 

$

17,320

 

$

13,350

 

 

 

 

 


PIONEER NATURAL RESOURCES COMPANY

UNAUDITED SUMMARY PRODUCTION AND PRICE DATA

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

March 31,

 

 

 

 

 

2008

 

2007

 

Average Daily Sales Volumes

 

 

 

 

 

 

 

 

 

from Continuing Operations:

 

 

 

 

 

 

 

 

 

Oil (Bbls) -

 

 

U.S.

 

21,419

 

 

18,808

 

 

 

 

South Africa

 

2,823

 

 

2,347

 

 

 

 

Tunisia

 

3,903

 

 

4,093

 

 

 

 

Worldwide

 

28,145

 

 

25,248

 

 

 

 

 

 

 

 

 

 

 

Natural gas liquids (Bbls) -

 

 

U.S.

 

19,408

 

 

16,855

 

 

 

 

 

 

 

 

 

 

 

Gas (Mcf) -

 

 

U.S.

 

369,819

 

 

282,594

 

 

 

 

South Africa

 

5,073

 

 

 

 

 

 

Tunisia

 

1,578

 

 

 

 

 

 

Worldwide

 

376,470

 

 

282,594

 

 

 

 

 

 

 

 

 

 

 

Average Daily Sales Volumes

 

 

 

 

 

 

 

 

 

from Discontinued Operations:

 

 

 

 

 

 

 

 

 

Oil (Bbls) -

 

 

Canada

 

 

 

360

 

 

 

 

 

 

 

 

 

 

 

Natural gas liquids (Bbls) -

 

 

Canada

 

 

 

338

 

 

 

 

 

 

 

 

 

 

 

Gas (Mcf) -

 

 

Canada

 

 

 

47,713

 

 

 

 

 

 

 

 

 

 

 

Average Reported Prices (a):

 

 

 

 

 

 

 

 

 

Oil (per Bbl) -

 

 

U.S.

$

70.23

 

$

51.99

 

 

 

 

South Africa

$

101.48

 

$

62.43

 

 

 

 

Tunisia

$

99.36

 

$

59.51

 

 

 

 

Worldwide

$

77.41

 

$

54.18

 

 

 

 

 

 

 

 

 

 

 

Natural gas liquids (per Bbl) -

 

 

U.S.

$

53.89

 

$

31.68

 

 

 

 

 

 

 

 

 

 

 

Gas (per Mcf) -

 

 

U.S.

$

7.73

 

$

7.17

 

 

 

 

South Africa

$

7.61

 

$

 

 

 

 

Tunisia

$

10.90

 

$

 

 

 

 

Worldwide

$

7.74

 

$

7.17

 

 

_____________

(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

UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

(in thousands)

 

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,

 

 

 

2008

 

2007

 

 

 

 

 

 

 

 

 

Net income

 

$

129,740

 

$

29,593

 

Depletion, depreciation and amortization

 

 

109,627

 

 

78,850

 

Exploration and abandonments

 

 

38,677

 

 

71,771

 

Hurricane activity

 

 

 

 

19,000

 

Accretion of discount on asset retirement obligations

 

 

2,142

 

 

1,632

 

Interest expense

 

 

37,453

 

 

28,425

 

Income tax provision

 

 

87,267

 

 

14,632

 

Gain on disposition of assets, net

 

 

(678

)

 

(251

)

Discontinued operations

 

 

348

 

 

16,442

 

Current income tax provision on discontinued operations

 

 

519

 

 

4,494

 

Cash exploration and interest expense on discontinued operations

 

 

 

 

1,123

 

Commodity hedge related activity

 

 

7,665

 

 

5,899

 

Amortization of stock-based compensation

 

 

8,980

 

 

7,738

 

Amortization of deferred revenue

 

 

(39,479

)

 

(45,034

)

Other noncash items

 

 

(4,640

)

 

(6,283

)

 

 

 

 

 

 

 

 

EBITDAX (a)

 

 

377,621

 

 

228,031

 

 

 

 

 

 

 

 

 

Cash interest expense

 

 

(33,981

)

 

(23,768

)

Current income taxes

 

 

(21,622

)

 

(9,650

)

 

 

 

 

 

 

 

 

Discretionary cash flow (b)

 

 

322,018

 

 

194,613

 

 

 

 

 

 

 

 

 

Cash exploration expense

 

 

(35,129

)

 

(29,407

)

Changes in operating assets and liabilities

 

 

(109,207

)

 

(35,209

)

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

177,682

 

$

129,997

 

 

_____________

 

(a)

"EBITDAX" represents earnings before depletion, depreciation and amortization expense; exploration and abandonments; noncash hurricane activity; accretion of discount on asset retirement obligations; interest expense; income taxes; gain on the disposition of assets; noncash effects from discontinued operations; commodity hedge related activity; amortization of 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

 

Open Commodity Hedge Positions as of May 5, 2008

 

 

 

2008

 

 

 

 

 

 

 

Second

 

Third

 

Fourth

 

 

 

 

 

 

 

Quarter

 

Quarter

 

Quarter

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Daily Oil Production Hedged:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume (Bbl)

 

 

15,000

 

 

15,000

 

 

15,000

 

 

8,000

 

 

4,000

 

NYMEX price (Bbl)

 

$

65.46

 

$

65.46

 

$

65.46

 

$

79.43

 

$

85.21

 

Collar Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume (Bbl)

 

 

3,000

 

 

3,000

 

 

3,000

 

 

2,000

 

 

 

NYMEX price (Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ceiling

 

$

80.80

 

$

80.80

 

$

80.80

 

$

76.50

 

$

 

Floor

 

$

65.00

 

$

65.00

 

$

65.00

 

$

65.00

 

$

 

Average Daily Natural Gas Liquid Production Hedged:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume (Bbl)

 

 

1,000

 

 

1,000

 

 

1,000

 

 

1,000

 

 

1,000

 

Blended index price (Bbl) (a)

 

$

50.74

 

$

50.74

 

$

50.74

 

$

47.41

 

$

46.15

 

Average Daily Gas Production Hedged:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume (MMBtu)

 

 

215,000

 

 

215,000

 

 

201,739

 

 

19,795

 

 

5,000

 

NYMEX price (MMBtu) (b)

 

$

8.37

 

$

8.37

 

$

8.40

 

$

9.45

 

$

8.54

 

 

_____________

(a)

Represents blended Mont Belvieu posted price per Bbl.

(b)

Approximate, based on historical differentials to index prices.

 

Amortization of Deferred Revenue Associated with Volumetric

Production Payments and Net Derivative Losses as of March 31, 2008

(in thousands)

 

 

 

2008

 

 

 

 

 

 

 

 

 

Second

 

Third

 

Fourth

 

 

 

 

 

 

 

 

 

Quarter

 

Quarter

 

Quarter

 

2009

 

Thereafter

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deferred revenues (a)

 

 

39,457

 

 

39,707

 

 

39,495

 

$

147,906

 

$

177,236

 

$

443,801

 

Less derivative losses to be recognized in pretax earnings (b)

 

 

(372

)

 

(284

)

 

(839

)

 

(3,613

)

 

(9,133

)

 

(14,241

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total VPP impact to pretax earnings

 

$

39,085

 

$

39,423

 

$

38,656

 

$

144,293

 

$

168,103

 

$

429,560

 

 

_____________

(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.

 

 

 


PIONEER NATURAL RESOURCES COMPANY

 

SUPPLEMENTAL INFORMATION

 

Deferred Losses on Terminated Commodity Hedges as of March 31, 2008(a)

(in thousands)

 

 

 

 

2008

 

 

 

 

 

 

 

 

 

Second

 

Third

 

Fourth

 

 

 

 

 

 

 

 

 

Quarter

 

Quarter

 

Quarter

 

2009

 

2010

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity hedge losses (b)

 

$

29,639

 

$

29,601

 

$

29,237

 

$

20,709

 

$

17,783

 

$

 

 

 

_____________

(a)

Excludes deferred hedge gains and losses on terminated derivatives related to the VPPs.

(b)

Deferred commodity hedge losses will be amortized as decreases to oil and gas revenues during the indicated future periods.

 

 

 

 

 

GRAPHIC 3 img1.jpg GRAPHIC begin 644 img1.jpg M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T- M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#TOQ?K=WX< M\.7.KVMI'=&U`:2)Y"F5S@D'!Y&K0O-IO@F:[C0X9X9'<`^F M0G6NW^(O_)/=;_Z]6KE_@/\`\B7=_P#7\W_H"4`+H/QHT^\U-=-UW3)M'N&; M9N=MR*WHV0"OY5Z7U&17BOQ]BL3>Z/Y2*=1=7#A!\S)D;<_CG'XUZQX;@NK; MPSID%]G[3':1++GKN"C.:`.'N_B?K%MX[_X1(:):M<&X6%9OM#!2&P0V-OH< MXKTH9P,]>]>':K_R<=!_U\0_^B17N5`&9KWB'2_#.FM?ZK$7GMT.!/<$D'\B`#[9-TM+>PM(K2TA2"")0J1H,!10!Y5-\4_%_AR6,^*O"0BMW. M/-AW+^1)92?;(KT7PYXFTKQ5I@O]*N/,CSM=&&'C;T8=C5Z_L+74[&:RO8$G MMYE*R1N,@BO`]`EN/AO\7&TD2L;*:=;=PW\<3X*,?<9'ZT`?03;MAV8W8XST MS7ET7QE>S\6MH>O:3%91Q3M!-<1SEPA!P&Q@?+T_"O4Z\"O_``@?&/CWQE:0 M$+>VY\ZV).`S`@%3]0>OKB@#WQ65U#*0RD9!!R"*P/&NOWWACP]+K%G917B6 MY'G1O(4(4D#(.#W(K@OA'XZF27_A#M=9H[F`E+1I>#QUB.>X[?EZ5V?Q-_Y) MSK7_`%P'_H0H`L>"?$-]XI\/QZQ>6,5FD['R8TD+DJ"02>!CD&L[XA^-[WP/ M;VEW%IL5Y;W#F,EI2C(V,CL<@C/Y5/\`"_\`Y)QHW_7%O_0VKF?CW_R*>G_] M?P_]`:@"&V^+/BJ\MTN;;P%=30N-RR(9"K#U!V+-)N+R\TXZ?- M!<-"8"22,*IYR`1UJAX*\3Z!:>"='@N=;L(I8[.-71[E`RD#H03Q78QF-T$L M14K(`VY?XAC@^_%`%+7;VZTW1+N^LX([B:VB:412,5#A1DC(S@X%>7Z?\:-> MU;?_`&=X,DO/+QO\B1WVYZ9PG%>H:]_R+VI?]>DO_H!KR+X&ZQIFEV>L#4-1 MMK0R21%!/*J;L!LXR>:`.M\+?$+6M;\31:/JGAF72A+$\@>4MD[1T`*C->@5 M4L=1T[58S/87=O=I&VTO"X<*<=,CO@U;H`\JU7XM:WIWBJX\.1>&HKR[BE\M M!#.V9.,@@;?3FENOBYKFAS1GQ%X+N+*WD.!()#^F5P3[9%8%Q_R<>G_7RO\` MZ)KOOBU?Z;:^`;^"^>,RW"A+:-L;F?((('MUS0!TVB:U8^(=)@U/39O-MYAE M3C!![@CL15^O.O@CIM[8>"GENU9$N[EI8$;^YM`S^)!KT6@#FOB+_P`D]UO_ M`*]6KB_@S:WEWX"O(K+4&L)#?M^]6)9#C8G9N*Z[XG74-K\/=7\Z15,L/EH" M>68D``5ROP%OK<^';_3_`#`+F.Z\TQGJ4*J`?S!H`Z?2/AQI-AK)UN_N+K5] M3SN%Q>L&V'L54``8[>G:NNHHH`\-U7_DXZ#_`*^(?_1(KW*O`M5U2T_X:`2^ M\Y?LT=Y%&TN?E!"!3S[&O?`?!TH\/?&Q[>]^0M=SV^6]6SM/X\?G7 MT/7EWQ3^&USKEP/$.@K_`,3&,#SH5.#+MZ,I_O#]<#TYK>'?C1#9VRZ?XNLK MJUOH!M>58L[\=V4X(-`'K5>`>/$_MKXW06=G\[B:WB8CL1@M^0_E76:Q\:K6 MYC-GX4TV[O[^4;8V>+"J?7:,EOIQ5CX9_#V]TF]E\3>(SOU:YW%(V.3%N^\S M'^\?T&?7@`]+KR[P1_R67Q?_`+O_`+,M>H,P52S$``9)/:O(/`6MV$_QB\1. MDZ[+[>MLYX$I5AT^H!(H`L_%WP%)B1LE[;8>Z2+AG5>D@Q_$N.?8>U5 M1X\3QA\(M:M[I@NJVEL!.O\`SU7P$`C!&0:\!^*/@.X\+W\VM M:(KIIEX"LZ1]("W53_L'MZ=/2@#U/X7_`/).-&_ZXM_Z&U_^12T__K^' M_H#5TOPO_P"2<:-_UQ;_`-#:N4^/EU%_8&FV8<&=[HR!`>=H4@G'IDB@!_AC MX3^$]8\(:;?7-K<"YNK5'>1+AA\Q')`Z?I7I]K;K:6D-LA++#&J`GJ0!BO'? M#/QGTO1?#EAI=QI%\[VD"Q%XRI#$#&>2*WO#WQ3N/&'B>UTC2-):V@.9+F>X M;+;;4WUBWDE:V>,1 ME)63`(;/3Z"O:?%-W!8^%=4N+B18T6TD&2>I*D`?4FO"/AI\0+7P/%?Q7FGW M-R+MD8-"0-NT'L?K0![EX8\*:;X2LY[/2_-6":;S=LC[MIP!P?3BMNO);OX] M69B*:;H%W+.W""9PJY_#)->HZ<;LZ;;F_*?:S&IFV#"AR.0/8'B@#Q.\02?M M%A"64-<*,J<$9A[&J)M(/!_Q/^S^-HGU:SD/[B[NV9\*3\LF"<''0@].:DN- M3M/^&@!?>_Y M]J`.DB,;1(T14QE04*]".V/:GUXMX"\>7G@V\/A+Q@DEM%"VV">4?ZGV)[IZ M'M].GLT4LZQ%90PS"VNKE)EW*;>$O@8SSCIUHYD!S M'_"S/"/_`#QO/_!=)_\`$U)_PM7PP.^H?^`,O^%;>F>);75I(UMK2]V29VS/ M`1'Q_M?A5JRU>UO].>_@W^2A<'7).<#'X4ZR\ M0V=[??83'M',NX7.8M/B)X*L`19V=Q;`]?)TQTS^2U9_ MX6KX8]=0_P#`&7_"N@U;7[#19+>.\9PURVU-JYQTY/H.:L:CJ5OI<"37&_8\ MJQ#:,_,QP*=T.YRY^*GA@@@_;R#V^P2_X5&/B;X24@B*\!'0C3I./_':[>H+ MZ\BT^RFO)]WE0H7;:,G`I@NH?^`,O^%-D^*/A6:-HY5OG1AAE: MPD((]",5LIXLL"\'GV]Y:QW!`CEG@*HQ/3GWJQJ/B"VTV^CLG@NIYY(_,"V\ M)?YXKG,V?Q(\'Z?:I:V<-Y!!'G9''I\@5SPW-I#;\N;F(H<>P[U7M_$]K-<6\,UI>6@NCB"2XAV MK(>P!SP3[T?^"Z3_`.)KJ(M9M)M$_MA/,^S> M69.5^;`SGC\*AN_$-I:6]E,8KB7[<,PI%'N8\9Z?2ES(+G.CXF^$@ZFMHK6[O'MQ^_-M%N$??!.1S["CF5KA

$?\`GC>?^"Z3_P")J3_A M:OACUU#_`,`9?\*WI_$>GPZ3#J@:2:WG94C\I,L6/;'U&*=8ZVE_<^0MA?P' M!.^>W*+^=',M@NAIJ2>P[G/^,(DGCTJ&50TEIJ9M"\K)]EN%G7:/O%>Q_.JM_X;MK[7;35S*\#\O3],5HZ?I26%U>W(E:66]E\QRPZ`#`4>PI++28[&]O[F.5B+UP[1D#" MMC!(^M"BU*X[:E'P3_R*=G]7_P#0VJIX8_Y$RX_WKC^;5MZ/IB:/ID5C'(TB MQ;L,PY.23_6LUO#$L:W%O9ZM/:V5RS,\"QJV-WW@K'D`T6:2$8;&5?"?A]F\:V`UB**!T@D-JL#;U<[1@`U)=Z2EUJMEJ/FLDEGO`4`$.&&"#2Y'^06.3UNZL-1UK M5X[N5E$%K]EM\1LW[P_,3P#CG`JSJ-__`&EX+TFZ)R[7,`?_`'@V#^HKI-(T MI-)MI(5E:9I96EDD<#+,QK/D\*1-ILUC'>2QH]W]J0A03&[?RI;+2[^VNEEGUNXNHP#F)XT`/X@9JUJ5DNI:=<63N46>, MH67J,UH[M,9QVIRZG)H6F0ZE;P0Z:[P!Y89"\F.-O!`QGC/6M'5?MP\<6O\` M9PMS-]@;_CX+;<;_`&YS6MJ&AQ7^B1Z6TSHL8CVR*!G*8P?TJ/4=!DO=2BU" M#4IK2>.'RLQHIR"&YYY+<:EJ\][!;.'CA,:H"PZ%B/O8IM/H!'9\^/M1+=5LX@F?3//ZU M%;<>+=?"?<-K$6Q_>VG^E:6HZ*;J^CU"TO)+*\C0QF1%#!TZX93UYJ32M'CT MU9V>9[FXNFW3S28RYQ@#`X``[4M<+#X3:UC M228+\BR-M4_NAU-:/_"*.MJ^G1ZO<)IKDYM@BY"DY*A^H%:-QHT,]SITJNT8 MT]B8T4<$%=N#2Y7;[A6,;3VNIO&Y;5HTANH[/_1TA.Y"A;DECSG/;%6/!WS6 MNI,W^L;49M^>N7NQ(JG.X`\AN]=%I-S; M7FE6UQ9IY=O)&#&F,;1Z8]JRAX7FAAFM+/6+BVL9F8F!8U)4-U"L>0*VK.TA 2L+.*TMUVQ0J%4>PIP33!'__9 ` end GRAPHIC 4 img2.gif GRAPHIC begin 644 img2.gif M1TE&.#EA?P("`'<`,2'^&E-O9G1W87)E.B!-:6-R;W-O9G0@3V9F:6-E`"'Y M!`$`````+`$``0!^`@$`@`````````(7C(^IR^T/HYRTVHNSWKS[#X;B2);F $R10`.S\_ ` end -----END PRIVACY-ENHANCED MESSAGE-----