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Pioneer Natural Resources Reports Second Quarter 2013 Financial And Operating Results

Stocks in this article: PXD

Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced financial and operating results for the quarter ended June 30, 2013.

Pioneer reported second quarter net income attributable to common stockholders of $337 million, or $2.40 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 gains and other unusual items, adjusted income for the second quarter was $154 million after tax, or $1.10 per diluted share.

Second quarter and other recent highlights included:

  • producing 176.2 thousand barrels oil equivalent per day (MBOEPD) in the second quarter, an increase from the first quarter of 2013 of 5 MBOEPD, or 3%, as a result of continued production growth from the Company’s drilling programs in the liquids-rich horizontal Spraberry/Wolfcamp and Eagle Ford Shale areas; production would have been 177.6 MBOEPD excluding the effects of unexpected ethane rejection of 1.4 MBOEPD in the Spraberry/Wolfcamp area;
  • narrowing the full-year 2013 production growth guidance range to 14% to 16% from 12% to 16%;
  • progressing the highly successful northern horizontal Spraberry/Wolfcamp drilling program by placing on production (i) Pioneer’s first Wolfcamp A interval well in Midland County with a peak 24-hour initial production rate of 1,712 barrels oil equivalent per day (BOEPD), a peak 30-day average production rate of 1,107 BOEPD and an oil content of 74% and (ii) Pioneer’s first Wolfcamp B interval well in Martin County with a peak 24-hour initial production rate of 1,572 BOEPD, a peak 30-day average production rate of 1,040 BOEPD and an oil content of 76%;
  • announcing that Pioneer’s first Wolfcamp B interval well in Midland County achieved cumulative production of 140 thousand barrels oil equivalent (MBOE) in six months;
  • increasing from one horizontal rig to five horizontal rigs in the northern Spraberry/Wolfcamp area during the second quarter, with three rigs currently drilling Wolfcamp B and D interval wells in Midland and Martin counties and two rigs currently drilling Jo Mill and Lower Spraberry interval wells in Midland and Martin counties; planning to move two of the five rigs during the third quarter to drill the Company’s first horizontal Wolfcamp and Spraberry Shale wells in Andrews County;
  • closing the southern Wolfcamp joint venture transaction with Sinochem Petroleum USA LLC, a U.S. subsidiary of the Sinochem Group (“Sinochem”) on May 31 (June 2013 production was lower by approximately 4,000 BOEPD, or approximately 1,300 BOEPD for the second quarter, reflecting Sinochem’s 40% share of production after closing);
  • placing 22 new Wolfcamp B interval wells in the southern Wolfcamp joint venture area on production during the second quarter with peak 24-hour initial production rates up to approximately 1,000 BOEPD; well results continue to meet expectations;
  • delivering development well costs ranging from $7.5 million to $8.0 million for 8,300-foot lateral wells in the southern Wolfcamp joint venture area; includes the benefits of lower slickwater fracture stimulation costs and declining hybrid fracture stimulation costs;
  • adding oil derivative positions for the 2014 through 2016 period that increased the Company’s oil production coverage levels to approximately 85% in 2014, 60% in 2015 and 15% in 2016; and
  • decreasing Pioneer’s net debt-to-book capitalization from 26% at the end of the first quarter to 22% at the end of the second quarter.

Scott Sheffield, Chairman and CEO, stated, “Pioneer delivered another solid quarter with strong earnings and production growth. The Company’s horizontal drilling programs continue to provide significant growth in our liquids-rich Spraberry/Wolfcamp Shale and Eagle Ford Shale plays. As a result, we are narrowing our 2013 production growth forecast to 14% to 16% from a range of 12% to 16%. The new production growth range also reflects that production during the second half of 2013 is expected to be negatively impacted by ongoing ethane rejection due to low ethane prices.”

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