|View printer-friendly version|
Pioneer Reports Third Quarter 2001 Results
Dallas, Texas, October 23, 2021 -- Pioneer Natural Resources Company (“Pioneer”)(NYSE:PXD) (TSE:PXD) today announced financial and operating results for the third quarter of 2001.
Third Quarter Results
Pioneer reported net income of $24.6 million, or $0.25 per share on a diluted basis, for the third quarter of 2001. For the same period last year, Pioneer reported net income of $69.3 million, or $0.69 per share on a diluted basis. Cash flow from operations for the third quarter of 2001 was $122.9 million compared to $115.7 million for the third quarter of 2000. Long-term debt was reduced by $18 million during the third quarter to $1.55 billion, reducing Pioneer's long-term debt to book capitalization ratio to 57%.
On an oil equivalent basis, third quarter sales averaged 117,491 barrels per day (BPD). Third quarter oil sales averaged 32,920 BPD and natural gas liquid sales averaged 22,158 BPD. Natural gas sales in the third quarter averaged 374 million cubic feet per day (MMcfpd). Realized prices for oil and natural gas liquids for the third quarter averaged $25.06 and $15.01 per barrel, respectively. The realized price for natural gas averaged $2.66 per thousand cubic feet (Mcf), with North American natural gas prices averaging $3.16 per Mcf.
Third quarter production costs averaged $4.78 per barrel oil equivalent (BOE). Exploration and abandonment costs of $24.7 million for the quarter included $12.1 million of geologic and geophysical expenses including seismic costs, $11.4 million of exploration costs and $1.2 million of non-cash leasehold abandonments including expired leases.
For the same quarter last year, Pioneer reported oil sales of 34,307 BPD, natural gas liquid sales of 23,565 BPD and natural gas sales of 392 MMcfpd. Realized prices for the 2000 third quarter averaged $25.48 per barrel for oil, $20.73 per barrel for natural gas liquids and $2.87 per Mcf for natural gas.
Scott D. Sheffield, Chairman and CEO stated, “Since June 30th, we have made several announcements highlighting the actions we are taking to add to Pioneer's value. Today, we announced that we have approved the development of the Falcon discovery in the deepwater Gulf of Mexico. Falcon is the latest of four large projects we are now developing for first production in 2002 and 2003 which we believe have a combined potential to increase our 2003 production 45% to 50% from where we are today. To protect the attractive returns on these and other projects, we have a significant hedge position that was valued at $198 million as of September 30, 2001. We remain committed to investing in the right projects and protecting our returns.”
In July, Pioneer added two blocks covering 250,000 acres to its holdings in Argentina. In August, the Company was the apparent successful bidder on 21 blocks in the Gulf of Mexico lease sale, adding to its inventory of prospects in the deepwater and on the shelf. Last week, Pioneer announced that it is moving forward with its merger proposal to the limited partners of 46 Parker and Parsley limited partnerships seeking their approval for the previously announced merger at a meeting planned in December. Yesterday, Pioneer announced that it had acquired an additional interest in the Canyon Express project in the deepwater Gulf of Mexico and, simultaneously with this release, Pioneer announced that it has approved the development of the Falcon discovery in the deepwater Gulf of Mexico and expects first production in early 2003.
During the quarter, Pioneer took advantage of the recent decline in interest rates and monetized its interest rate swaps on its 8.25 % and 8.875 % senior notes for $21.2 million. Pioneer also monetized a portion of its 2003 natural gas hedges on 135 MMcf per day for $35.8 million. The natural gas was hedged at $3.99 per Mcf and was unwound at $3.14 per Mcf for an 85 cent profit per Mcf. As natural gas futures markets strengthened in October, the Company reestablished a portion of the 2003 position for natural gas. In early September, Pioneer added to its crude oil hedge position for 2001 and 2002. The Company also hedged the incremental natural gas volumes associated with the acquisition of additional interests in the Aconcagua field and the Canyon Express pipeline project for 2003 through 2005. Pioneer's hedge positions for oil and natural gas are summarized in the attached schedules.
Pioneer repurchased 408,200 shares of its common stock during the quarter at an average price of $14.60 per share, bringing its year-to-date repurchases to 830,400 shares at an average price of $15.69 per share. The Company also redeemed the remaining outstanding 11.625% and 10.625% MESA Inc. senior notes due July 1, 2022 for $31 million, recognizing a $1.4 million extraordinary gain.
Pioneer's preliminary estimate of 2002 capital expenditures is $400 million to $425 million. In order to direct approximately $200 million toward the development of its four largest projects, Canyon Express, Falcon, Devils Tower and Sable, which are expected to increase production 45% to 50%, the Company plans to delay some development drilling in the U.S., Argentina and Canada. Pioneer believes Falcon, which was approved last week, offers an exceptional return on investment and will require an estimated $70 million during 2002 in order to bring it on production as projected in early 2003. Based on this preliminary capital expenditures estimate, 2002 production is expected to increase approximately 12% above 2001 rates and range from 46 to 48 million BOE, and 2003 production is expected to increase approximately 31% above 2002 rates and range from 60 to 63 million BOE.
Nine Month Results
For the nine months ended September 30, 2001, Pioneer reported net income of $120.9 million, or $1.21 per share on a diluted basis. For the same period last year, Pioneer reported net income of $68.0 million, or $0.68 per share on a diluted basis. Cash flow from operations for the nine-month period was $390.0 million compared to $285.1 million for the same period in 2000.
Nine-month oil sales averaged 34,172 BPD and natural gas liquids sales averaged 21,383 BPD. Natural gas sales averaged 358 MMcfpd. On an oil equivalent basis, sales averaged 115,208 BPD. Nine-month realized price for oil increased from the prior year period to $24.95 per barrel, and realized price for natural gas liquids was $18.87 per barrel. Realized price for natural gas was $3.40 per Mcf, with North American natural gas prices averaging $4.15 per Mcf. For the first nine months of 2000, Pioneer reported oil sales of 34,157 BPD, natural gas liquid sales of 23,252 BPD and natural gas sales of 378 MMcfpd. Realized prices for the 2000 nine-month period averaged $23.52 per barrel for oil, $19.37 per barrel for natural gas liquids and $2.49 per Mcf for natural gas.
The following statements are forward looking estimates based on current expectations. Actual results may differ materially from these estimates since the estimates do not reflect the potential effect of acquisitions or divestitures that may be completed or other unforeseen events that may occur after the date of this release.
Fourth quarter production is expected to average 111 to 114 MBPD on an oil equivalent basis. Fourth quarter lease operating expenses (including production and ad valorem taxes) are expected to average $4.50 to $4.75 per BOE based on recent NYMEX strip prices for oil and natural gas. Depreciation, depletion and amortization expense is expected to average $5.50 to $5.75 per BOE. Total exploration and abandonment expense is expected to range from $20 million to $40 million. Two Gulf of Mexico exploration wells are currently drilling, Ozona Deep and Malta, and an appraisal well on the Stirrup discovery is also drilling. General and administrative expense is expected to be approximately $9 million. Interest expense is expected to range from $31 million to $32 million. Cash taxes are expected to range from $1 million to $3 million, as the Company benefits from the carryforward of prior years' net operating losses in the U.S. and Canada. For the fourth quarter of 2001, cost incurred is expected to range from $140 million to $150 million, excluding the Parker and Parsley partnership mergers, with the increase principally related to the acquisition of additional interests in the Aconcagua field and the Canyon Express pipeline project.
The Company has oil and natural gas hedges that will impact fourth quarter and future period realizations. These hedges are summarized in the attached schedules.
Earnings Conference Call
On Tuesday, October 23, 2001, at 11:00 a.m. EDT, investors will have the opportunity to listen to the third 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) 262-1292 (confirmation code: 746433) to listen to the conference call and view the accompanying visual presentation at the Internet address above. A telephone replay will be available through November 5th by dialing (888) 203-1112--confirmation code: 746433.
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.
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, 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 ©2001 Pioneer Natural Resources Company
Data Provided by Refinitiv. Minimum 15 minutes delayed.