|View printer-friendly version|
Pioneer Reports Fourth Quarter and Annual 2001 Results
Dallas, Texas, February 5, 2022 -- Pioneer Natural Resources Company (“Pioneer”)(NYSE:PXD) (TSE:PXD) today announced financial and operating results for the quarter and year ended December 31, 2001.
Fourth Quarter Results
Pioneer reported a net loss of $20.9 million, or $0.21 per diluted share, for the fourth quarter of 2001. Fourth quarter results included a $7.7 million charge associated with the economic instability and resulting devaluation of the Argentine peso, a $6 million bad debt charge related to derivative contracts with Enron North America Corp. and a $1 million loss on the sale of assets, primarily in Canada. The Company also recognized an extraordinary loss of $5.1 million on the early extinguishment of $38.7 million of its 9-5/8% senior notes. Adjusted for the above items, the Company reported a loss of $1.1 million, or $0.01 per diluted share, as compared to analysts' consensus estimate of a loss of $0.03 per share, according to First Call/Thompson Financial. For the same period in 2000, Pioneer reported net income of $84.2 million, or $0.85 per diluted share. Cash flow from operations for the fourth quarter of 2001 was $85.6 million compared to $145 million for the fourth quarter of 2000.
On an oil equivalent basis, fourth quarter sales averaged 110,407 barrels per day (BPD). Fourth quarter oil sales averaged 34,446 BPD and natural gas liquid sales averaged 21,333 BPD. Natural gas sales in the fourth quarter averaged 328 million cubic feet per day (MMcfpd). Realized prices for oil and natural gas liquids for the fourth quarter averaged $21.69 and $11.99 per barrel, respectively. The realized price for natural gas averaged $2.66 per thousand cubic feet (Mcf), with North American natural gas prices averaging $3.00 per Mcf.
Fourth quarter production costs averaged $4.94 per barrel oil equivalent (BOE). Exploration and abandonment costs of $33.8 million for the quarter included $15.6 million of geologic and geophysical expenses including seismic costs, $13.5 million of exploration costs and $4.7 million of non-cash leasehold abandonments including expired leases.
For the same quarter in 2000, Pioneer reported oil sales of 34,522 BPD, natural gas liquid sales of 21,827 BPD and natural gas sales of 352 MMcfpd. Realized prices for the 2000 fourth quarter averaged $25.48 per barrel for oil, $23.13 per barrel for natural gas liquids and $3.85 per Mcf for natural gas.
2001 Annual Results
For the twelve months ended December 31, 2001, Pioneer reported net income of $100 million, or $1.00 per diluted share. Results for 2001 included a $7.7 million charge associated with the economic instability and resulting devaluation of the Argentine peso, a $6 million bad debt charge related to derivative contracts with Enron North America Corp. and a $7.7 million gain on the sale of assets, primarily from the sale of stock in a non-affiliated company. The Company also recognized an extraordinary loss of $3.8 million on the early extinguishment of public debt. Adjusted for the above items, the Company reported income of $109.8 million, or $1.10 per diluted share. For 2000, Pioneer reported net income of $152.2 million, or $1.53 per diluted share. Cash flow from operations for 2001 was $475.6 million compared to $430.1 million in 2000.
During 2001, oil sales averaged 34,241 BPD and natural gas liquids sales averaged 21,370 BPD. Natural gas sales averaged 350 MMcfpd. On an oil equivalent basis, sales averaged 113,997 BPD. Realized prices for oil and natural gas liquids averaged $24.12 and $17.14 per barrel, respectively. Realized price in 2001 for natural gas was $3.23 per Mcf, with North American natural gas prices averaging $3.86 per Mcf.
In 2000, Pioneer reported oil sales of 34,249 BPD, natural gas liquid sales of 22,894 BPD and natural gas sales of 371 MMcfpd. Realized prices for 2000 were $24.01 per barrel for oil, $20.27 per barrel for natural gas liquids and $2.81 per Mcf for natural gas.
Pioneer repurchased 830,400 shares of its common stock during 2001 at an average price of $15.69 per share. The Company's ratio of debt to total book capitalization was reduced to 55% at December 31, 2001, down from 64% at 2000 year end. Debt per BOE of proved reserves was $2.35 at year end 2001, down from $2.51 at the end of 2000.
Scott D. Sheffield, Chairman and CEO stated, “We are proud of the strong financial and operating results we have posted for 2001. Excluding revisions due to price changes, our three-year finding and development cost averaged $4.74 per BOE. We drilled 390 wells in 2001 with 85% success including significant discoveries at Falcon, Stirrup, Oneida and Ozona Deep in the Gulf of Mexico and in Gabon and South Africa. We plan to develop or appraise each of these discoveries in 2002. We made significant development progress in moving our “Big 4” discoveries toward first production over the next 14 months. Canyon Express is progressing toward first production in July, and Sable, Devils Tower and Falcon are on track for early 2003 startup. As these projects reach their potential, we expect our daily production rate to increase 55% to 60% from current levels. We plan to continue our production growth into 2004 and beyond as we appraise our 2001 discoveries and test new prospects in 2002. Clearly, we are pleased with the results of the exploration and development strategy we launched in forming Pioneer, and are excited to be nearing the point that the results of our efforts take the form of increased production and cash flow.”
Current operations are focused on development of Pioneer's Big 4 discoveries. In the deepwater Gulf of Mexico, activities are at peak levels on the Canyon Express project where production is expected to begin in July. The jacket, temporary deck and shallow water pipeline have been installed and installation of the deepwater flow line and umbilicals is underway. The first of six wells is being completed.
At Devils Tower where first production is expected in early 2003, the deck and spar hull are being fabricated and the fourth of seven wells has been completed. Development results have exceeded expectations, and Pioneer has acquired and is planning to drill an additional prospect in the area during the first half of 2002.
At Falcon, which is also in the deepwater Gulf of Mexico, the umbilicals and flow lines are being fabricated and first production is targeted for early 2003. Pioneer has acquired an interest in 12 additional blocks in the area and plans to drill a prospect near Falcon later this year.
In South Africa, development of the Sable oil field is well underway. Development drilling is progressing as expected and the floating production, storage and offloading facilities are currently being upgraded. Pioneer has acquired and is processing a new 3-D seismic survey to refine prospects in the immediate area and could drill at least one of these prospects this year.
During the first half of 2002, Pioneer plans to drill its second prospect in Gabon, the Awena Marin #1. The well will target the southern section of the oil rim on the offshore Olowi Block where Pioneer drilled a discovery well in 2001. Pioneer also plans to drill two other wells on the block including at least one appraisal well on the previous discovery. The Company also plans to appraise the 2001 discovery at Ozona Deep in the deepwater Gulf of Mexico. A sister prospect to the Stirrup discovery, the Gallup prospect, is also planned for the first half of 2002.
Winter-access drilling in Canada is in full swing with 11 of 19 planned wells drilled and cased in the Chinchaga area. Pioneer is also adding significant compression capacity to accommodate production from the new drilling and to handle the better-than-expected production rates from wells drilled last year.
Pioneer has limited its development drilling activity in the onshore U.S. as a result of depressed gas prices and has postponed all drilling in Argentina. As a result, the Company's capital budget for 2002 has been reduced to approximately $375 million.
The following statements are estimates based on current expectations. These forward-looking statements are subject to a number of risks and uncertainties which may cause the Company's actual results to differ materially from the following statements. The last paragraph of this release addresses certain of the risks and uncertainties to which the Company is subject.
First quarter 2002 daily production is expected to average 108,000 to 110,000 BOE. First quarter lease operating expenses (including production and ad valorem taxes) are expected to average $4.60 to $4.90 per BOE based on recent NYMEX strip prices for oil and natural gas. Depreciation, depletion and amortization expense is expected to average $5.15 to $5.30 per BOE. Total exploration and abandonment expense is expected to range from $15 million to $30 million. General and administrative expense is expected to be approximately $11 million to $12 million. Interest expense is expected to range from $30 million to $32 million. Cash taxes are expected to range from $1 million to $2 million, as the Company benefits from the carryforward of prior years' net operating losses in the U.S. and Canada. For the first quarter of 2002, cost incurred is expected to range from $90 million to $100 million.
Pioneer continues to monitor the political and economic environment in Argentina where 17% of the Company's year-end reserves were held. The Company's production forecasts have been adjusted downward to reflect the postponement of drilling in the country. In addition, the devaluation of the Argentine peso is expected to result in a near-term reduction in revenues, partially offset by a reduction in operating and administrative costs, the net impact of which cannot currently be estimated by the Company. For the fourth quarter of 2001, Argentina represented 15% or $18.9 million of Pioneer's operating cash flow.
The Company has oil and natural gas hedges that will impact future period realizations. During 2002, Pioneer has approximately 60% of its expected North American natural gas hedged at NYMEX equivalent prices of $4 and above. The Company has hedges covering approximately 45% of expected crude oil production at NYMEX equivalent prices over $23 per barrel. These hedges are more fully summarized in the attached schedules.
Earnings Conference Call
On Tuesday, February 5, 2002, at 10:00 a.m. Eastern, investors will have the opportunity to listen to the fourth quarter earnings call and view a presentation over the Internet via Pioneer's website located at http://www.pioneernrc.com. At the website, select the “Investors” button at the top of the page; then select “Earnings Calls” from the list across the bottom of the page. To listen to the live call, please go to the website at least ten minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available on the website shortly after the call. Alternately, you may dial (800) 946-0786 (confirmation code: 702484) to listen to the conference call and view the accompanying visual presentation at the Internet address above. A telephone replay will be available through February 18th by dialing (888) 203-1112--confirmation code: 702484.
Pioneer is a large independent oil and gas exploration and production company with operations in the United States, Canada, Argentina, South Africa, Gabon and Tunisia. Pioneer's headquarters are in Dallas. For more information, visit Pioneer's website at www.pioneernrc.com.
Financial statements attached.
Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward- looking statements and the business prospects of Pioneer Natural Resources Company are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, government regulation or action, foreign currency valuation changes, foreign government tax and regulation changes, litigation, the costs and results of drilling and operations, Pioneer's ability to replace reserves, implement its business plans, or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, and environmental risks. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.
Investor Relations Contact: Susan Spratlen (972) 444-9001
Important Legal Information ©2002 Pioneer Natural Resources Company
Data Provided by Refinitiv. Minimum 15 minutes delayed.