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Pioneer Reports Second Quarter 2000 Results, Increases Production, Reduces Debt
Dallas, Texas, July 25, 2022 -- Pioneer Natural Resources Company (“Pioneer”)(NYSE:PXD) (TSE:PXD) today announced financial and operating results for the second quarter of 2000.
Second Quarter 2000 Results
Pioneer reported a second quarter 2000 net loss of $16.1 million or $0.16 per share, but exceeded analysts' consensus estimates for earnings, which routinely exclude non-recurring and certain non-cash charges. As expected, reported results were negatively impacted by several non-cash charges: a $12.3 million extraordinary loss on early extinguishment of debt (related to the establishment of a new bank facility), a $4.8 million loss on the disposition of assets (primarily the sale of an office building in Midland, Texas) and a $28.5 million mark-to-market charge (related to derivatives not treated as hedges). Earnings as adjusted for the above items were $29.5 million or $0.30 per share. The analysts' consensus earnings estimate was $0.27 per share, according to First Call/Thompson Financial which tracks earnings data. For the same period last year, Pioneer reported a net loss of $74.6 million or $0.74 per share.
Cash flow from operations for the second quarter of 2000 was $122.2 million compared to $89.1 million for the second quarter of 1999. Strong cash flow allowed the Company to reduce long-term debt by $43 million to $1.7 billion while growing daily production for the quarter. Pioneer has also repurchased 1.1 million shares through July 15, 2022 at an average price of $9.97 per share.
Pioneer's return to a growth mode was evidenced by an increase in daily production for the first time since the sale of non-strategic assets a year ago. On an oil equivalent basis, second quarter sales averaged 120,505 barrels per day (BPD) up 3% from 117,294 BPD in the first quarter. Second quarter oil sales averaged 33,404 BPD and natural gas liquid sales averaged 23,520 BPD. Natural gas sales in the second quarter averaged 381 million cubic feet per day (MMCFPD). Realized prices for oil and natural gas liquids for the second quarter were $22.59 and $18.37 per barrel, respectively. The realized price for natural gas was $2.60 per thousand cubic feet (MCF).
Second quarter production costs averaged $3.93 per barrel oil equivalent (BOE), a $0.10 per BOE decrease compared to the first quarter. The decrease resulted from a $0.22 per BOE reduction in workover costs and a $0.13 per BOE increase in lease operating expenses, primarily the result of higher field fuel costs. Exploration and abandonment costs of $27.7 million for the quarter included $10.4 million of geologic and geophysical expenses including seismic costs, $9.9 million of non-cash leasehold abandonments including expired leases, and $7.4 million of exploration costs.
For the same quarter last year, Pioneer reported oil sales of 47,759 BPD, natural gas liquid sales of 26,184 BPD, and natural gas sales of 502 MMCFPD. Because of asset divestitures during 1999, the quarter-to-quarter volumes are not comparable. Realized prices for the 1999 second quarter were $14.90 per barrel for oil, $9.86 per barrel for natural gas liquids, and $1.88 per MCF for natural gas.
Six Month Results
For the six months ended June 30, 2000, Pioneer reported a net loss of $1.3 million, or $0.01 per share.
Excluding the $12.3 million extraordinary loss on early extinguishment of debt, a gain of $3.6 million on the disposition of assets and a $42.0 million mark-to-market charge related to derivatives not treated as hedges, profits as adjusted were $49.4 million or $0.49 per share. For the same period last year, Pioneer reported a net loss of $77.1 million, or $0.77 per share. Cash flow from operations for the six-month period was $169.4 million compared to $97.4 million for the same period in 1999.
Six-month oil sales averaged 34,082 BPD and natural gas liquids sales were 23,093 BPD. Natural gas sales were 370 MMCFPD. On an oil equivalent basis, sales averaged 118,900 BPD. Six-month realized price for oil increased from the prior year period to $22.51 per barrel. Realized price for natural gas liquids was $18.68 per barrel. Realized price for natural gas was $2.29 per MCF. For the first half of 1999, Pioneer reported oil sales of 49,076 BPD, natural gas liquids sales of 26,858 BPD and natural gas sales of 494 MMCFPD. Because of asset divestitures during 1999, six month volumes are not comparable. Realized prices for the 1999 six-month period were $13.32 per barrel for oil, $8.72 per barrel for natural gas liquids and $1.80 per MCF for natural gas.
Pioneer also announced that it has signed definitive agreements for the sale of three non-core natural gas fields for total proceeds of approximately $40 million. The properties are located in Louisiana, New Mexico and Oklahoma. Pioneer anticipates closing the sales in early August. Daily production from the fields to be sold is approximately 14 MMCF of natural gas and 360 barrels of liquids. Proceeds will be used to reduce long-term debt.
Pioneer also announced a new pool gas discovery on its Fiji prospect (Brazos A-7) in the Big Hum trend of offshore Texas. The well is flowing at a rate of 8 MMCFPD from a secondary objective at 12,300 feet. The deeper primary sand objectives were present, but were non-productive. The well is producing from existing Pioneer-operated facilities. Working interest partners are Pioneer (50% and operator), Dominion Exploration & Production, Inc. (33.33%), Challenger Minerals Inc. (9.17%) and Cheyenne International Corporation (7.50%).
In the deepwater Gulf of Mexico, a successful appraisal well was drilled in the Devil's Tower field that extended the field into an adjacent fault block and confirmed commercial quantities of hydrocarbons. A sidetrack well was also successful and further delineated the accumulation. The second appraisal well is scheduled to be drilled during the fourth quarter. Pioneer's working interest is approximately 15.83%.
One other prospect in the Gulf Coast Miocene play is currently drilling, and the Company plans to drill two additional prospects during the fourth quarter. Pioneer expects to spud an exploratory well on its extensive acreage position in South Africa within the next 60 days.
As a result of strong cash flow, Pioneer's 2000 capital expenditures budget was recently increased to $290 million. The Company is currently running 22 rigs, 18 in the United States and four in Argentina. Domestically, four rigs are drilling in the East Texas Bossier play with a fifth rig to be added in early August. There are seven rigs running in West Texas, two in the West Panhandle field, one in the Hugoton field, and one in South Texas. In Argentina there are four rigs running in the Neuquen Basin. Daily production from Argentina increased 16% over the first quarter as a result of drilling activities and stronger winter demand for natural gas in the Neuquen Basin. Canadian natural gas production increased 18% reflecting the impact of connecting production from Pioneer's winter drilling program in the Northeast British Columbia area.
Scott D. Sheffield, Chairman and CEO stated, “We are very pleased to be back in a position of growth in our daily production volumes, especially in these times of high commodity prices. Cash flow is much stronger than anticipated, allowing us to increase our budgeted capital expenditures while maintaining our goal to significantly reduce long-term debt in 2000.”
Earnings Conference Call
On Tuesday, July 25, 2000, at 10:30 a.m. EDT, investors will have the opportunity to listen to the second quarter's earnings conference call and view a slide 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 fifteen 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.
Pioneer is a large independent oil and gas exploration and production company with operations in the United States, Canada, Argentina and South Africa. Pioneer's headquarters are in Dallas.
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 which may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, government regulation or action, litigation, the costs and results of drilling and operations, the Company's ability to replace reserves or implement its business plans, 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 the Company's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.
Investor Relations Contact: Susan Spratlen (972) 444-9001
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