ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 75-2702753 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5205 N. O'Connor Blvd., Suite 200, Irving, Texas | 75039 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common Stock, par value $.01 per share | PXD | New York Stock Exchange |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | o | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
Number of shares of Common Stock outstanding as of May 6, 2019 | 168,423,736 |
Page | ||
• | "Bbl" means a standard barrel containing 42 United States gallons. |
• | "Bcf" means one billion cubic feet and is a measure of gas volume. |
• | "BOE" means a barrel of oil equivalent and is a standard convention used to express oil and gas volumes on a comparable oil equivalent basis. Gas equivalents are determined under the relative energy content method by using the ratio of six thousand cubic feet of gas to one Bbl of oil or natural gas liquid. |
• | "BOEPD" means BOE per day. |
• | "Brent" means Brent oil price, a major trading classification of light sweet oil that serves as a benchmark price for purchases of oil worldwide. |
• | "Btu" means British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit. |
• | "DD&A" means depletion, depreciation and amortization. |
• | "GAAP" means accounting principles generally accepted in the United States of America. |
• | "HH" means Henry Hub, a distribution hub in Louisiana that serves as the delivery location for gas futures contracts on the NYMEX. |
• | "MBbl" means one thousand Bbls. |
• | "MBOE" means one thousand BOEs. |
• | "Mcf" means one thousand cubic feet and is a measure of gas volume. |
• | "MMBtu" means one million Btus. |
• | "Mont Belvieu" means the daily average natural gas liquids components as priced in OPIS in the table "U.S. and Canada LP – Gas Weekly Averages" at Mont Belvieu, Texas. |
• | "NGL" means natural gas liquid, which are the heavier hydrocarbon liquids that are separated from the gas stream; such liquids include ethane, propane, isobutane, normal butane and natural gasoline. |
• | "NYMEX" means the New York Mercantile Exchange. |
• | "Pioneer" or the "Company" means Pioneer Natural Resources Company and its subsidiaries. |
• | "Proved reserves" mean those quantities of oil and gas, which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. |
• | "SEC" means the United States Securities and Exchange Commission. |
• | "U.S." means United States. |
• | "WTI" means West Texas Intermediate, a light sweet blend of oil produced from fields in western Texas and is a grade of oil used as a benchmark in oil pricing. |
• | With respect to information on the working interest in wells, drilling locations and acreage, "net" wells, drilling locations and acres are determined by multiplying "gross" wells, drilling locations and acres by the Company's working interest in such wells, drilling locations or acres. Unless otherwise specified, wells, drilling locations and acreage statistics quoted herein represent gross wells, drilling locations or acres. |
• | All currency amounts are expressed in U.S. dollars. |
ITEM 1. | FINANCIAL STATEMENTS |
March 31, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 511 | $ | 825 | |||
Short-term investments | 445 | 443 | |||||
Accounts receivable: | |||||||
Trade, net | 870 | 694 | |||||
Due from affiliates | 7 | 120 | |||||
Income taxes receivable | 6 | 7 | |||||
Inventories | 253 | 242 | |||||
Derivatives | 30 | 52 | |||||
Investment in affiliate | 347 | 172 | |||||
Other | 36 | 25 | |||||
Total current assets | 2,505 | 2,580 | |||||
Oil and gas properties, successful efforts method of accounting: | |||||||
Proved properties | 22,038 | 21,165 | |||||
Unproved properties | 607 | 601 | |||||
Accumulated depletion, depreciation and amortization | (8,600 | ) | (8,218 | ) | |||
Total oil and gas properties, net | 14,045 | 13,548 | |||||
Other property and equipment, net | 1,072 | 1,291 | |||||
Operating lease right-of-use assets | 356 | — | |||||
Long-term investments | 11 | 125 | |||||
Goodwill | 264 | 264 | |||||
Other assets | 102 | 95 | |||||
$ | 18,355 | $ | 17,903 |
March 31, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable: | |||||||
Trade | $ | 1,536 | $ | 1,441 | |||
Due to affiliates | 181 | 183 | |||||
Interest payable | 25 | 53 | |||||
Income taxes payable | 2 | 2 | |||||
Current portion of long-term debt | 449 | — | |||||
Derivatives | 22 | 27 | |||||
Operating leases | 145 | — | |||||
Other | 172 | 112 | |||||
Total current liabilities | 2,532 | 1,818 | |||||
Long-term debt | 1,836 | 2,284 | |||||
Deferred income taxes | 1,255 | 1,152 | |||||
Operating leases | 217 | — | |||||
Other liabilities | 306 | 538 | |||||
Equity: | |||||||
Common stock, $.01 par value; 500,000,000 shares authorized; 174,828,478 and 174,321,171 shares issued as of March 31, 2019 and December 31, 2018, respectively | 2 | 2 | |||||
Additional paid-in capital | 9,086 | 9,062 | |||||
Treasury stock at cost: 6,406,441 and 4,822,069 shares as of March 31, 2019 and December 31, 2018, respectively | (645 | ) | (423 | ) | |||
Retained earnings | 3,766 | 3,470 | |||||
Total equity | 12,209 | 12,111 | |||||
Commitments and contingencies | |||||||
$ | 18,355 | $ | 17,903 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Revenues and other income: | |||||||
Oil and gas | $ | 1,135 | $ | 1,266 | |||
Sales of purchased oil and gas | 1,109 | 1,070 | |||||
Interest and other | 191 | 18 | |||||
Derivative loss, net | (13 | ) | (208 | ) | |||
Gain (loss) on disposition of assets, net | (9 | ) | 4 | ||||
2,413 | 2,150 | ||||||
Costs and expenses: | |||||||
Oil and gas production | 221 | 213 | |||||
Production and ad valorem taxes | 68 | 76 | |||||
Depletion, depreciation and amortization | 421 | 357 | |||||
Purchased oil and gas | 957 | 1,054 | |||||
Exploration and abandonments | 20 | 35 | |||||
General and administrative | 94 | 90 | |||||
Accretion of discount on asset retirement obligations | 3 | 4 | |||||
Interest | 29 | 36 | |||||
Other | 147 | 57 | |||||
1,960 | 1,922 | ||||||
Income before income taxes | 453 | 228 | |||||
Income tax provision | (103 | ) | (50 | ) | |||
Net income attributable to common stockholders | $ | 350 | $ | 178 | |||
Basic and diluted net income per share attributable to common stockholders | $ | 2.06 | $ | 1.04 | |||
Weighted average shares outstanding: | |||||||
Basic | 169 | 170 | |||||
Diluted | 169 | 171 | |||||
Dividends declared per share | $ | 0.32 | $ | 0.16 |
Equity Attributable To Common Stockholders | ||||||||||||||||||||||||||
Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Noncontrolling Interests | Total Equity | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Balance as of December 31, 2018 | 169,499 | $ | 2 | $ | 9,062 | $ | (423 | ) | $ | 3,470 | $ | — | $ | 12,111 | ||||||||||||
Dividends declared ($0.32 per share) | — | — | — | — | (54 | ) | — | (54 | ) | |||||||||||||||||
Exercise of long-term incentive stock options | 10 | — | — | — | — | — | — | |||||||||||||||||||
Purchases of treasury stock | (1,594 | ) | — | — | (222 | ) | — | — | (222 | ) | ||||||||||||||||
Stock-based compensation costs: | ||||||||||||||||||||||||||
Issued awards | 507 | — | — | — | — | — | — | |||||||||||||||||||
Compensation costs included in net income | — | — | 24 | — | — | — | 24 | |||||||||||||||||||
Net income | — | — | — | — | 350 | — | 350 | |||||||||||||||||||
Balance as of March 31, 2019 | 168,422 | $ | 2 | $ | 9,086 | $ | (645 | ) | $ | 3,766 | $ | — | $ | 12,209 | ||||||||||||
Equity Attributable To Common Stockholders | ||||||||||||||||||||||||||
Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Noncontrolling Interests | Total Equity | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Balance as of December 31, 2017 | 170,189 | $ | 2 | $ | 8,974 | $ | (249 | ) | $ | 2,547 | $ | 5 | $ | 11,279 | ||||||||||||
Dividends declared ($0.16 per share) | — | — | — | — | (27 | ) | — | (27 | ) | |||||||||||||||||
Purchases of treasury stock | (262 | ) | — | — | (45 | ) | — | — | (45 | ) | ||||||||||||||||
Stock-based compensation costs: | ||||||||||||||||||||||||||
Issued awards | 492 | — | — | — | — | — | — | |||||||||||||||||||
Compensation costs included in net income | — | — | 17 | — | — | — | 17 | |||||||||||||||||||
Net income | — | — | — | — | 178 | — | 178 | |||||||||||||||||||
Balance as of March 31, 2018 | 170,419 | $ | 2 | $ | 8,991 | $ | (294 | ) | $ | 2,698 | $ | 5 | $ | 11,402 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 350 | $ | 178 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depletion, depreciation and amortization | 421 | 357 | |||||
Impairment of inventory and other property and equipment | 32 | — | |||||
Exploration expenses, including dry holes | 1 | 5 | |||||
Deferred income taxes | 103 | 50 | |||||
(Gain) loss on disposition of assets, net | 9 | (4 | ) | ||||
Accretion of discount on asset retirement obligations | 3 | 4 | |||||
Interest expense | 1 | 1 | |||||
Derivative related activity | 17 | 136 | |||||
Amortization of stock-based compensation | 24 | 17 | |||||
Investment in affiliate fair value adjustment | (174 | ) | — | ||||
Other | 62 | 22 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | (69 | ) | (181 | ) | |||
Inventories | (36 | ) | (6 | ) | |||
Investments | — | 3 | |||||
Other current assets | (15 | ) | (3 | ) | |||
Accounts payable | (74 | ) | (9 | ) | |||
Interest payable | (29 | ) | (21 | ) | |||
Income taxes payable | — | 1 | |||||
Other current liabilities | (22 | ) | 5 | ||||
Net cash provided by operating activities | 604 | 555 | |||||
Cash flows from investing activities: | |||||||
Proceeds from disposition of assets, net of cash sold | 6 | 4 | |||||
Proceeds from investments | 112 | 554 | |||||
Purchase of investments | — | (94 | ) | ||||
Additions to oil and gas properties | (741 | ) | (818 | ) | |||
Additions to other assets and other property and equipment | (72 | ) | (51 | ) | |||
Net cash used in investing activities | (695 | ) | (405 | ) | |||
Cash flows from financing activities: | |||||||
Purchase of treasury stock | (222 | ) | (45 | ) | |||
Payments of other liabilities | (1 | ) | — | ||||
Net cash used in financing activities | (223 | ) | (45 | ) | |||
Net increase (decrease) in cash and cash equivalents | (314 | ) | 105 | ||||
Cash and cash equivalents, beginning of period | 825 | 896 | |||||
Cash and cash equivalents, end of period | $ | 511 | $ | 1,001 |
• | In March 2019, the Company made certain changes to its leadership and organizational structure to align its cost structure with the needs of a Permian Basin-focused company. These changes included the early retirement and departure of certain officers of the Company. During the three months ended March 31, 2019, the Company recorded $12 million of employee-related charges associated with these changes. See Note 15 for additional information. |
• | In December 2018, the Company completed the sale of its pressure pumping assets to ProPetro Holding Corp. ("ProPetro") in exchange for total consideration of $282 million, of which $110 million was received in the first quarter of 2019. See Note 12 for additional information. During the three months ended March 31, 2019, the Company reduced the gain associated with the sale by $10 million and recorded additional employee-related charges of $1 million related to the sale. |
• | In November 2018, the Company announced plans to close its sand mine located in Brady, Texas and transition its proppant supply requirements to West Texas sand sources. During the three months ended March 31, 2019, the Company recorded $23 million of accelerated depreciation and $16 million of inventory and other property and equipment impairment charges associated with the planned shutdown. |
Employee-related charges: | |||
Beginning employee-related obligations | $ | 27 | |
Additions (Note 15) | 13 | ||
Cash payments | (10 | ) | |
Noncash changes (Note 8) | (4 | ) | |
Ending employee-related obligations | 26 | ||
Contract termination charges: | |||
Beginning contract termination obligations | 111 | ||
Cash payments | (9 | ) | |
Ending contract termination obligations (a) | 102 | ||
Total restructuring obligations | $ | 128 |
(a) | Includes $90 million of deficiency charges related to certain firm transportation contracts associated with the divestiture of the Company's gas field assets in the Raton Basin. These obligations were retained by the Company and are expected to be paid as follows: $30 million in 2019, $43 million in 2020 and $17 million in 2021. |
• | Level 1 – quoted prices for identical assets or liabilities in active markets. |
• | Level 2 – quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 – unobservable inputs for the asset or liability, typically reflecting management's estimate of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore, determined using model-based techniques, including discounted cash flow models. |
Fair Value Measurement as of March 31, 2019 Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value as of March 31, 2019 | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Commodity derivatives | $ | — | $ | 30 | $ | — | $ | 30 | |||||||
Deferred compensation plan assets | 89 | — | — | 89 | |||||||||||
Investment in affiliate | — | 347 | — | 347 | |||||||||||
Total assets | 89 | 377 | — | 466 | |||||||||||
Liabilities: | |||||||||||||||
Commodity derivatives | — | 22 | — | 22 | |||||||||||
Total liabilities | — | 22 | — | 22 | |||||||||||
$ | 89 | $ | 355 | $ | — | $ | 444 |
Fair Value Measurement as of December 31, 2018 Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair value as of December 31, 2018 | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Commodity derivatives | $ | — | $ | 52 | $ | — | $ | 52 | |||||||
Deferred compensation plan assets | 82 | — | — | 82 | |||||||||||
Investment in affiliate | — | 172 | — | 172 | |||||||||||
Total assets | 82 | 224 | — | 306 | |||||||||||
Liabilities: | |||||||||||||||
Commodity derivatives | — | 27 | — | 27 | |||||||||||
Total liabilities | — | 27 | — | 27 | |||||||||||
$ | 82 | $ | 197 | $ | — | $ | 279 |
As of March 31, 2019 | As of December 31, 2018 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Cash (a) | $ | 461 | 461 | $ | 775 | $ | 775 | ||||||||
Time deposits (a) | 50 | 50 | 50 | 50 | |||||||||||
Total | $ | 511 | $ | 511 | $ | 825 | $ | 825 | |||||||
Short-term investments: | |||||||||||||||
Commercial paper (b) | $ | 21 | 21 | $ | 53 | 53 | |||||||||
Corporate bonds (c) | 374 | 374 | 290 | 288 | |||||||||||
Time deposits (b) | 50 | 50 | 100 | 100 | |||||||||||
Total | $ | 445 | $ | 445 | $ | 443 | $ | 441 | |||||||
Long-term investments: | |||||||||||||||
Corporate bonds (c) | $ | 11 | $ | 11 | $ | 125 | $ | 125 | |||||||
Liabilities: | |||||||||||||||
Current portion of long-term debt (d) | $ | 449 | $ | 466 | $ | — | $ | — | |||||||
Long-term debt (d) | $ | 1,836 | $ | 1,948 | $ | 2,284 | $ | 2,374 |
(a) | Fair value approximates carrying value due to the short-term nature of the instruments. |
(b) | Fair value is determined using Level 2 inputs. |
(c) | Fair value is determined using Level 1 inputs. |
(d) | Fair value is determined using Level 2 inputs. The Company's senior notes are quoted but not actively traded on major exchanges; therefore, fair value is based on periodic values as quoted on major exchanges. |
2019 | |||||||||||
Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Brent collar contracts with short puts: | |||||||||||
Volume per day (Bbl) (a) | 15,000 | 15,000 | 15,000 | ||||||||
Price per Bbl: | |||||||||||
Ceiling | $ | 89.90 | $ | 89.90 | $ | 89.90 | |||||
Floor | $ | 75.00 | $ | 75.00 | $ | 75.00 | |||||
Short put | $ | 65.00 | $ | 65.00 | $ | 65.00 |
(a) | Subsequent to March 31, 2019, the Company entered into additional Brent collar contracts with short puts for (i) 30,000 Bbls per day of May through December 2019 production with an average ceiling price of $75.13 per Bbl, a floor price of $65.00 per Bbl and a short put price of $55.00 per Bbl and (ii) 9,000 Bbls per day of 2020 production with a ceiling price of $75.57, a floor price of $65.00 and a short put price of $55.00. |
2019 | |||||||||||
Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Swap contracts: | |||||||||||
Volume per day (MMBtu) | 50,000 | 50,000 | 16,848 | ||||||||
Price per MMBtu | $ | 2.94 | $ | 2.94 | $ | 2.94 | |||||
Basis swap contracts: | |||||||||||
Permian Basin index swap volume per day(MMBtu) (a) | 60,000 | 60,000 | — | ||||||||
Price differential ($/MMBtu) | $ | (1.46 | ) | $ | (1.46 | ) | $ | — | |||
Southern California index swap volume per day (MMBtu) (b) | 80,000 | 80,000 | 80,000 | ||||||||
Price differential ($/MMBtu) | $ | 0.31 | $ | 0.31 | $ | 0.31 |
(a) | The referenced basis swap contracts fix the basis differentials between the index price at which the Company sells its Permian Basin gas and the HH price used in swap contracts. |
(b) | The referenced basis swap contracts fix the basis differentials between Permian Basin index prices and southern California index prices for Permian Basin gas forecasted for sale in Arizona and southern California. |
Fair Value of Derivative Instruments as of March 31, 2019 | ||||||||||||||
Type | Consolidated Balance Sheet Location | Fair Value | Gross Amounts Offset in the Consolidated Balance Sheet | Net Fair Value Presented in the Consolidated Balance Sheet | ||||||||||
(in millions) | ||||||||||||||
Asset Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 36 | $ | (6 | ) | $ | 30 | ||||||
Liability Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 28 | $ | (6 | ) | $ | 22 |
Fair Value of Derivative Instruments as of December 31, 2018 | ||||||||||||||
Type | Consolidated Balance Sheet Location | Fair Value | Gross Amounts Offset in the Consolidated Balance Sheet | Net Fair Value Presented in the Consolidated Balance Sheet | ||||||||||
(in millions) | ||||||||||||||
Asset Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 59 | $ | (7 | ) | $ | 52 | ||||||
Liability Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 34 | $ | (7 | ) | $ | 27 |
Derivatives Not Designated as Hedging Instruments | Location of Loss Recognized in Earnings on Derivatives | Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||||
(in millions) | ||||||||||
Commodity price derivatives | Derivative loss, net | $ | 13 | $ | 208 |
Three Months Ended March 31, 2019 | |||
(in millions) | |||
Beginning capitalized exploratory well costs | $ | 509 | |
Additions to exploratory well costs pending the determination of proved reserves | 647 | ||
Reclassification due to determination of proved reserves | (406 | ) | |
Ending capitalized exploratory well costs | $ | 750 |
As of March 31, 2019 | As of December 31, 2018 | ||||||
(in millions, except well counts) | |||||||
Capitalized exploratory well costs that have been suspended: | |||||||
One year or less | $ | 750 | $ | 509 | |||
More than one year | — | — | |||||
$ | 750 | $ | 509 | ||||
Number of wells or projects with exploratory well costs that have been suspended for a period greater than one year | — | — |
Three Months Ended March 31, 2019 | ||||||||
Restricted Stock Equity Awards | Restricted Stock Liability Awards | Performance Units | ||||||
Beginning incentive compensation awards | 799,672 | 201,501 | 119,169 | |||||
Awards granted | 470,204 | 125,607 | 86,483 | |||||
Awards forfeited | (3,201 | ) | (2,026 | ) | — | |||
Awards vested (a) | (391,446 | ) | (101,219 | ) | (39,793 | ) | ||
Ending incentive compensation awards | 875,229 | 223,863 | 165,859 |
(a) | Per the terms of award agreements and elections, the issuance of common stock may be deferred for certain restricted stock equity awards and performance units that vest during the period. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Beginning asset retirement obligations | $ | 183 | $ | 271 | |||
New wells placed on production | — | 1 | |||||
Changes in estimates | — | 2 | |||||
Obligations reclassified to liabilities held for sale | — | (6 | ) | ||||
Liabilities settled | (6 | ) | (9 | ) | |||
Accretion of discount | 3 | 4 | |||||
Ending asset retirement obligations | $ | 180 | $ | 263 |
Three Months Ended March 31, 2019 | |||
($ in millions) | |||
Lease costs: | |||
Operating lease cost (a) | $ | 45 | |
Short-term lease cost (b) | 6 | ||
Variable lease cost (c) | 19 | ||
Total lease costs | $ | 70 | |
Other information: | |||
Cash paid for amounts included in lease costs (d): | |||
Operating cash flows from operating leases | $ | 21 | |
Investing cash flows from operating leases (e) | $ | 49 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 88 | |
Weighted-average remaining lease term - operating leases | 3.4 years | ||
Weighted-average discount rate - operating leases | 3.3 | % |
(a) | Represents straight-line rent cost associated with the Company's operating lease right-of-use assets. |
(b) | Represents costs associated with short-term leases (those with a contractual term of 12 months or less) that are not recorded on the consolidated balance sheet. |
(c) | Variable lease costs are primarily comprised of the non-lease service component of drilling rig commitments above the minimum required payments. Both the minimum required payments and the non-lease service component of the drilling rig commitments are capitalized as additions to oil and gas properties. |
(d) | Cash paid for amounts included in total lease costs may not agree due to timing of cash payments and costs incurred. |
(e) | Lease costs associated with drilling operations are capitalized as additions to oil and gas properties. |
Operating Leases | |||
(in millions) | |||
Remainder of 2019 | $ | 122 | |
2020 | 127 | ||
2021 | 69 | ||
2022 | 36 | ||
2023 | 9 | ||
Thereafter | 26 | ||
Total minimum lease payments | 389 | ||
Less: Amount associated with discounting | (27 | ) | |
Total | $ | 362 |
Three Months Ended March 31, 2019 | |||
(in millions) | |||
Pressure pumping services | $ | 147 |
As of March 31, 2019 | As of December 31, 2018 | ||||||
(in millions) | |||||||
Accounts receivable - due from affiliate (a) | $ | 7 | $ | 119 | |||
Accounts payable - due to affiliate (b) | $ | 104 | $ | 37 |
(a) | Includes employee-related charges to be reimbursed by ProPetro and $110 million of short-term receivables as of December 31, 2018 that were collected during the three months ended March 31, 2019. |
(b) | Prior to the Company's sale of its pressure pumping assets to ProPetro, the Company utilized the services of ProPetro in the normal course of business. The balance as of December 31, 2018 represents invoices associated with those services that were in the process of being paid. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Oil sales | $ | 917 | $ | 1,013 | |||
NGL sales | 138 | 165 | |||||
Gas sales | 80 | 88 | |||||
Total oil and gas sales | 1,135 | 1,266 | |||||
Sales of purchased oil | 1,107 | 1,051 | |||||
Sales of purchased gas | 2 | 19 | |||||
Total sales of purchased oil and gas | 1,109 | 1,070 | |||||
Total revenue derived from contracts with purchasers | $ | 2,244 | $ | 2,336 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Investment in affiliate fair value adjustment (Note 4) | $ | 174 | $ | — | |||
Interest income | 8 | 7 | |||||
Deferred compensation plan income | 7 | 4 | |||||
Other income | 2 | 4 | |||||
Seismic data sales | — | 3 | |||||
$ | 191 | $ | 18 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Transportation commitment charges (a) | $ | 40 | $ | 34 | |||
Asset impairment (b) (Note 4) | 32 | — | |||||
Restructuring charges (Note 3) | 13 | — | |||||
Accelerated depreciation (c) | 23 | — | |||||
Vertical integration services loss, net (d) | 20 | 6 | |||||
Other | 10 | 13 | |||||
Legal and environmental charges | 5 | 4 | |||||
Idle drilling and well service equipment charges (e) | 4 | — | |||||
$ | 147 | $ | 57 |
(a) | Primarily represents firm transportation payments on excess pipeline capacity commitments. |
(b) | Represents inventory and other property and equipment impairment charges of $16 million related to the decommissioning of the Company's Brady, Texas sand mine and $15 million of impairment charges related to inventory and other property and equipment excluded from the Company's sale of its pumping services assets in December 2018. |
(c) | Represents accelerated depreciation related to the decommissioning of the Company's Brady, Texas sand mine. |
(d) | For the three months ended March 31, 2019, amount includes $9 million of decommissioning operating expenses related to the Company's Brady sand mine and $15 million of carryover and winding down operating expenses related to the Company's sale of its pumping services assets in December 2018, partially offset by net margins (attributable to third party working interest owners) that result from Company-provided well service operations, which are ancillary to and supportive of the Company's oil and gas joint operating activities, and do not represent intercompany transactions. For the three months ended March 31, 2019, these vertical integration net margins included $35 million of revenues and $55 million of costs and expenses. For the same period in 2018, these vertical integration net margins included $34 million of revenues and $40 million of costs and expenses. |
(e) | Primarily represents expenses attributable to idle frac fleet and drilling rig fees that are not chargeable to joint operations. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Deferred tax provision | $ | 103 | $ | 50 | |||
Effective tax rate | 23 | % | 22 | % |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Net income attributable to common stockholders | $ | 350 | $ | 178 | |||
Participating share-based earnings | (2 | ) | (1 | ) | |||
Basic and diluted net income attributable to common stockholders | $ | 348 | $ | 177 |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
(in millions) | |||||
Basic weighted average shares outstanding | 169 | 170 | |||
Dilution attributable to stock-based compensation awards | — | 1 | |||
Diluted weighted average shares outstanding | 169 | 171 |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Net income attributable to common stockholders for the three months ended March 31, 2019 was $350 million ($2.06 per diluted share), as compared to net income of $178 million ($1.04 per diluted share) for the same period in 2018. The primary components of the increase in net income attributable to common stockholders include: |
• | a $195 million decrease in derivative net losses, primarily as a result of changes in forward commodity prices and the cash settlement of derivative positions in accordance with their terms; |
• | a $173 million increase in interest and other income, primarily due to a $174 million noncash fair value adjustment gain attributable to the 16.6 million shares of ProPetro Holding Corp. ("ProPetro") common stock owned by the Company; |
• | a $136 million increase in net sales of purchased oil and gas, primarily due to favorable downstream oil margins on the Company's Gulf Coast refinery and export sales; and |
• | a $15 million decrease in exploration and abandonment expense, primarily due to reductions in geological and geophysical costs and abandoned well costs; |
• | a $131 million decrease in oil and gas revenues primarily due to a 16 percent decrease in average realized commodity prices per BOE, partially offset by a seven percent increase in daily sales volumes; |
• | a $90 million increase in other expense, primarily due to inventory and other property and other equipment impairment charges of $32 million associated with the Company's decommissioning of the Brady, Texas sand mine and pumping services asset sale, accelerated depreciation of $23 million related to the decommissioning of the Company's Brady, Texas sand mine and corporate restructuring-related charges of $13 million to align the organization with the needs of a Permian Basin-focused company; |
• | a $64 million increase in DD&A expense, primarily due to declines in commodity prices, which led to reductions in proved reserves as a result of shortening the economic productive lives of the Company's producing wells; and |
• | a $53 million increase in the Company's income tax provision as a result of the improvements in earnings during the three months ended March 31, 2019, as compared to the same period in 2018. |
• | During the three months ended March 31, 2019, average daily sales volumes increased by seven percent to 333,430 BOEPD, as compared to 311,845 BOEPD during the same period in 2018, primarily due to the Company's successful Spraberry/Wolfcamp horizontal drilling program, which more than offset the loss of production associated with the Company's 2018 divestitures. |
• | Average oil, NGL and gas prices decreased per Bbl (for oil and NGL) and Mcf (for gas) during the three months ended March 31, 2019 to $49.38, $22.79 and $2.50, respectively, as compared to $61.64, $27.74 and $2.59, respectively, for the same period in 2018. |
• | Net cash provided by operating activities increased by nine percent to $604 million for the three months ended March 31, 2019, as compared to $555 million for the same period in 2018, primarily due to an increase of (i) $136 million in net sales of purchased oil and gas, primarily due to favorable downstream oil margins on the Company's Gulf Coast refinery and export sales and (ii) $76 million of incremental cash available from commodity derivative activity, partially offset by decreases in the Company's oil and gas revenues in 2019 as a result of decreases in commodity prices. |
• | As of March 31, 2019 and December 31, 2018, the Company's net debt to book capitalization was 10 percent and seven percent, respectively. |
Three Months Ending June 30, 2019 | |
Guidance | |
($ in millions, except per BOE amounts) | |
Permian Basin Specific Guidance: | |
Average daily production (MBOE) | 313 - 328 |
Average daily oil production (MBbl) | 198 - 208 |
Production costs per BOE | $8.50 - $10.50 |
DD&A per BOE | $13.00 - $15.00 |
Total Company Guidance: | |
Exploration and abandonments expense | $20 - $30 |
General and administrative expense | $93 - $98 |
Accretion of discount on asset retirement obligations | $3 - $6 |
Interest expense | $28 - $33 |
Other expense | $25 - $35 |
Cash flow uplift from firm transportation | $50 - $110 |
Current income tax provision | < $5 |
Effective tax rate | 21% - 25% |
Three Months Ended March 31, 2019 | |||||
Permian Basin | Total Company | ||||
Oil (Bbls) | 202,538 | 206,256 | |||
NGL (Bbls) | 63,277 | 67,070 | |||
Gas (Mcf) | 322,986 | 360,620 | |||
Total (BOE) | 319,646 | 333,430 |
Three Months Ended March 31, 2019 | |||||||
Permian Basin | Total Company | ||||||
(in millions) | |||||||
Unproved property acquisitions costs | $ | 11 | $ | 11 | |||
Exploration costs | 659 | 663 | |||||
Development costs | 238 | 239 | |||||
Total | $ | 908 | $ | 913 |
Three Months Ended March 31, 2019 | |||||
Permian Basin | Total Company | ||||
Beginning wells in progress | 16 | 16 | |||
Wells spud | 9 | 9 | |||
Successful wells | (9 | ) | (9 | ) | |
Ending wells in progress | 16 | 16 |
Three Months Ended March 31, 2019 | |||||
Permian Basin | Total Company | ||||
Beginning wells in progress | 163 | 166 | |||
Wells spud | 92 | 92 | |||
Successful wells | (64 | ) | (64 | ) | |
Ending wells in progress | 191 | 194 |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Oil (Bbls) | 206,256 | 182,519 | |||
NGL (Bbls) | 67,070 | 66,181 | |||
Gas (Mcf) | 360,620 | 378,869 | |||
Total (BOEs) | 333,430 | 311,845 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Oil per Bbl | $ | 49.38 | $ | 61.64 | |||
NGL per Bbl | $ | 22.79 | $ | 27.74 | |||
Gas per Mcf | $ | 2.50 | $ | 2.59 | |||
Total per BOE | $ | 37.84 | $ | 45.11 |
Three Months Ended March 31, 2019 | ||||||||
Net cash receipts (payments) | Price impact | |||||||
(in millions) | ||||||||
Oil derivative receipts | $ | 12 | $ | 0.68 | per Bbl | |||
Gas derivative payments | (8 | ) | $ | (0.26 | ) | per Mcf | ||
Total net commodity derivative receipts | $ | 4 |
Three Months Ended March 31, 2018 | ||||||||
Net cash receipts (payments) | Price impact | |||||||
(in millions) | ||||||||
Oil derivative payments | $ | (74 | ) | $ | (4.49 | ) | per Bbl | |
NGL derivative receipts | — | $ | 0.08 | per Bbl | ||||
Gas derivative receipts | 2 | $ | 0.05 | per Mcf | ||||
Total net commodity derivative payments | $ | (72 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Lease operating expenses | $ | 5.12 | $ | 4.41 | |||
Gathering, processing and transportation charges | 2.33 | 2.47 | |||||
Net natural gas plant income | (0.96 | ) | (0.10 | ) | |||
Workover costs | 0.87 | 0.82 | |||||
$ | 7.36 | $ | 7.60 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Production taxes | $ | 1.70 | $ | 2.01 | |||
Ad valorem taxes | 0.56 | 0.69 | |||||
$ | 2.26 | $ | 2.70 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in millions) | |||||||
Geological and geophysical | $ | 20 | $ | 28 | |||
Exploratory well costs | — | 4 | |||||
Leasehold abandonments and other | — | 3 | |||||
$ | 20 | $ | 35 |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
• | Swaps. The Company receives a fixed price and pays a floating market price to the counterparty on a notional amount of sales volumes, thereby fixing the price for the commodity sold. |
• | Collars. Collar contracts provide minimum ("floor" or "long put") and maximum ("ceiling") prices on a notional amount of sales volumes, thereby allowing some price participation if the relevant index price closes above the floor price but below the ceiling price. |
• | Collar contracts with short put options. Collar contracts with short put options differ from other collar contracts by virtue of the short put option price, below which the Company's realized price will exceed the variable market prices by the long put-to-short put price differential. |
• | Basis swaps. Basis swap contracts fix the basis differentials between the index price at which the Company sells its production and the index price used in swap or collar contracts. |
• | Options. Selling individual call options can enhance the market price by the premium received or, alternatively, the premium received can be utilized to improve swap or collar contract prices. Purchased put options establish a minimum floor price (less any premiums paid) and allow participation in higher prices when prices close above the floor price. |
2019 | |||||||||||
Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Average forward Brent oil price per Bbl | $ | 67.24 | $ | 66.52 | $ | 65.96 | |||||
Average forward NYMEX gas price per MMBtu | $ | 2.69 | $ | 2.79 | $ | 2.90 | |||||
Permian Basin gas index swap contracts: | |||||||||||
Average forward basis differential price per MMBtu (a) | $ | (2.37 | ) | $ | (1.68 | ) | $ | — | |||
Southern California gas index swap contracts: | |||||||||||
Average forward basis differential price per MMBtu (b) | $ | 1.65 | $ | 1.80 | $ | 0.87 |
2019 | |||||||||||
Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Average forward Brent oil price per Bbl | $ | 70.81 | $ | 69.16 | $ | 67.92 | |||||
Average forward NYMEX gas price per MMBtu | $ | 2.52 | $ | 2.57 | $ | 2.72 | |||||
Permian Basin gas index swap contracts: | |||||||||||
Average forward basis differential price per MMBtu (a) | $ | (2.32 | ) | $ | (1.73 | ) | $ | — | |||
Southern California gas index swap contracts: | |||||||||||
Average forward basis differential price per MMBtu (b) | $ | 1.85 | $ | 2.12 | $ | 0.78 |
(a) | Based on market quotes for basis differentials between Permian Basin index prices and the NYMEX Henry Hub index prices. The Company currently has no Permian Basin index swap contracts covering the fourth quarter of 2019. |
(b) | Based on market quotes for basis differentials between Permian Basin index prices and southern California index prices. |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Three Months Ended March 31, 2019 | ||||||||||||||
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | Approximate Dollar Amount of Shares that May Yet Be Purchased under Plans or Programs (b) | ||||||||||
January 2019 | 1,374,057 | $ | 139.32 | 1,335,176 | $ | 1,686,232,673 | ||||||||
February 2019 | 219,849 | $ | 139.72 | 101,357 | $ | 1,672,358,339 | ||||||||
March 2019 | 143 | $ | 139.29 | — | $ | 1,672,358,339 | ||||||||
1,594,049 | 1,436,533 |
(a) | Includes shares purchased from employees in order for employees to satisfy income tax withholding payments related to share-based awards that vested during the period. |
(b) | In December 2018, the Company's board of directors authorized a $2 billion common stock repurchase program. |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | |
10.1 (a) | ||
10.2 (a) | ||
10.3 (a) | ||
10.4 (a) | ||
31.1 (a) | ||
31.2 (a) | ||
32.1 (a) | ||
32.2 (a) | ||
95.1 (a) | ||
101.INS (a) | XBRL Instance Document. | |
101.SCH (a) | XBRL Taxonomy Extension Schema. | |
101.CAL (a) | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF (a) | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB (a) | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE (a) | XBRL Taxonomy Extension Presentation Linkbase Document. |
(a) | Filed herewith. |
(b) | Furnished herewith. |
PIONEER NATURAL RESOURCES COMPANY | ||||
May 9, 2019 | By: | /s/ Richard P. Dealy | ||
Richard P. Dealy | ||||
Executive Vice President and Chief Financial Officer | ||||
May 9, 2019 | By: | /s/ Margaret M. Montemayor | ||
Margaret M. Montemayor | ||||
Vice President and Chief Accounting Officer |
1. | Section 3.1(a) of the Plan is replaced in its entirety with the following: |
2. | Section 4.2(a) of the Plan is replaced in its entirety with the following: |
4. | Section 4.2(e) of the Plan shall be replaced in its entirety with the following: |
By: | /s/ Teresa A. Fairbanks |
Teresa A. Fairbanks | |
Vice President and Chief Human Resources Officer |
By: | /s/ Mark H. Kleinman |
Name: | Mark H. Kleinman |
Title: | Executive Vice President and General Counsel |
Name: | Mark H. Kleinman |
Title: | Senior Vice President and General Counsel |
Name: | Mark H. Kleinman |
Title: | Senior Vice President and General Counsel |
By: | /s/ Mark H. Kleinman |
Name: | Mark H. Kleinman |
Title: | Senior Vice President and General Counsel |
By: | /s/ Mark H. Kleinman |
Name: | Mark H. Kleinman |
Title: | Senior Vice President and General Counsel |
_________________________________________ Date signed: | __________________________________________________________ Signature of [employee] |
_________________________________________ Date signed: | __________________________________________________________ Witness |
1. | I have reviewed this quarterly report on Form 10-Q of Pioneer Natural Resources Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Scott D. Sheffield | |
Scott D. Sheffield | |
President and Chief Executive Officer | |
Date: | May 9, 2019 |
1. | I have reviewed this quarterly report on Form 10-Q of Pioneer Natural Resources Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Richard P. Dealy | |
Richard P. Dealy | |
Executive Vice President and Chief Financial Officer | |
Date: | May 9, 2019 |
/s/ Scott D. Sheffield | |
Scott D. Sheffield | |
President and Chief Executive Officer | |
Date: | May 9, 2019 |
/s/ Richard P. Dealy | |
Richard P. Dealy | |
Executive Vice President and Chief Financial Officer | |
Date: | May 9, 2019 |
Mine/MSHA Identification Number(1) | Section 104 S&S Citations | Section 104(b) Orders | Section 104(d) Citations and Orders | Section 110(b)(2) Violations | Section 107(a) Orders | Total Dollar Value of Proposed Assessments | Mining Related Fatalities | Received Notice of Pattern of Violations under Section 104(e) (yes/no) | Received Notice of Potential to have Pattern under Section 104(e) (yes/no) | Legal Actions Pending as of Last Day of Period | Legal Actions Initiated During Period | Legal Actions Resolved During Period | |||||||||||||||||||||||
Voca Pit and Plant / 4101003 | — | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||||||||||||||
Millwood Operation / 3301355 | — | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||||||||||||||
Brady Plant / 4101371 | — | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||||||||||||||
Voca West / 4103618 | — | — | — | — | — | $ | — | — | No | No | — | — | — |
(1 | ) | The definition of mine under section three of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools and minerals preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine. MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities such as preparation facilities. |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 06, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PXD | |
Entity Registrant Name | PIONEER NATURAL RESOURCES CO | |
Entity Central Index Key | 0001038357 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 168,423,736 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 174,828,478 | 174,321,171 |
Treasury stock, shares | 6,406,441 | 4,822,069 |
Consolidated Statements Of Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share (usd per share) | $ 0.32 | $ 0.16 |
Organization and Nature of Operations |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Pioneer Natural Resources Company ("Pioneer" or the "Company") is a Delaware corporation whose common stock is listed and traded on the New York Stock Exchange. The Company is a large independent oil and gas exploration and production company that explores for, develops and produces oil, natural gas liquids ("NGL") and gas within the United States, with operations primarily in the Permian Basin in West Texas. |
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Presentation. In the opinion of management, the unaudited interim consolidated financial statements of the Company as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 include all adjustments and accruals, consisting only of normal, recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods in conformity with generally accepted accounting principles in the United States ("GAAP"). The operating results for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These unaudited interim consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. Use of estimates in the preparation of financial statements. Preparation of the Company's unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Depletion of oil and gas properties and impairment of goodwill and proved and unproved oil and gas properties, in part, is determined using estimates of proved, probable and possible oil and gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks. Actual results could differ from the estimates and assumptions utilized. Adoption of new accounting standards. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASC 842") which supersedes the lease recognition requirements in Accounting Standards Codification ("ASC") 840, "Leases" ("ASC 840"), and requires lessees to recognize lease assets and lease liabilities for those leases previously classified as operating leases. The Company adopted ASC 842 as of January 1, 2019 using the modified retrospective transition method. The Company elected to apply the transition guidance under ASU 2018-11, "Leases (Topic 842) Targeted Improvements," in which ASC 842 is applied at the adoption date, while the comparative periods continue to be reported in accordance with historic accounting under ASC 840. This standard does not apply to leases to explore for or use minerals, oil or gas resources, including the right to explore for those natural resources and rights to use the land in which those natural resources are contained. ASC 842 allowed for the election of certain practical expedients at adoption to ease the burden of implementation. At implementation, the Company elected to (i) maintain the historical lease classification for leases prior to January 1, 2019, (ii) maintain the historical accounting treatment for land easements that existed at adoption, (iii) use historical practices in assessing the lease term of existing contracts at adoption, (iv) combine lease and non-lease components of a contract as a single lease and (v) not record short-term leases on the consolidated balance sheet, all in accordance with ASC 842. As of March 31, 2019, the Company's operating lease assets and liabilities totaled $356 million and $362 million, respectively, on the consolidated balance sheet, in accordance with ASC 842. The adoption of ASC 842 did not have a material impact on the consolidated statements of operations and had no impact on cash flows. The Company did not record a change to its opening retained earnings as of January 1, 2019, as there was no material change to the timing or pattern of recognition of lease costs due to the adoption of ASC 842. As of December 31, 2018, the Company was the deemed owner of the Company's new corporate headquarters (for accounting purposes) during the construction period and was following the build-to-suit accounting guidance under ASC 840. On January 1, 2019, upon the adoption of ASC 842, the Company derecognized $217 million of other property and equipment and $219 million of build-to-suit lease liability costs associated with the building as this contract no longer qualifies for capitalization. The contract will be evaluated and recorded on the Company's consolidated balance sheets upon lease commencement, which is expected to occur during the second half of 2019. See Note 10 for additional information. New accounting pronouncements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (ASU 2016-13). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Entities will use the modified retrospective approach to apply the standard's provisions and record a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company continues to evaluate ASU 2016-13 but does not expect that it will have a material impact on its consolidated financial statements. |
Divestiture, Decommissioning and Restructuring Activities |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestiture, Decommissioning and Restructuring Activities | Divestiture, Decommissioning and Restructuring Activities The Company's significant divestiture, decommissioning and restructuring activities during the three months ended March 31, 2019 and 2018 are as follows:
The Company's restructuring activities, including employee-related charges, contract termination charges and other costs are recorded as other expense in the statements of operations and as other noncash operating activities in the consolidated statements of cash flows. Obligations associated with employee-related charges are classified as accounts payable - due to affiliates in the consolidated balance sheets. Obligations associated with contract termination charges are classified as other current or noncurrent liabilities in the consolidated balance sheets. The Company's restructuring activity during the three months ended March 31, 2019 is as follows (in millions):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company determines fair value based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three input levels of the fair value hierarchy are as follows:
Assets and liabilities measured at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows:
Commodity derivatives. The Company's commodity derivatives represent oil, NGL and gas swap contracts, collar contracts, collar contracts with short puts and basis swap contracts. The asset and liability measurements for the Company's commodity derivative contracts represent Level 2 inputs in the hierarchy. The Company utilizes discounted cash flow and option-pricing models for valuing its commodity derivatives. The asset and liability values attributable to the Company's commodity derivatives were determined based on inputs that include (i) the contracted notional volumes, (ii) independent active market price quotes, (iii) the applicable estimated credit-adjusted risk-free rate yield curve and (iv) the implied rate of volatility inherent in the collar contracts and collar contracts with short puts, which is based on active and independent market-quoted volatility factors. Deferred compensation plan assets. The Company's deferred compensation plan assets represent investments in equity and mutual fund securities that are actively traded on major exchanges. These investments are measured based on observable prices on major exchanges. As of March 31, 2019 and December 31, 2018, the significant inputs to these asset exchange values represented Level 1 independent active exchange market price inputs. Investment in affiliate. The Company elected the fair value option for measuring its equity method investment in ProPetro. The fair value of its investment in ProPetro is determined using Level 2 inputs, including the quoted market price for the stock as adjusted to reflect a value discount due to the shares not being able to be sold until mid-2019. See Note 12 and Note 14 for additional information. Assets and liabilities measured at fair value on a nonrecurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. These assets and liabilities can include inventory, proved and unproved oil and gas properties and other long-lived assets that are written down to fair value when they are impaired or held for sale. During the three months ended March 31, 2019, the Company impaired the remaining $16 million of inventory and other property and equipment related to the decommissioning of the Company's Brady, Texas sand mine, as these assets had no remaining future economic value. In addition, the Company recognized a $15 million impairment charge related to pressure pumping assets excluded from the December 2018 sale of the Company's pumping services assets. See Note 15 for additional information. Financial instruments not carried at fair value. Carrying values and fair values of financial instruments that are not carried at fair value in the consolidated balance sheets are as follows:
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The Company has other financial instruments consisting primarily of receivables, payables, operating leases and other current assets and liabilities that approximate fair value due to the nature of the instrument and their relatively short maturities. Non-financial assets and liabilities initially measured at fair value include assets acquired and liabilities assumed in a business combination, goodwill and asset retirement obligations. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company utilizes commodity swap contracts, option contracts, collar contracts, collar contracts with short puts and basis swap contracts to (i) reduce the effect of price volatility on the commodities the Company produces and sells or consumes, (ii) support the Company's annual capital budgeting and expenditure plans and (iii) reduce commodity price risk associated with certain capital projects. The Company also, from time to time, utilizes interest rate contracts to reduce the effect of interest rate volatility on the Company's indebtedness. Oil production derivatives. The Company sells its oil production at the lease and the sales contracts governing such oil production are tied directly to, or are highly correlated with, New York Mercantile Exchange ("NYMEX") West Texas Intermediate ("WTI") oil prices. The Company also enters into pipeline capacity commitments in order to secure available oil transportation capacity from its areas of production to the Gulf Coast. In order to diversify the oil price it receives, the Company (i) enters into oil purchase transactions with third parties in its areas of production that are consistent with the oil prices that the Company receives at the lease, adjusted for transportation costs to the point of purchase, (ii) transports the purchased oil using its pipeline capacity to the Gulf Coast and (iii) enters into third party sale transactions to sell the oil into the Gulf Coast refinery or international export markets at prices that are highly correlated with Brent oil prices. As a result, the Company will generally use Brent derivative contracts to manage future oil price volatility. Volumes per day associated with the Company's outstanding oil derivative contracts as of March 31, 2019 and the weighted average oil prices for those contracts are as follows:
NGL production derivatives. All material physical sales contracts governing the Company's NGL production are tied directly or indirectly to Mont Belvieu, Texas NGL component product prices. The Company uses derivative contracts to manage the NGL component product price volatility. As of March 31, 2019, the Company did not have any NGL derivative contracts outstanding. Gas production derivatives. All material physical sales contracts governing the Company's gas production are tied directly or indirectly to NYMEX Henry Hub ("HH") gas prices or regional index prices where the gas is sold. The Company uses derivative contracts to manage gas price volatility and basis swap contracts to reduce basis risk between HH prices and actual index prices at which the gas is sold. Volumes per day associated with outstanding gas derivative contracts as of March 31, 2019 and the weighted average gas prices for those contracts are as follows:
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The Company's derivatives are accounted for as non-hedge derivatives and therefore all changes in the fair values of its derivative contracts are recognized as gains or losses in the earnings of the periods in which they occur. The Company enters into derivatives under master netting arrangements, which, in an event of default, allows the Company to offset payables to and receivables from the defaulting counterparty. Fair value. The fair value of derivative financial instruments not designated as hedging instruments is as follows:
Gains and losses recorded on derivative contracts are as follows:
The Company uses credit and other financial criteria to evaluate the credit standing of, and to select, counterparties to its derivative instruments. Although the Company does not obtain collateral or otherwise secure the fair value of its derivative instruments, associated credit risk is mitigated by the Company's credit risk policies and procedures. |
Exploratory Costs |
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Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exploratory Costs | Exploratory Costs The Company capitalizes exploratory well and project costs until a determination is made that the well or project has either found proved reserves, is impaired or is sold. The Company's capitalized exploratory well and project costs are presented in proved properties in the consolidated balance sheets. If the exploratory well or project is determined to be impaired, the impaired costs are charged to exploration and abandonments expense. Capitalized exploratory well and project activity is as follows:
Aging of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year, based on the date drilling was completed, are as follows:
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Long-term Debt |
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Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Credit facility. The Company's long-term debt consists of senior notes, a revolving corporate credit facility (the "Credit Facility") and the effects of issuance costs and discounts. The Credit Facility is maintained with a syndicate of financial institutions and has aggregate loan commitments of $1.5 billion. The Credit Facility has a maturity date of October 2023. As of March 31, 2019, the Company had no outstanding borrowings under the Credit Facility and was in compliance with its debt covenants. Senior notes. The Company's 7.50% senior notes with a debt principal balance of $450 million will mature in January 2020 and are classified as current in the consolidated balance sheet as of March 31, 2019. |
Incentive Plans |
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Compensation Related Costs [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plans | Incentive Plans Stock-based compensation. For the three months ended March 31, 2019, the Company recorded $29 million of stock-based compensation expense for all plans, as compared to $23 million for the same period in 2018. Stock-based compensation expense for the three months ended March 31, 2019 included $3 million of remaining expense associated with the unvested restricted stock awards and performance units granted to the Company's former CEO, who retired during the period, in accordance with the terms of his award agreements. In addition, the Company accounted for the modification of award agreements with certain other officers that were notified during the three months ended March 31, 2019 of the Company's planned changes to its leadership and organizational structure to align its cost structure with the needs of a Permian Basin-focused company. These other officer modifications provided for the full vesting of all outstanding awards upon each such officers' early retirement and departure from the Company. The modification associated with the full vesting of outstanding awards resulted in a modified fair value that is in excess of what would have vested in accordance with the terms of the original award agreements. The stock-based compensation expense associated with the modified awards will be recognized over the remaining service period of those officers, which is generally expected to be less than 90 days. As of March 31, 2019, there was $146 million of unrecognized stock-based compensation expense related to unvested share-based compensation plans, including $29 million attributable to stock-based awards that are expected to be settled on their vesting date in cash, rather than in equity shares ("Liability Awards"). The unrecognized compensation expense will be recognized on a straight-line basis over the remaining vesting periods of the awards, which is a period of less than three years on a weighted average basis. As of March 31, 2019 and December 31, 2018, accounts payable – due to affiliates included $3 million and $14 million, respectively, of liabilities attributable to Liability Awards. Activity for outstanding restricted stock awards and performance units is as follows:
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Asset Retirement Obligations |
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Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations activity is as follows:
The Company records the current and noncurrent portions of asset retirement obligations in other current liabilities and other liabilities, respectively, in the consolidated balance sheets. As of March 31, 2019 and December 31, 2018, the current portions of the Company's asset retirement obligations were $31 million and $25 million, respectively. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company leases drilling rigs, storage tanks, equipment and office facilities under operating leases and recognizes lease expense on a straight-line basis over the lease term. Operating lease right-of-use assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term. As most of the Company's lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Certain leases contain variable costs above the minimum required payments and are not included in the right-of-use assets or liabilities. Leases may include renewal, purchase or termination options that can extend or shorten the term of the lease. The exercise of those options is at the Company’s sole discretion and is evaluated at inception and throughout the contract to determine if a modification of the lease term is required. Leases with an initial term of 12 months or less are not recorded on the balance sheet. In June 2017, the Company entered into a 20-year operating lease for the Company's new corporate headquarters that is currently being constructed in Irving, Texas. Annual base rent is expected to be $33 million and lease payments are expected to commence once the building is complete. The Company has a variable equity interest in the entity that is constructing the building. The Company is not the primary beneficiary of the variable interest entity and only has a profit sharing interest after certain economic returns are achieved. The Company has no exposure to the variable interest entity's losses or future liabilities, if any. The contract for the Company's new corporate headquarters will be evaluated under ASC 842 upon lease commencement, which is expected to occur during the second half of 2019. Lease costs, including amounts recoverable from joint operating partners, are as follows:
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The payment schedule for the Company's operating lease obligations as of March 31, 2019 is as follows:
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal actions. The Company is a party to various proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on the Company's consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company records reserves for contingencies when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated. Obligations following divestitures. In connection with its divestiture transactions, the Company may retain certain liabilities and provide the purchaser certain indemnifications, subject to defined limitations, which may apply to identified pre-closing matters, including matters of litigation, environmental contingencies, royalty and income taxes. The Company does not believe it is probable that these obligations will have a material impact on its liquidity, financial position or future results of operations. Also associated with its divestiture transactions, the Company has issued and received guarantees to facilitate the transfer of contractual obligations, such as firm transportation agreements or gathering and processing arrangements. The Company believes the likelihood of making or receiving payments under these guarantees is remote. As of March 31, 2019, the maximum amount of payments the Company could be required to make under the guarantees is $128 million, which could be partially offset by credit support from third parties of $69 million. Firm purchase, gathering, processing, transportation and fractionation commitments. From time to time, the Company enters into, and as of March 31, 2019 was a party to, take-or-pay agreements, which include contractual commitments (i) to purchase and process sand and purchase water for use in the Company's drilling operations, (ii) with midstream service companies and pipeline carriers for future gathering, processing, transportation, storage and fractionation services and (iii) with oilfield services companies that provide pressure pumping services. These commitments are normal and customary for the Company's business activities. |
Related Party Transactions |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions In December 2018, the Company completed the sale of its pressure pumping assets to ProPetro in exchange for 16.6 million shares of ProPetro common stock and $110 million of short-term receivables that were collected during the three months ended March 31, 2019. ProPetro is considered a related party since the shares received represent approximately 16 percent of ProPetro's outstanding common stock. In addition to the sale of equipment and related facilities, the Company entered into a long-term agreement with ProPetro for it to provide pressure pumping and related services. The costs of these services are capitalized in oil and gas properties as incurred. See Note 3 and Note 14 for additional information. Transactions and balances with ProPetro are as follows:
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Disaggregated revenue from contracts with purchasers. Revenues on sales of oil, NGL, gas and purchased oil and gas are recognized when control of the product is transferred to the purchaser and payment can be reasonably assured. Sales prices for oil, NGL and gas production are negotiated based on factors normally considered in the industry, such as an index or spot price, distance from the well to the pipeline or market, commodity quality and prevailing supply and demand conditions. As such, the prices of oil, NGL and gas generally fluctuate based on the relevant market index rates. Disaggregated revenue from contracts with purchasers by product type is as follows:
Oil sales. Sales under the Company's oil contracts are generally considered performed when the Company sells oil production at the wellhead and receives an agreed-upon index price, net of any price differentials. The Company recognizes revenue when control transfers to the purchaser at the wellhead based on the net price received. NGL and gas sales. The Company evaluated whether it is the principal or the agent in gas processing transactions and concluded that it is the principal when it has the ability to take-in-kind, which is the case in the majority of the Company's gas processing and transportation contracts. Therefore the Company recognizes revenue on a gross basis, with the gathering, processing, transportation and fractionation costs associated with its take-in-kind arrangements being recorded as oil and gas production costs in the consolidated statement of operations. Sales of purchased oil and gas. The Company enters into pipeline capacity commitments in order to secure available oil, NGL and gas transportation capacity from the Company's areas of production. The Company enters into purchase transactions with third parties and separate sale transactions with third parties to (i) diversify a portion of the Company's WTI oil sales to the Gulf Coast refinery or international export markets and (ii) satisfy unused pipeline capacity commitments. Revenues and expenses from these transactions are presented on a gross basis as the Company acts as a principal in the transaction by assuming control of the commodities purchased and the responsibility to deliver the commodities sold. Revenue is recognized when control transfers to the purchaser at the delivery point based on the price received from the purchaser. The transportation costs associated with these transactions are presented as a component of purchased oil and gas expense. Firm transportation payments on excess pipeline capacity are included in other expense in the consolidated statements of operations. Performance obligations and contract balances. The majority of the Company's product sale commitments are short-term in nature with a contract term of one year or less. The Company typically satisfies its performance obligations upon transfer of control as described above in Disaggregated revenue from contracts with purchasers and records the related revenue in the month production is delivered to the purchaser. Settlement statements for sales of oil, NGL and gas and sales of purchased oil and gas may not be received for 30 to 60 days after the date the volumes are delivered, and as a result, the Company is required to estimate the amount of volumes delivered to the purchaser and the price that will be received for the sale of the product. The Company records the differences between estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Historically, differences between the Company's revenue estimates and actual revenue received have not been significant. As of March 31, 2019 and December 31, 2018, the accounts receivable balance representing amounts due or billable under the terms of contracts with purchasers was $825 million and $646 million, respectively. |
Interest and Other Income |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Other Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Other Income | Interest and Other Income The components of interest and other income are as follows:
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Other Expense |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense | Other Expense The components of other expense are as follows:
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Income Taxes |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income tax provision and effective tax rate are as follows:
Uncertain tax positions. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based upon the technical merits of the position. As of March 31, 2019 and December 31, 2018, the Company had unrecognized tax benefits ("UTBs") of $141 million for each respective period resulting from research and experimental expenditures related to horizontal drilling and completion innovations. If all or a portion of the UTBs is sustained upon examination by the taxing authorities, the tax benefit will be recorded as a reduction to the Company's deferred tax liability and will affect the Company's effective tax rate in the period it is recorded. The timing as to when the Company will substantially resolve the uncertainties associated with the UTBs is uncertain. The Company files income tax returns in the U.S. federal and various state and foreign jurisdictions. The Internal Revenue Service has closed examinations of the 2011 and prior tax years and, with few exceptions, the Company believes that it is no longer subject to examinations by state and foreign tax authorities for years before 2012. As of March 31, 2019, no adjustments had been proposed in any jurisdiction that would have a significant effect on the Company's liquidity, future results of operations or financial position. |
Net Income Per Share |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per Share The components of basic and diluted net income per share attributable to common stockholders are as follows:
Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows:
Stock repurchase program. In December 2018, the Company's board of directors authorized a $2 billion common stock repurchase program. Under this stock repurchase program, the Company may repurchase shares at management's discretion in accordance with applicable securities laws. In addition, the Company may repurchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Act of 1934, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company's insider trading policy. The stock repurchase program has no time limit, may be modified, suspended or terminated at any time by the board of directors and replaced and terminated the Company's prior $100 million common stock repurchase program announced in February 2018. During the three months ended March 31, 2019 and 2018, the Company repurchased $200 million and $17 million, respectively, of common stock under these repurchase programs. As of March 31, 2019, $1.7 billion remains available for use to repurchase shares under the Company's common stock repurchase program. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In May 2019, the Company completed the sale of its Eagle Ford assets and other remaining assets in South Texas to an unaffiliated third party. The sale of these assets is expected to result in a pretax loss of $400 million to $550 million during the second quarter of 2019. The Company expects to recognize a liability associated with the sale for estimated deficiency fees retained by the Company on unused minimum volume commitments. Additionally, under the agreement, the Company expects to receive up to $475 million in total proceeds, of which $25 million was received at closing and $450 million is contingent on future commodity prices. The contingent proceeds will be valued based on the probability-weighted estimate of proceeds that will be received over the earn-out period using forecasted commodity prices. The contingent proceeds will be determined annually over the 2020 through 2024-time periods based on actual commodity prices for each year. The contingent proceeds, if any, will be received between 2023 and 2025. In May 2019, the Company announced its plans to divest of its ownership interest in certain gas gathering and processing assets operated by a third party. The Company expects this divestiture process to be completed before the end of 2019, although no assurance can be given that this divestiture will be completed in accordance with the Company's plans or on terms and at a price that is acceptable to the Company. In April 2019, the Company adopted a voluntary separation program (“VSP”) for certain eligible employees. Eligible employees who voluntarily choose to participate in the program will receive certain severance and related benefits above the Company's customary involuntary termination benefits. The Company plans to further reduce its headcount levels during the second quarter of 2019 with an involuntary separation program. Based on initial estimates, the Company expects to recognize between $140 million and $180 million of severance and related benefit costs associated with the voluntary and involuntary programs during the second quarter of 2019, of which approximately 25 percent is expected to be noncash charges related to the accelerated vesting of certain equity awards. |
Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Presentation | Presentation. In the opinion of management, the unaudited interim consolidated financial statements of the Company as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 include all adjustments and accruals, consisting only of normal, recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods in conformity with generally accepted accounting principles in the United States ("GAAP"). The operating results for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These unaudited interim consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. |
Adoption of new accounting standards | Adoption of new accounting standards. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASC 842") which supersedes the lease recognition requirements in Accounting Standards Codification ("ASC") 840, "Leases" ("ASC 840"), and requires lessees to recognize lease assets and lease liabilities for those leases previously classified as operating leases. The Company adopted ASC 842 as of January 1, 2019 using the modified retrospective transition method. The Company elected to apply the transition guidance under ASU 2018-11, "Leases (Topic 842) Targeted Improvements," in which ASC 842 is applied at the adoption date, while the comparative periods continue to be reported in accordance with historic accounting under ASC 840. This standard does not apply to leases to explore for or use minerals, oil or gas resources, including the right to explore for those natural resources and rights to use the land in which those natural resources are contained. ASC 842 allowed for the election of certain practical expedients at adoption to ease the burden of implementation. At implementation, the Company elected to (i) maintain the historical lease classification for leases prior to January 1, 2019, (ii) maintain the historical accounting treatment for land easements that existed at adoption, (iii) use historical practices in assessing the lease term of existing contracts at adoption, (iv) combine lease and non-lease components of a contract as a single lease and (v) not record short-term leases on the consolidated balance sheet, all in accordance with ASC 842. As of March 31, 2019, the Company's operating lease assets and liabilities totaled $356 million and $362 million, respectively, on the consolidated balance sheet, in accordance with ASC 842. The adoption of ASC 842 did not have a material impact on the consolidated statements of operations and had no impact on cash flows. The Company did not record a change to its opening retained earnings as of January 1, 2019, as there was no material change to the timing or pattern of recognition of lease costs due to the adoption of ASC 842. As of December 31, 2018, the Company was the deemed owner of the Company's new corporate headquarters (for accounting purposes) during the construction period and was following the build-to-suit accounting guidance under ASC 840. On January 1, 2019, upon the adoption of ASC 842, the Company derecognized $217 million of other property and equipment and $219 million of build-to-suit lease liability costs associated with the building as this contract no longer qualifies for capitalization. The contract will be evaluated and recorded on the Company's consolidated balance sheets upon lease commencement, which is expected to occur during the second half of 2019. |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are as follows:
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Schedule of carrying values and financial instruments not carried at fair value | Carrying values and fair values of financial instruments that are not carried at fair value in the consolidated balance sheets are as follows:
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of oil derivative contracts volume and weighted average price | Volumes per day associated with the Company's outstanding oil derivative contracts as of March 31, 2019 and the weighted average oil prices for those contracts are as follows:
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Schedule of gas derivative volume and weighted average prices | Volumes per day associated with outstanding gas derivative contracts as of March 31, 2019 and the weighted average gas prices for those contracts are as follows:
____________________
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Offsetting asset and liability | The fair value of derivative financial instruments not designated as hedging instruments is as follows:
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Schedule of derivative gains and losses recognized on statement of operations | Gains and losses recorded on derivative contracts are as follows:
|
Exploratory Costs (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized exploratory well and project activity | Capitalized exploratory well and project activity is as follows:
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Capitalized exploratory costs and the number of projects for which exploratory costs have been capitalized | Aging of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year, based on the date drilling was completed, are as follows:
|
Incentive Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Related Costs [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share based incentive award activity | Activity for outstanding restricted stock awards and performance units is as follows:
|
Asset Retirement Obligations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of asset retirement obligations | Asset retirement obligations activity is as follows:
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease costs | Lease costs, including amounts recoverable from joint operating partners, are as follows:
____________________
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Payment schedule for operating lease obligations | The payment schedule for the Company's operating lease obligations as of March 31, 2019 is as follows:
|
Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions and balances | Transactions and balances with ProPetro are as follows:
____________________
|
Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | Disaggregated revenue from contracts with purchasers by product type is as follows:
|
Interest and Other Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Other Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of interest and other income | The components of interest and other income are as follows:
|
Other Expense (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other expense | The components of other expense are as follows:
____________________
|
Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (provisions) benefits attributable to income from continuing operations | Income tax provision and effective tax rate are as follows:
|
Net Income Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of earnings attributable to common stockholders, basic and diluted | The components of basic and diluted net income per share attributable to common stockholders are as follows:
|
Organization and Nature of Operations (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from disposition of assets, net of cash sold | $ 6 | $ 4 |
Basis of Presentation Policies (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | $ 356 | $ 0 |
Operating lease liability | 362 | |
Build-to-suit lease liability | 389 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | 356 | |
Operating lease liability | $ 362 | |
Capitalized construction costs | 217 | |
Build-to-suit lease liability | $ 219 |
Divestiture, Decommissioning and Restructuring Activities (Schedule of Restructuring and Employee Related Costs) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||
Divestiture related liabilities | $ 128 | |
Firm Transportation Contracts [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Divestiture related liabilities | $ 90 | |
Divestiture related liabilities, current | 30 | |
Restructuring Reserve, Year Two | 43 | |
Restructuring Reserve, Year Three | 17 | |
Employee severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Divestiture related liabilities | 26 | 27 |
Restructuring Charges | 13 | |
Payments for Restructuring | (10) | |
Noncash changes (Note 8) | (4) | |
Contract Termination [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Divestiture related liabilities | 102 | $ 111 |
Payments for Restructuring | $ (9) |
Fair Value Measurements (Narrative) (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Sand mine | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impairment of inventory and other property and other equipment | $ 16 |
Pressure pumping assets | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impairment of inventory and other property and other equipment | $ 15 |
Derivative Financial Instruments (Schedule Of Derivative Instruments) (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivative [Line Items] | ||
Net Fair Value Presented in the Consolidated Balance Sheet, Asset Derivatives - current | $ 30 | $ 52 |
Net Fair Value Presented in the Consolidated Balance Sheet, Liabilities Derivatives - current | 22 | 27 |
Derivatives not designated as hedging instruments | Commodity price derivatives | Derivatives - current | ||
Derivative [Line Items] | ||
Asset Derivatives, Fair Value | 36 | 59 |
Gross Amounts Offset in the Consolidated Balance Sheet, Assets Derivatives | (6) | (7) |
Net Fair Value Presented in the Consolidated Balance Sheet, Asset Derivatives - current | 30 | 52 |
Liability Derivatives, Fair Value | 28 | 34 |
Gross Amounts Offset in the Consolidated Balance Sheet. Liabilities Derivatives | (6) | (7) |
Net Fair Value Presented in the Consolidated Balance Sheet, Liabilities Derivatives - current | $ 22 | $ 27 |
Derivative Financial Instruments (Schedule Of Derivative Obligations Under Terminated Hedge Arrangements) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Derivative [Line Items] | ||
Document Fiscal Year Focus | 2019 | |
Derivative gains (losses), net | $ 13 | $ 208 |
Derivative loss, net | Commodity price derivatives | ||
Derivative [Line Items] | ||
Derivative gains (losses), net | $ 13 | $ 208 |
Exploratory Costs (Schedule Of Capitalized Exploratory Well And Project Activity) (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Increase (Decrease) in Capitalized Exploratory Well Costs that are Pending Determination of Proved Reserves [Roll Forward] | |
Beginning capitalized exploratory well costs | $ 509 |
Additions to exploratory well costs pending the determination of proved reserves | 647 |
Reclassification due to determination of proved reserves | (406) |
Ending capitalized exploratory well costs | $ 750 |
Exploratory Costs (Capitalized Exploratory Costs And the Number Of Projects For Which Exploratory Costs Have Been Capitalized) (Details) $ in Millions |
Mar. 31, 2019
USD ($)
Well
|
Dec. 31, 2018
USD ($)
Well
|
---|---|---|
Capitalized exploratory well costs that have been suspended: | ||
One year or less | $ 750 | $ 509 |
More than one year | 0 | 0 |
Total | $ 750 | $ 509 |
Number of wells or projects with exploratory well costs that have been suspended for a period greater than one year | Well | 0 | 0 |
Long-term Debt (Details) - USD ($) |
Mar. 31, 2019 |
May 01, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Aggregate loan commitments | $ 1,500,000,000.0 | |
Outstanding borrowing | 0 | |
Seven Point Five Zero Zero Percentage Senior Notes Due Two Thousand And Twenty [Member] | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.50% | |
Debt Instrument, Maturity Date | $ 450,000,000 |
Incentive Plans Incentive Plans (Stock-based compensation) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 29 | $ 23 | |
Unrecognized stock-based compensation expense | $ 146 | ||
Remaining vesting period | 3 years | ||
Restricted Stock Liability Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized stock-based compensation expense | $ 29 | ||
Restricted Stock Liability Awards | Affiliates | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Due to affiliates | 3 | $ 14 | |
Chief Executive Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3 |
Asset Retirement Obligations (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Beginning asset retirement obligations | $ 183 | $ 271 | |
New wells placed on production | 0 | 1 | |
Changes in estimates | 0 | 2 | |
Obligations reclassified to liabilities held for sale | 0 | 6 | |
Liabilities settled | (6) | (9) | |
Accretion of discount | 3 | 4 | |
Ending asset retirement obligations | 180 | $ 263 | |
Asset retirement obligations, current portions | $ 31 | $ 25 |
Leases (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Jun. 30, 2017 |
|
Leases [Abstract] | ||
Operating lease term | 20 years | |
Annual base rent | $ 33 |
Leases - Lease Costs (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Lease cost: | |
Operating lease cost | $ 45 |
Short-term lease cost | 6 |
Variable lease cost | 19 |
Total lease cost | 70 |
Operating cash flows from operating leases | 21 |
Investing cash flows from operating leases | 49 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 88 |
Weighted-average remaining lease term - operating leases | 3 years 4 months 24 days |
Weighted-average discount rate - operating leases | 3.30% |
Leases - Payment schedule for operating lease obligations (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2019 | $ 122 |
2020 | 127 |
2021 | 69 |
2022 | 36 |
2023 | 9 |
Thereafter | 26 |
Total minimum lease payments | 389 |
Less: Amount associated with discounting | (27) |
Total | $ 362 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Jun. 30, 2017 |
|
Loss Contingencies [Line Items] | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 128 | |
Guarantor Obligations, Credit Support from Third Parties | 69 | |
Operating lease term | 20 years | |
Annual base rent | $ 33 |
Related Party Transactions (Details) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 3 Months Ended |
---|---|---|
Dec. 31, 2018 |
Mar. 31, 2019 |
|
Related Party Transaction [Line Items] | ||
Pressure pumping services | $ 147 | |
Accounts receivable - due from affiliate | $ 119 | 7 |
Accounts payable - due to affiliate | $ 37 | $ 104 |
ProPetro | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 16.00% | |
Pressure pumping assets | ProPetro | Pressure pumping assets | ||
Related Party Transaction [Line Items] | ||
Shares received | 16.6 | |
Short-term receivables | $ 282 | $ 110 |
Revenue Recognition (Schedule of Adoption of ASC 606) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 2,244 | $ 2,336 |
Oil and gas | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 1,135 | 1,266 |
Costs and expenses | $ 221 | $ 213 |
Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable balance representing amounts due or billable | $ 825 | $ 646 |
Interest and Other Income (Components Of Interest And Other Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Interest and Other Income [Abstract] | ||
Document Fiscal Year Focus | 2019 | |
Investment in affiliate fair value adjustment | $ 174 | $ 0 |
Interest income | 8 | 7 |
Deferred compensation plan income | 7 | 4 |
Other income | 2 | 4 |
Seismic data sales | 0 | 3 |
Total interest and other income | $ 191 | $ 18 |
Other Expense (Schedule Of Components Of Other Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||
Transportation commitment charges | $ 40 | $ 34 |
Asset Impairment Charges | 32 | 0 |
Restructuring charges (Note 3) | 13 | 0 |
Accelerated depreciation | 23 | 0 |
Loss from vertical integration services | 20 | 6 |
Other | 10 | 13 |
Legal and environmental charges | 5 | 4 |
Idle drilling and well service equipment expense | 4 | 0 |
Total other expense | 147 | 57 |
Vertical integration net margins, revenue | 35 | 34 |
Vertical integration net margins, costs and expenses | 55 | $ 40 |
Sand mine | ||
Restructuring Cost and Reserve [Line Items] | ||
Accelerated depreciation | 23 | |
Loss from vertical integration services | 9 | |
Impairment of inventory and other property and other equipment | 16 | |
Pressure pumping assets | ||
Restructuring Cost and Reserve [Line Items] | ||
Loss from vertical integration services | 15 | |
Impairment of inventory and other property and other equipment | $ 15 |
Income Taxes (Income tax (provisions) benefits attributable to income from continuing operations) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Deferred income taxes | $ 103 | $ 50 |
Income tax provision | $ 103 | $ 50 |
Effective Income Tax Rate Reconciliation, Percent | 23.00% | 22.00% |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 23.00% | 22.00% |
Unrecognized Tax Benefits | $ 141 |
Net Income Per Share (Reconciliation Of Earnings Attributable To Common Stockholders, Basic And Diluted) (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019 |
Sep. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net income attributable to common stockholders | $ 350 | $ 178 | ||
Participating share-based earnings | $ (2) | $ (1) | ||
Basic net income attributable to common stockholders | $ 348 | $ 177 | ||
Diluted net income attributable to common stockholders | $ 348 | $ 177 |
Net Income Per Share NeNet Income Per Share (Schedule of Weighted Average Number of Shares) (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Earnings Per Share [Abstract] | ||
Basic weighted average shares outstanding | 169 | 170 |
Dilution attributable to stock-based compensation awards | 0 | 1 |
Diluted weighted average shares outstanding | 169 | 171 |
Net Income Per Share (Narrative) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
Dec. 13, 2018 |
Feb. 28, 2018 |
|
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock purchased | $ 222,000,000 | $ 45,000,000 | |||
Terminated Stock Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Terminated Stock Repurchase Program - Authorized Amount | $ 100,000,000 | ||||
Common stock purchased | $ 17,000,000 | ||||
Common stock repurchase program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount | $ 2,000,000,000 | ||||
Remaining authorized amount | 1,700,000,000 | ||||
Common stock purchased | $ 200,000,000 |
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