Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced financial and operating results for the quarter ended September 30, 2012.
Pioneer reported third quarter net income attributable to common stockholders of $19 million, or $0.15 per diluted share (see attached schedule for a description of the net income per diluted share calculation). Without the effect of noncash derivative mark-to-market losses and other unusual items, adjusted income for the third quarter was $104 million after tax, or $0.82 per share.
Third quarter and other recent highlights included:
- producing 159.9 thousand barrels oil equivalent per day (MBOEPD), which is above the top end of the Company’s third-quarter guidance range of 155 MBOEPD to 159 MBOEPD (these third quarter production volumes include 6.9 MBOEPD from Pioneer’s Barnett Shale properties since production from these properties was included in Pioneer’s third quarter guidance range; the Barnett Shale properties were reclassified to discontinued operations during the third quarter as a result of the Company’s decision to divest of these properties),
- producing 153.0 MBOEPD from continuing operations (excludes Barnett Shale and South Africa production, which is reflected in discontinued operations), an increase from the second quarter of 2012 of 10 MBOEPD, or 7%, and 33 MBOEPD, or 28%, from the third quarter of 2011 as a result of continued strong production growth in the Company’s Spraberry vertical, horizontal Wolfcamp Shale and Eagle Ford Shale areas,
- continuing to deliver strong well performance from deeper vertical drilling to the Strawn, Atoka and Mississippian intervals,
- achieving record production levels in the Eagle Ford Shale as a result of continued strong well performance,
- narrowing Pioneer’s 2012 production growth guidance range from 25% to 29% to 27% to 28% based on year-to-date results,
- continuing to drill successful horizontal Wolfcamp Shale wells, with well performance in the Company’s southern 200,000 acres of the play meeting type curve expectations,
- beginning to drill delineation wells in the Company’s northern acreage of the horizontal Wolfcamp Shale play,
- progressing data room activities to pursue a joint venture partner to accelerate development of the horizontal Wolfcamp Shale play in the southern 200,000 acres of Pioneer’s total prospective acreage position,
- increasing the 2012 drilling budget by $100 million primarily to accelerate horizontal Wolfcamp Shale appraisal activity,
- drilling two successful Jo Mill interval horizontal wells in the Spraberry field,
- opening a data room to progress the planned divestiture of the Company’s Barnett Shale properties, which will allow the reallocation of capital to the higher-return Spraberry vertical, horizontal Wolfcamp Shale and Eagle Ford Shale areas,
- adding oil derivative positions for 2013 through 2015 and gas derivative positions for 2014 through 2015,
- expecting the Company to exercise its right to call the convertible senior notes due 2038 for redemption early in 2013 (based on the September 30 th closing stock price of $104.40, conversion of the notes would result in paying $480 million cash and issuing approximately 3.3 million shares) and
- recognizing that the Company’s oil production will increase by 3,500 barrels oil per day (BOPD) at the end of 2012 with the expiration of the final Spraberry volumetric production payment (VPP) commitment.
Scott Sheffield, Chairman and CEO, stated, “Our Spraberry vertical and Eagle Ford Shale plays continued to exceed production growth expectations in the third quarter. Our drilling results from the horizontal Wolfcamp Shale play are also continuing to meet expectations, and we expect this asset to significantly contribute to our production growth going forward. Our joint venture data room for the southern 200,000 acres of the play has been very active, and the data room for the Barnett Shale divestiture has just opened. We were also able to begin drilling horizontal wells on our northern acreage earlier than anticipated to appraise the potential of the horizontal Wolfcamp Shale in this area.”