Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | |||||||||||||||||||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Dec. 31, 2008 | |||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $55,615 | $48,337 | [1] | ||||||||||||||||
Accounts receivable: | |||||||||||||||||||
Trade, net of allowance for doubtful accounts of $1,437 and $22,464 as of September 30, 2009 and December 31, 2008, respectively | 136,893 | 206,794 | [1] | ||||||||||||||||
Due from affiliates | 624 | 759 | [1] | ||||||||||||||||
Income taxes receivable | 16,290 | 60,573 | [1] | ||||||||||||||||
Inventories | 145,976 | 76,901 | [1] | ||||||||||||||||
Prepaid expenses | 12,553 | 12,464 | [1] | ||||||||||||||||
Deferred income taxes | 3,417 | 6,510 | [1] | ||||||||||||||||
Other current assets: | |||||||||||||||||||
Derivatives | 41,280 | 59,622 | [1] | ||||||||||||||||
Other, net of allowance for doubtful accounts of $5,566 and $5,491 as of September 30, 2009 and December 31, 2008, respectively | 10,314 | 14,951 | [1] | ||||||||||||||||
Total current assets | 422,962 | 486,911 | [1] | ||||||||||||||||
Oil and gas properties, using the successful efforts method of accounting: | |||||||||||||||||||
Proved properties | 10,170,341 | 10,167,220 | [1] | ||||||||||||||||
Unproved properties | 212,818 | 204,183 | [1] | ||||||||||||||||
Accumulated depletion, depreciation and amortization | (2,819,643) | (2,511,401) | [1] | ||||||||||||||||
Total property, plant and equipment | 7,563,516 | 7,860,002 | [1] | ||||||||||||||||
Deferred income taxes | 2,572 | 553 | [1] | ||||||||||||||||
Goodwill | 309,371 | 310,563 | [1] | ||||||||||||||||
Other property and equipment, net | 154,956 | 161,266 | [1] | ||||||||||||||||
Other assets: | |||||||||||||||||||
Derivatives | 35,772 | 72,594 | [1] | ||||||||||||||||
Other, net of allowance for doubtful accounts of $7,172 and $4,410 as of September 30, 2009 and December 31, 2008, respectively | 191,919 | 269,896 | [1] | ||||||||||||||||
Assets, Total | 8,681,068 | 9,161,785 | [1] | ||||||||||||||||
Accounts payable: | |||||||||||||||||||
Trade | 201,768 | 322,688 | [1] | ||||||||||||||||
Due to affiliates | 18,562 | 34,284 | [1] | ||||||||||||||||
Interest payable | 28,481 | 43,247 | [1] | ||||||||||||||||
Income taxes payable | 12,745 | 3,618 | [1] | ||||||||||||||||
Deferred income taxes | 307 | 0 | [1] | ||||||||||||||||
Discontinued operations held for sale | 1,802 | 0 | [1] | ||||||||||||||||
Other current liabilities: | |||||||||||||||||||
Derivatives | 91,967 | 49,561 | [1] | ||||||||||||||||
Deferred revenue | 104,743 | 147,905 | [1] | ||||||||||||||||
Other | 57,445 | 93,694 | [1] | ||||||||||||||||
Total current liabilities | 517,820 | 694,997 | [1] | ||||||||||||||||
Long-term debt | 2,867,298 | 2,899,241 | [1] | ||||||||||||||||
Derivatives | 65,664 | 20,584 | [1] | ||||||||||||||||
Deferred income taxes | 1,408,481 | 1,501,459 | [1] | ||||||||||||||||
Deferred revenue | 109,497 | 177,236 | [1] | ||||||||||||||||
Other liabilities | 178,076 | 187,409 | [1] | ||||||||||||||||
Stockholders' equity: | |||||||||||||||||||
Common stock, $.01 par value; 500,000,000 shares authorized; 125,191,035 and 124,566,963 shares issued at September 30, 2009 and December 31, 2008, respectively | 1,252 | 1,246 | [1] | ||||||||||||||||
Additional paid-in capital | 2,935,897 | 2,909,735 | [1] | ||||||||||||||||
Treasury stock, at cost: 10,863,513 and 10,020,502 shares at September 30, 2009 and December 31, 2008, respectively | (416,566) | (411,659) | [1] | ||||||||||||||||
Retained earnings | 861,922 | 988,786 | [1] | ||||||||||||||||
Accumulated other comprehensive income - deferred hedge gains, net of tax | 64,851 | 88,788 | [1] | ||||||||||||||||
Total stockholders' equity attributable to common stockholders | 3,447,356 | 3,576,896 | [1] | ||||||||||||||||
Noncontrolling interests in consolidating subsidiaries | 86,876 | 103,963 | [1] | ||||||||||||||||
Total stockholders' equity | 3,534,232 | 3,680,859 | [1] | ||||||||||||||||
Commitments and contingencies | - | - | [1] | ||||||||||||||||
Liabilities and Stockholders' Equity, Total | $8,681,068 | $9,161,785 | [1] | ||||||||||||||||
[1]Retrospectively adjusted as described in Note B. |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | |||||||||||||||||||
In Thousands, except Share data | Sep. 30, 2009
| Dec. 31, 2008
| |||||||||||||||||
Trade, allowance for doubtful accounts | $1,437 | $22,464 | [1] | ||||||||||||||||
Other, allowance for doubtful accounts | 5,566 | 5,491 | [1] | ||||||||||||||||
Other, allowance for doubtful accounts | $7,172 | $4,410 | [1] | ||||||||||||||||
Common stock, par value | 0.01 | 0.01 | [1] | ||||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | [1] | ||||||||||||||||
Common stock, shares issued | 125,191,035 | 124,566,963 | [1] | ||||||||||||||||
Treasury stock, shares | 10,863,513 | 10,020,502 | [1] | ||||||||||||||||
[1]Retrospectively adjusted as described in Note B. |
Statement Of Income Alternative
Statement Of Income Alternative (USD $) | |||||||||||||||||||
In Thousands, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |||||||||||||||
Revenues and other income: | |||||||||||||||||||
Oil and gas | $409,969 | $600,413 | [1] | $1,148,512 | $1,777,579 | [1] | |||||||||||||
Interest and other | 503 | 2,285 | [1] | 99,761 | 33,697 | [1] | |||||||||||||
Gain (loss) on disposition of assets, net | (385) | 190 | [1] | (447) | 4,768 | [1] | |||||||||||||
Total revenues and other income, Total | 410,087 | 602,888 | [1] | 1,247,826 | 1,816,044 | [1] | |||||||||||||
Costs and expenses: | |||||||||||||||||||
Oil and gas production | 90,394 | 107,159 | [1] | 285,617 | 297,299 | [1] | |||||||||||||
Production and ad valorem taxes | 28,089 | 46,124 | [1] | 79,503 | 129,670 | [1] | |||||||||||||
Depletion, depreciation and amortization | 162,605 | 121,265 | [1] | 509,422 | 338,153 | [1] | |||||||||||||
Impairment of oil and gas properties | 0 | 89,753 | [1] | 21,091 | 89,753 | [1] | |||||||||||||
Exploration and abandonments | 25,073 | 109,420 | [1] | 77,861 | 172,714 | [1] | |||||||||||||
General and administrative | 34,799 | 31,622 | [1] | 102,728 | 103,739 | [1] | |||||||||||||
Accretion of discount on asset retirement obligations | 2,754 | 1,981 | [1] | 8,259 | 5,885 | [1] | |||||||||||||
Interest | 43,438 | 41,176 | [1] | 128,051 | 123,124 | [1] | |||||||||||||
Hurricane activity, net | 1,830 | 541 | [1] | 18,280 | 2,400 | [1] | |||||||||||||
Derivative losses, net | 15,222 | 3,858 | [1] | 85,583 | 1,451 | [1] | |||||||||||||
Other | 21,363 | 33,964 | [1] | 89,467 | 54,153 | [1] | |||||||||||||
Costs and Expenses, Total | 425,567 | 586,863 | [1] | 1,405,862 | 1,318,341 | [1] | |||||||||||||
Income (loss) from continuing operations before income taxes | (15,480) | 16,025 | [1] | (158,036) | 497,703 | [1] | |||||||||||||
Income tax benefit (provision) | 5,206 | (13,165) | [1] | 47,671 | (217,615) | [1] | |||||||||||||
Income (loss) from continuing operations | (10,274) | 2,860 | [1] | (110,365) | 280,088 | [1] | |||||||||||||
Income from discontinued operations, net of tax | 12,107 | 327 | [1] | 13,868 | 14,718 | [1] | |||||||||||||
Net income (loss) | 1,833 | 3,187 | [1] | (96,497) | 294,806 | [1] | |||||||||||||
Net income attributable to the noncontrolling interests | (8,998) | (8,422) | [1] | (12,269) | (15,388) | [1] | |||||||||||||
Net income (loss) attributable to common stockholders | (7,165) | (5,235) | [1] | (108,766) | 279,418 | [1] | |||||||||||||
Basic earnings per share: | |||||||||||||||||||
Income (loss) from continuing operations attributable to common stockholders | -0.17 | -0.04 | [1] | -1.07 | 2.22 | [1] | |||||||||||||
Income from discontinued operations attributable to common stockholders | 0.11 | $0 | [1] | 0.12 | 0.12 | [1] | |||||||||||||
Net income (loss) attributable to common stockholders | -0.06 | -0.04 | [1] | -0.95 | 2.34 | [1] | |||||||||||||
Diluted earnings per share: | |||||||||||||||||||
Income (loss) from continuing operations attributable to common stockholders | -0.17 | -0.04 | [1] | -1.07 | 2.2 | [1] | |||||||||||||
Income from discontinued operations attributable to common stockholders | 0.11 | $0 | [1] | 0.12 | 0.12 | [1] | |||||||||||||
Net income (loss) attributable to common stockholders | -0.06 | -0.04 | [1] | -0.95 | 2.32 | [1] | |||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 114,123 | 118,110 | [1] | 114,118 | 118,136 | [1] | |||||||||||||
Diluted | 114,123 | 118,110 | [1] | 114,118 | 118,765 | [1] | |||||||||||||
Dividends declared per share | 0.04 | 0.16 | [1] | 0.08 | 0.3 | [1] | |||||||||||||
Amounts attributable to common stockholders: | |||||||||||||||||||
Income (loss) from continuing operations | (19,272) | (5,562) | [1] | (122,634) | 264,700 | [1] | |||||||||||||
Discontinued operations | 12,107 | 327 | [1] | 13,868 | 14,718 | [1] | |||||||||||||
Net income (loss) | ($7,165) | ($5,235) | [1] | ($108,766) | $279,418 | [1] | |||||||||||||
[1]Retrospectively adjusted as described in Note B. |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | |||||||||||||||||||
In Thousands | Common Stock
| Additional Paid-in Capital
| Treasury Stock
| Retained Earnings
| Accumulated Other Comprehensive Income
| Noncontrolling Interests
| Total
| ||||||||||||
Beginning Balance at Dec. 31, 2008 | $1,246 | [1] | $2,909,735 | [1] | ($411,659) | [1] | $988,786 | [1] | $88,788 | [1] | $103,963 | [1] | $3,680,859 | [1] | |||||
Beginning Balance at Dec. 31, 2008 | 114,546 | [1] | |||||||||||||||||
Dividends declared ($0.08 per share) | (9,405) | (9,405) | |||||||||||||||||
Exercise of long-term incentive plan stock options and employee stock purchases | 431 | ||||||||||||||||||
Exercise of long-term incentive plan stock options and employee stock purchases | 16,648 | (8,693) | 7,955 | ||||||||||||||||
Purchase of treasury stock | (1,273) | ||||||||||||||||||
Purchase of treasury stock | (21,555) | (21,555) | |||||||||||||||||
Purchase of subsidiary noncontrolling units | (258) | (258) | |||||||||||||||||
Tax provision related to stock-based compensation | (3,583) | (3,583) | |||||||||||||||||
Compensation costs: | |||||||||||||||||||
Vested compensation awards, net | 624 | ||||||||||||||||||
Vested compensation awards, net | 6 | (6) | 0 | ||||||||||||||||
Compensation costs included in net income (loss) | 29,751 | 164 | 29,915 | ||||||||||||||||
Cash contributions of noncontrolling interests | 150 | 150 | |||||||||||||||||
Cash distributions to noncontrolling interests | (15,042) | (15,042) | |||||||||||||||||
Net income (loss) | (108,766) | 12,269 | (96,497) | ||||||||||||||||
Deferred hedging activity, net of tax: | |||||||||||||||||||
Hedge fair value changes, net | 10,477 | 3,692 | 14,169 | ||||||||||||||||
Net hedge gains included in continuing operations | (34,414) | (18,062) | (52,476) | ||||||||||||||||
Ending Balance at Sep. 30, 2009 | 114,328 | ||||||||||||||||||
Ending Balance at Sep. 30, 2009 | $1,252 | $2,935,897 | ($416,566) | $861,922 | $64,851 | $86,876 | $3,534,232 | ||||||||||||
[1]Retrospectively adjusted as described in Note B. |
2_Statement Of Shareholders Equ
Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $) | |||||||||||||||||||
3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | ||||||||||||||||
Dividends declared, per share | 0.04 | 0.16 | [1] | 0.08 | 0.3 | [1] | |||||||||||||
[1]Retrospectively adjusted as described in Note B. |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | |||||||||||||||||||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income (loss) | ($96,497) | $294,806 | [1] | ||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||
Depletion, depreciation and amortization | 509,422 | 338,153 | [1] | ||||||||||||||||
Impairment of oil and gas properties | 21,091 | 89,753 | [1] | ||||||||||||||||
Exploration expenses, including dry holes | 40,699 | 93,996 | [1] | ||||||||||||||||
Hurricane activity, net | 16,200 | 0 | [1] | ||||||||||||||||
Deferred income taxes | (67,397) | 160,346 | [1] | ||||||||||||||||
(Gain) loss on disposition of assets, net | 447 | (4,768) | [1] | ||||||||||||||||
Accretion of discount on asset retirement obligations | 8,259 | 5,885 | [1] | ||||||||||||||||
Discontinued operations | (5,373) | 24,609 | [1] | ||||||||||||||||
Interest expense | 20,694 | 21,252 | [1] | ||||||||||||||||
Derivative related activity | 48,305 | 31,118 | [1] | ||||||||||||||||
Amortization of stock-based compensation | 29,319 | 25,571 | [1] | ||||||||||||||||
Amortization of deferred revenue | (110,901) | (118,644) | [1] | ||||||||||||||||
Other noncash items | 30,664 | 30,495 | [1] | ||||||||||||||||
Change in operating assets and liabilities | |||||||||||||||||||
Accounts receivable, net | 71,074 | (39,039) | [1] | ||||||||||||||||
Income taxes receivable | 44,762 | (9,522) | [1] | ||||||||||||||||
Inventories | (52,069) | (54,990) | [1] | ||||||||||||||||
Prepaid expenses | (6,900) | (7,152) | [1] | ||||||||||||||||
Other current assets | 98,532 | (2,561) | [1] | ||||||||||||||||
Accounts payable | (94,238) | 15,364 | [1] | ||||||||||||||||
Interest payable | (14,766) | (12,724) | [1] | ||||||||||||||||
Income taxes payable | 9,127 | 11,528 | [1] | ||||||||||||||||
Other current liabilities | (89,629) | (76,972) | [1] | ||||||||||||||||
Net cash provided by operating activities | 410,825 | 816,504 | [1] | ||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Proceeds from disposition of assets, net of cash sold | 24,247 | 143,352 | [1] | ||||||||||||||||
Additions to oil and gas properties | (319,928) | (996,721) | [1] | ||||||||||||||||
Additions to other assets and other property and equipment, net | (17,310) | (31,350) | [1] | ||||||||||||||||
Net cash used in investing activities | (312,991) | (884,719) | [1] | ||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Borrowings under long-term debt | 386,269 | 794,998 | [1] | ||||||||||||||||
Principal payments on long-term debt | (434,269) | (732,775) | [1] | ||||||||||||||||
Distributions to noncontrolling interests, net | (14,892) | (2,941) | [1] | ||||||||||||||||
Proceeds from issuance of partnership common units, net of issuance costs | 0 | 165,978 | [1] | ||||||||||||||||
Borrowings (payments) of other liabilities | (1,069) | 4,686 | [1] | ||||||||||||||||
Exercise of long-term incentive plan stock options and employee stock purchase plan | 7,955 | 8,008 | [1] | ||||||||||||||||
Purchases of treasury stock and subsidiary noncontrolling units | (21,813) | (86,201) | [1] | ||||||||||||||||
Excess tax (provisions) benefits from share-based payment arrangements | (3,583) | 381 | [1] | ||||||||||||||||
Payment of financing fees | (4,475) | (12,377) | [1] | ||||||||||||||||
Dividends paid | (4,679) | (16,896) | [1] | ||||||||||||||||
Net cash provided by (used in) financing activities | (90,556) | 122,861 | [1] | ||||||||||||||||
Net increase in cash and cash equivalents | 7,278 | 54,646 | [1] | ||||||||||||||||
Cash and cash equivalents, beginning of period | 48,337 | [1] | 12,171 | [1] | |||||||||||||||
Cash and cash equivalents, end of period | $55,615 | $66,817 | [1] | ||||||||||||||||
[1]Retrospectively adjusted as described in Note B. |
Statement Of Other Comprehensiv
Statement Of Other Comprehensive Income (USD $) | |||||||||||||||||||
In Thousands | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |||||||||||||||
Net income (loss) | $1,833 | $3,187 | [1] | ($96,497) | $294,806 | [1] | |||||||||||||
Hedge activity: | |||||||||||||||||||
Hedge fair value changes, net | 0 | 580,567 | [1] | 22,490 | (168,801) | [1] | |||||||||||||
Net hedge (gains) losses included in continuing operations | (25,887) | 145,106 | [1] | (103,039) | 389,016 | [1] | |||||||||||||
Income tax provision (benefit) | 7,272 | (269,973) | [1] | 42,242 | (82,322) | [1] | |||||||||||||
Other comprehensive income (loss) | (18,615) | 455,700 | [1] | (38,307) | 137,893 | [1] | |||||||||||||
Comprehensive income (loss) | (16,782) | 458,887 | [1] | (134,804) | 432,699 | [1] | |||||||||||||
Comprehensive (income) loss attributable to noncontrolling interest | (3,417) | (40,097) | [1] | 853 | (28,031) | [1] | |||||||||||||
Comprehensive income (loss) attributable to common stockholders | ($20,199) | $418,790 | [1] | ($133,951) | $404,668 | [1] | |||||||||||||
[1]Retrospectively adjusted as described in Note B. |
NOTE A. Organization and Nature
NOTE A. Organization and Nature of Operations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE A. Organization and Nature of Operations | NOTE A.Organization and Nature of Operations Pioneer is a Delaware corporation whose common stock is listed and traded on the New York Stock Exchange. The Company is a large independent oil and gas exploration and production company with continuing operations in the United States, South Africa and Tunisia. |
NOTE B. Basis of Presentation
NOTE B. Basis of Presentation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE B. Basis of Presentation | NOTE B.Basis of Presentation Presentation. In the opinion of management, the consolidated financial statements of the Company as of September30, 2009 and for the three and nine months ended September30, 2009 and 2008 include all adjustments and accruals, consisting only of normal recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Report pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in connection with the consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December31, 2008. Discontinued operations. During Juneand August 2009, the Company sold its Mississippi assets and substantially all of its shelf properties in the Gulf of Mexico, respectively. The Company has reflected the results of operations of both of these asset groups as discontinued operations, rather than as components of continuing operations. In April 2006 and November 2007, the Company completed the sale of its Argentine assets and Canadian subsidiaries, respectively. During the three and nine months ended September30, 2008, the Company continued to realize certain net costs and expenses associated with these divestitures. See NoteR for additional information regarding discontinued operations. Allowances for doubtful accounts. As of September30, 2009 and December31, 2008, the Companys allowances for doubtful accounts totaled $14.2 million and $32.4 million, respectively. The Company establishes allowances for doubtful accounts equal to the estimable portions of accounts and notes receivables for which failure to collect is considered probable. The Company estimates the portions of joint interest receivables for which failure to collect is probable based on percentages of joint interest receivables that are past due. The Company estimates the portions of other receivables for which failure to collect is probable based on the relevant facts and circumstances surrounding the receivable. Allowances for doubtful accounts are recorded as reductions to the carrying values of the receivables included in the Companys consolidated balance sheets and as charges to other expense in the Companys consolidated statements of operations in the accounting periods during which failure to collect an estimable portion is determined to be probable. Changes in the Companys allowance for doubtful accounts during the three and nine months ended September30, 2009 are summarized in the following table: ThreeMonthsEnded September30, 2009 NineMonthsEnded September30, 2009 (in thousands) Beginning allowance for doubtful accounts balance $ 12,205 $ 32,365 Amount recorded in other expense for bad debt expense 1,985 1,241 Write-offs of uncollectible accounts (a) (15 ) (19,431 ) |
NOTE C. Exploratory Well Costs
NOTE C. Exploratory Well Costs | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE C. Exploratory Well Costs | NOTE C.Exploratory Well Costs The Company capitalizes exploratory well costs until a determination is made that the well has either found proved reserves or that it is impaired. The capitalized exploratory well costs are presented in proved properties in the consolidated balance sheets. If the exploratory well is determined to be impaired, the well costs are charged to exploration and abandonments expense. The following table reflects the Companys capitalized exploratory well activity during the three and nine months ended September30, 2009: ThreeMonthsEnded September30, 2009 NineMonthsEnded September30, 2009 (in thousands) Beginning capitalized exploratory well costs $ 113,997 $ 124,014 Additions to exploratory well costs pending the determination of proved reserves 20,420 46,758 Reclassification due to determination of proved reserves (5,949 ) (33,150 ) Exploratory well costs charged to exploration expense (6,798 ) (15,952 ) Ending capitalized exploratory well costs $ 121,670 $ 121,670 The following table provides an aging, as of September30, 2009 and December31, 2008, of capitalized exploratory well costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year, based on the date drilling was completed: September30,2009 December31,2008 (in thousands, except well counts) Capitalized exploratory well costs that have been suspended: One year or less $ 30,850 $ 54,423 More than one year 90,820 69,591 $ 121,670 $ 124,014 Number of projects with exploratory well costs that have been suspended for a period greater than one year 5 4 The following table provides an aging of capitalized costs of exploration projects that have been suspended for more than one year as of September30, 2009: Total 2009 2008 2007 2006 (in thousands) United States: Cosmopolitan Unit $ 60,613 $ 1,952 $ 6,344 $ 51,488 $ 829 Tunisia 30,207 962 20,866 4,434 3,945 Total $ 90,820 $ 2,914 $ 27,210 $ 55,922 $ 4,774 Cosmopolitan Unit. The Company owns a 100 percent working interest in, and is the operator of, the Cosmopolitan Unit in the Cook Inlet of Alaska. During 2007, the Company drilled the Hansen #1A L1 well, a lateral sidetrack from an existing wellbore, to appraise the resource potential of the unit. The initial unstimulated production test results were encouraging. The Company plans to workover the well in the fourth quarter 2009 to repair the casing. The well may be fracture stimulated in 2010 contingent upon the results of the casing repair and subsequent flow testing. The Company will continue to conduct permitting activities and facilities planning during the fourth quarter of 2009 and may drill another appraisal well in 2 |
NOTE D. Disclosures About Fair
NOTE D. Disclosures About Fair Value Measurements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE D. Disclosures About Fair Value Measurements | NOTE D.Disclosures About Fair Value Measurements The valuation framework of ASC 820, which addresses fair value measurements, is based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a companys own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy: Level 1 quoted prices for identical assets or liabilities in active markets. Level 2 quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means. Level 3 unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. The following table presents the Companys assets and liabilities that are measured at fair value on a recurring basis as of September30, 2009, for each of the fair value hierarchy levels: Fair Value Measurements at Reporting Date Using QuotedPricesin ActiveMarketsfor Identical Assets (Level 1) SignificantOther Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at September30, 2009 (in thousands) Assets: Trading securities $ 231 $ 73 $ $ 304 Commodity derivatives 71,706 5,346 77,052 Deferred compensation plan assets 25,582 25,582 Total assets $ 25,813 $ 71,779 $ 5,346 $ 102,938 Liabilities: Commodity derivatives $ $ 146,741 $ 3,939 $ 150,680 Interest rate derivatives 6,951 6,951 Total liabilities $ $ 153,692 $ 3,939 $ 157,631 The following tables present the changes in the fair values of the Companys net commodity derivative assets classified as Level 3 in the fair value hierarchy: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ThreeMonthsEnded September30, 2009 NGLSwapContracts (in thousands) Beginning balance $ 5,466 Total gains (losses) (a): Net unrealized losses included in earnings (1,695 ) Net realized losses included in earnings (2,423 ) Settlements 59 Ending balance $ 1,407 (a) The hedge-effective portions of realized gains and losses on commodity derivatives in AOCI Hedging |
NOTE E. Income Taxes
NOTE E. Income Taxes | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE E. Income Taxes | NOTE E.Income Taxes The Company accounts for income taxes in accordance with the provisions of ASC 740 (formerly SFAS 109), Income Taxes (ASC 740). ASC 740 requires that the Company continually assess both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration. Pioneer monitors Company-specific, oil and gas industry and worldwide economic factors to assess the likelihood that the Companys net operating loss carryforwards (NOLs) and other deferred tax attributes in the U.S. federal, state and foreign tax jurisdictions will be utilized prior to their expiration. As of September30, 2009 and December31, 2008, the Companys valuation allowances (relating primarily to foreign tax jurisdictions) were $44.2 million and $37.5 million, respectively. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized and prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of September30, 2009, the Company had no unrecognized tax benefits. The Companys policy is to account for interest charges with respect to income taxes as interest expense and any penalties, with respect to income taxes, as other expense in the consolidated statements of operations. The Company files income tax returns in the U.S. federal and various state and foreign jurisdictions. With few exceptions, the Company believes that it is no longer subject to examinations by tax authorities for years before 2004. As of September30, 2009, no adjustments had been proposed in any jurisdiction that would have a significant effect on the Companys future results of operations or financial position. On June30, 2009, pursuant to Tunisian law, the Company established an investment reserve equal to 20 percent of 2008 taxable profits on the Adam and Cherouq concessions and thereby reduced current taxes payable by $13.1 million with a corresponding offset to deferred income taxes in the Companys accompanying consolidated balance sheets. The investment reserve will be used to fund future drilling activity or pipeline infrastructure projects in Tunisia. In the reported results for the nine months ended September30, 2009, the Company recognized an additional deferred provision of $2.9 million and a current tax benefit of $178 thousand related to the Companys correction of the understatement of reported earnings for the three months ended June30, 2009. See Note B for additional information regarding this correction. Income tax (provisions) benefits. The Companys income tax (provisions) benefits attributable to income from continuing operations consisted of the following for the three and nine months ended September30, 2009 and 2008: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 (in thousands) Current: U.S. federal $ (1,335 ) $ (124 ) $ (934 ) $ 8,784 U.S. state (2,206 ) 967 (9,142 ) (6 |
NOTE F. Long-term Debt
NOTE F. Long-term Debt | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE F. Long-term Debt | NOTE F.Long-term Debt Lines of credit. During April 2007, the Company entered into an Amended and Restated 5-Year Revolving Credit Agreement (the Credit Facility) that matures in April 2012, unless extended in accordance with the terms of the Credit Facility. The Credit Facility provides for initial aggregate loan commitments of $1.5 billion, which may be increased to a maximum aggregate amount of $2.0 billion if the lenders increase their loan commitments or if loan commitments of new financial institutions are added. As of September30, 2009, the Company had $730.0 million of outstanding borrowings under the Credit Facility and $46.0 million of undrawn letters of credit, all of which were commitments under the Credit Facility, leaving the Company with $724.0 million of unused borrowing capacity under the Credit Facility. Effective April29, 2009, the Company and the lenders under the Companys Credit Facility amended the Credit Facility to provide the Company additional financial flexibility. The Credit Facility contains certain financial covenants, one of which required the Company to maintain a ratio of the net present value of the Companys oil and gas properties to total debt of at least 1.75 to 1.0 until the Company achieves an investment grade rating by Moodys Investors Service, Inc. or Standard Poors Ratings Group, Inc. The amendment changed that ratio to 1.5 to 1.0 through the period ending March31, 2011, after which time the ratio would revert to 1.75 to 1.0, and provides that the Company may include in the calculation of the present value of its oil and gas properties 75 percent of the market value of its ownership of limited partner units of Pioneer Southwest. The covenant requiring the Company to maintain a ratio of total debt to total capitalization of no more than 0.60 to 1.0 was not changed. The amendment also adjusted certain borrowing rates and commitment fees, and changed certain provisions relating to the consequences if a lender under the Credit Facility defaults in its obligations under the agreement. After taking into account the amendment, revolving loans under the Credit Facility bear interest, at the option of the Company, based on (a)a rate per annum equal to the higher of the prime rate announced from time to time by JPMorgan Chase Bank or the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System during the last preceding business day plus .5 percent plus a defined alternate base rate spread margin (ABR Margin), which is currently one percent based on the Companys debt rating or (b)a base Eurodollar rate, substantially equal to LIBOR, plus a margin (the Applicable Margin), which is currently two percent and is also determined by the Companys debt rating. Swing line loans under the Credit Facility bear interest at a rate per annum equal to the ASK rate for Federal funds periodically published by the Dow Jones Market Service plus the Applicable Margin. Letters of credit outstanding under the Credit Facility are subject to a per annum fee, representing the Applicable Margin plus .125 percent. The Company also pays commitment fees on undrawn amounts unde |
NOTE G. Derivative Financial In
NOTE G. Derivative Financial Instruments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE G. Derivative Financial Instruments | NOTE G.Derivative Financial Instruments The Company uses financial derivative contracts to manage exposures to commodity price, interest rate and foreign currency fluctuations. The Company generally does not enter into derivative financial instruments for speculative or trading purposes. The Company also may enter physical delivery contracts to effectively provide commodity price protection. Because these contracts are not expected to be net cash settled, they are considered to be normal sales contracts and not derivatives. Therefore, physical delivery contracts are not accounted for as derivative financial instruments in the financial statements. All derivative contracts are recorded on the balance sheet at estimated fair value. Fair value is generally determined based on the credit-adjusted present value difference between the fixed contract price and the underlying market price at the determination date. Effective February1, 2009, the Company discontinued hedge accounting on all existing derivative instruments and since that date has accounted for derivative instruments using the mark-to-market accounting method. Therefore, the Company will recognize all future changes in the fair values of its derivative contracts as gains or losses in the earnings of the period in which they occur. Changes in the fair value of effective cash flow hedges prior to the Companys discontinuance of hedge accounting on February1, 2009 were recorded as a component of AOCI Hedging, which has been or will be transferred to earnings when the hedged transaction is recognized in earnings. Any ineffective portion of changes in the fair value of hedge derivatives prior to February1, 2009 was recorded in the earnings of the period of change. The ineffective portion was calculated as the difference between the change in fair value of the hedge derivative and the estimated change in cash flows from the item hedged. Fair value derivatives. The Company monitors the debt capital markets and interest rate trends to identify opportunities to enter into and terminate interest rate derivative contracts, with the objective of reducing the Companys costs of capital. As of September30, 2009 and December31, 2008, the Company was not a party to any fair value hedges. Cash flow derivatives. The Company utilizes commodity swap and collar contracts to (i)reduce the effect of price volatility on the commodities the Company produces and sells, (ii)support the Companys annual capital budgeting and expenditure plans and (iii)reduce commodity price risk associated with certain capital projects. The Company also, from time to time, utilizes interest rate contracts to reduce the effect of interest rate volatility on the Companys indebtedness and forward currency exchange agreements to reduce the effect of exchange rate volatility. Oil prices. All material physical sales contracts governing the Companys oil production have been tied directly or indirectly to the NYMEX prices. The following table sets forth the volumes in Bbls underlying the Companys outstanding oil derivative contracts and the weighted average NYMEX prices per Bbl for those contracts as of September30, 2009: |
NOTE H. Asset Retirement Obliga
NOTE H. Asset Retirement Obligations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE H. Asset Retirement Obligations | NOTE H.Asset Retirement Obligations The Companys asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. The Company does not provide for a market risk premium associated with asset retirement obligations because a reliable estimate cannot be determined. The Company has no assets that are legally restricted for purposes of settling asset retirement obligations. The following table summarizes the Companys asset retirement obligation transactions during the three and nine months ended September30, 2009 and 2008: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 (in thousands) Beginning asset retirement obligations $ 154,172 $ 185,911 $ 172,433 $ 208,184 Liabilities assumed in acquisitions 756 777 New wells placed on production and changes in estimates (a) 1,202 1,592 16,568 (6,200 ) Liabilities reclassified to discontinued operations held for sale (1,756 ) Disposition of wells (491 ) (13,334 ) Liabilities settled (15,587 ) (31,774 ) (40,562 ) (50,578 ) Accretion of discount on continuing operations 2,754 1,981 8,259 5,885 Accretion of discount on discontinued operations 88 199 530 597 Ending asset retirement obligations $ 142,138 $ 158,665 $ 142,138 $ 158,665 (a) During the nine months ended September30, 2008, the Company recorded a $9.0 million decrease in the abandonment estimates and associated insurance recovery estimates for the East Cameron facility that was destroyed by Hurricane Rita in 2005. During the nine months ended September30, 2009, the Company recorded a $16.2 million increase to the abandonment estimate associated with the East Cameron facility. See Note O for additional information regarding the East Cameron facility. The Company records the current and noncurrent portions of asset retirement obligations in other current liabilities and other liabilities, respectively, in the accompanying consolidated balance sheets. As of September30, 2009 and December31, 2008, the current portions of the Companys asset retirement obligations were $9.9 million and $29.9 million, respectively. |
NOTE I. Postretirement Benefit
NOTE I. Postretirement Benefit Obligations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE I. Postretirement Benefit Obligations | NOTE I.Postretirement Benefit Obligations As of September30, 2009 and December31, 2008, the Company had $9.2 million and $9.6 million, respectively, of unfunded accumulated postretirement benefit obligations, the current and noncurrent portions of which are included in other current liabilities and other liabilities, respectively, in the consolidated balance sheets. These obligations are comprised of five plans of which four relate to predecessor entities that the Company acquired in prior years. These plans had no assets as of September30, 2009 or December31, 2008. Other than participants in the Companys retirement plan, the participants of these plans are not current employees of the Company. The following table reconciles changes in the Companys unfunded accumulated postretirement benefit obligations during the three and nine months ended September30, 2009 and 2008: ThreeMonthsEnded NineMonthsEnded September30, September30, 2009 2008 2009 2008 (in thousands) Beginning accumulated postretirement benefit obligations $ 9,364 $ 10,341 $ 9,612 $ 10,494 Net benefit payments (361 ) (599 ) (1,052 ) (1,162 ) Service costs 57 47 171 142 Accretion of interest 164 158 493 473 Ending accumulated postretirement benefit obligations $ 9,224 $ 9,947 $ 9,224 $ 9,947 |
NOTE J. Commitments and Conting
NOTE J. Commitments and Contingencies | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE J. Commitments and Contingencies | NOTE J.Commitments and Contingencies Legal actions. The Company is party to the legal actions that are described below. The Company is also a party to other proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to such other proceedings and claims will not have a material adverse effect on the Companys consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company will continue to evaluate its litigation on a quarter-by-quarter basis and will establish and adjust any litigation reserves as appropriate to reflect its assessment of the then current status of litigation. MOSH Holding. On April11, 2005, the Company and its principal United States subsidiary, Pioneer Natural Resources USA, Inc., were named as defendants in MOSH Holding, L.P. v Pioneer Natural Resources Company; Pioneer Natural Resources USA, Inc.; Woodside Energy (USA) Inc.; and JPMorgan Chase Bank, N.A., as Trustee of the Mesa Offshore Trust (the Trust), which was formerly pending before the Judicial District Court of Harris County, Texas (334th Judicial District) (the Court). In April, 2009, the Company and all parties in the lawsuit reached an agreement to settle the lawsuit. Under the terms of the settlement agreement, the Company will pay to the Trust the sum of $13 million in exchange for a full and final release of all claims made or that could have been made in the lawsuit (the Claims). The Company will also contribute to the Trust any proceeds obtained from the Companys sale of its complete interest, including its working interest, in the Brazos Block A-39 tract, which will be offered for sale in conjunction with the Trusts sale of its assets. The settlement agreement is subject to customary conditions, including a condition that the settlement is not final until it is approved by the Court and the Court issues a final, non-appealable judgment disposing of all Claims. In September, 2009, the Court entered a final judgment approving the settlement and dismissing all Claims. Subsequently, certain unit-holders in the Trust filed an appeal in Texas state court seeking to reverse the Courts final judgment. The settlement will not be final and completed until such appeal is dismissed and any other post-judgment proceedings are exhausted. Pioneer expects to prevail with respect to any such appeal or any other post-judgment proceedings attempting to avoid the settlement. Colorado Notice of Violation. On May13, 2008, the Company was served with a Notice of Violation/Cease and Desist Order by the State of Colorado Department of Public Health and Environmental Water Quality Control Division. The Notice alleges violations of stormwater discharge permits in the Companys Raton Basin and Lay Creek operations, specifically deficiencies in the Companys stormwater management plans, failure to implement and maintain best management practices to protect stormwater runoff and failure to conduct inspections of the stormwater management system. The Company has fi |
NOTE K. Earnings Per Share From
NOTE K. Earnings Per Share From Continuing Operations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE K. Earnings Per Share From Continuing Operations | NOTE K.Earnings Per Share From Continuing Operations Basic earnings per share from continuing operations is computed by dividing earnings from continuing operations attributable to common stockholders by the weighted average number of common shares outstanding for the period. The computation of diluted earnings per share from continuing operations reflects the potential dilution that could occur if securities or other contracts to issue common stock that are dilutive to income from continuing operations were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the earnings of the Company. During periods that the Company realizes a loss from continuing operations attributable to common stockholders, securities or other contracts to issue common stock would not be dilutive to loss per share and conversion into common stock is assumed not to occur. The Companys earnings from continuing operations attributable to common stockholders is computed as income (loss) from continuing operations less participating share-based earnings. The following table is a reconciliation of the Companys income (loss) from continuing operations to income (loss) from continuing operations attributable to common stockholders for the three- and nine-month periods ended September30, 2009 and 2008: Three Months Ended Nine Months Ended September30, September30, 2009 2008 2009 2008 (in thousands) Income (loss) from continuing operations $ (10,274 ) $ 2,860 $ (110,365 ) $ 280,088 Participating share-based earnings (a) (94 ) (3,440 ) Income (loss) from continuing operations available to common stockholders $ (10,274 ) $ 2,860 $ (110,459 ) $ 276,648 (a) In accordance with ASC 260 (formerly FSP EITF 03-6-1), unvested restricted stock share awards and restricted stock unit awards represent participating securities because they participate in nonforfeitable dividends with the Companys common stock. Participating share-based earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unvested restricted stock awards and restricted stock unit awards do not participate in undistributed net losses as they are not contractually obligated to do so. The following table is a reconciliation of basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three- and nine-month periods ended September30, 2009 and 2008: Three Months Ended Nine Months Ended September30, September30, 2009 2008 2009 2008 (in thousands) Weighted average common shares outstanding (a): Basic 114,123 118,110 114,118 118,136 Dilutive common stock options (b) 312 Contingently issuable - performance shares (b) 120 Convertible notes dilution (c) 197 Diluted 114,123 118,1 |
NOTE L. Geographic Operating Se
NOTE L. Geographic Operating Segment Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE L. Geographic Operating Segment Information | NOTE L.Geographic Operating Segment Information The Companys only operations are oil and gas exploration and producing activities; however, the Company is organizationally structured along geographic operating segments or regions. The Company has reportable operations in the United States, South Africa and Tunisia. The following tables provide the Companys geographic operating segment data for the three and nine months ended September30, 2009 and 2008. Geographic operating segment income tax (provisions) benefits have been determined based on statutory rates existing in the various tax jurisdictions where the Company has oil and gas producing activities. The Headquarters table column includes income and expenses that are not routinely included in the earnings measures internally reported to management on a geographic operating segment basis and operations in Equatorial Guinea and Nigeria, where the Company concluded exploration activities during 2007. United States SouthAfrica Tunisia Headquarters Consolidated Total (in thousands) Three Months Ended September30, 2009 Revenues and other income: Oil and gas $ 350,034 $ 20,836 $ 39,099 $ $ 409,969 Interest and other 503 503 Gain (loss) on disposition of assets, net 80 (465 ) (385 ) 350,114 20,836 39,099 38 410,087 Costs and expenses: Oil and gas production 84,083 822 5,489 90,394 Production and ad valorem taxes 28,089 28,089 Depletion, depreciation and amortization 128,954 20,813 5,639 7,199 162,605 Exploration and abandonments 19,908 114 4,910 141 25,073 General and administrative 34,799 34,799 Accretion of discount on asset retirement obligations 2,754 2,754 Interest 43,438 43,438 Hurricane activity, net 1,830 1,830 Derivative losses, net 15,222 15,222 Other 9,702 11,661 21,363 272,566 21,749 16,038 115,214 425,567 Income (loss) from continuing operations before income taxes 77,548 (913 ) 23,061 (115,176 ) (15,480 ) Income tax benefit (provision) (28,693 ) 265 (12,227 ) 45,861 5,206 Income (loss) from continuing operations $ 48,855 $ (648 ) $ 10,834 $ (69,315 ) $ (10,274 ) United States SouthAfrica Tunisia Headquarters Consolidated Total (in thousands) Three Months Ended September30, 2008 Revenues and other income: |
NOTE M. Impairment of Oil and G
NOTE M. Impairment of Oil and Gas Properties | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE M. Impairment of Oil and Gas Properties | NOTE M. Impairment of Oil and Gas Properties Oil and gas properties assessments. During the first quarter of 2009 and the third quarter of 2008, the downward adjustments to economically recoverable resource potential in the Companys Uinta/Piceance area associated with declines in commodity prices and well performance led to the impairment of the net assets in that area. The Companys estimates of the undiscounted future cash flows attributed to the assets indicated that their carrying amounts were not expected to be recovered. Consequently, the Company recorded noncash charges during the first quarter of 2009 and the third quarter of 2008 of $21.1 million and $89.8 million, respectively, to reduce the carrying value of the Uinta/Piceance area oil and gas properties. The impairment charges reduced the oil and gas properties carrying values to their estimated fair values on those dates, represented by the estimated discounted future cash flows attributable to the assets, which were derived from Level 3 fair value inputs. The Companys primary assumptions of the estimated future cash flows attributable to oil and gas properties are based on (i)proved reserves and risk-adjusted probable and possible reserves and (ii)managements commodity price outlook. Goodwill assessments. The Companys goodwill is attributable to a business combination that was completed in 2004 and is entirely attributable to United States reporting unit. In accordance with ASC 350 (formerly SFAS 142), the Company assesses its goodwill for impairment annually, during the third quarter using a July1 assessment date, and whenever facts or circumstances indicate that the carrying value of its goodwill may be impaired. The Companys assessments of goodwill during the third quarters of 2009 and 2008 indicated that it was not impaired. As a result of declines in commodity prices and a significant decline in the Companys market capitalization during the second half of 2008, the Company assessed whether the carrying value of the United States reporting units goodwill was impaired at December31, 2008,March31, 2009 and June30, 2009 and concluded that it was not impaired based on those assessments. During 2009, commodity prices and the Companys market capitalization increased, providing an indicator that the carrying value of goodwill is not impaired. The Companys assessments of goodwill for impairment include estimates of the fair value of its United States reporting unit and comparisons of those fair value estimates with the United States reporting units carrying value. The Companys estimates of the fair value of its United States reporting unit entail estimating the fair values of the reporting units assets and liabilities. The primary component of those assets and liabilities is comprised of the reporting units oil and gas properties, whose estimated values were based on the estimated discounted future net cash flows expected to be recovered from the properties. The Companys primary assumptions in preparing the estimated discounted future net cash flows expected to be recovered from the properties are based on (i)proved reserves and risk-adjusted probable reserves, (ii)manage |
NOTE N. Volumetric Production P
NOTE N. Volumetric Production Payments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE N. Volumetric Production Payments | NOTE N. Volumetric Production Payments During 2005, the Company sold 27.8 MMBOE of proved reserves by means of three VPP agreements for net proceeds of $892.6 million, including the assignment of the Companys obligations under certain derivative hedge agreements. Proceeds from the VPPs were used to reduce outstanding indebtedness. The first VPP sold 58 Bcf of gas volumes over an expected five-year term that began in February 2005. The second VPP sold 10.8 MMBbls of oil volumes over an expected seven-year term that began in January 2006. The third VPP sold 6.0 Bcf of gas volumes over an expected 32-month term from May 2005 through December 2007, and 6.2 MMBbls of oil volumes over an expected five-year term that began in January 2006. The Companys VPPs represent limited-term overriding royalty interests in oil and gas reserves that: (i)entitle the purchaser to receive production volumes over a period of time from specific lease interests, (ii)are free and clear of all associated future production costs and capital expenditures associated with the reserves, (iii)are nonrecourse to the Company (i.e., the purchasers only recourse is to the reserves acquired), (iv)transfer title of the reserves to the purchaser and (v)allow the Company to retain the remaining reserves after the VPPs volumetric quantities have been delivered. The Company (i)removed the proved reserves associated with the VPPs, (ii)recognized VPP proceeds as deferred revenue which are being amortized on a unit-of-production basis to oil and gas revenues over the term of each VPP, (iii)retained responsibility for 100 percent of the production costs and capital costs related to VPP interests and (iv)no longer recognizes production associated with the VPP volumes. The following table provides information about the deferred revenue carrying values of the Companys VPPs. Gas Oil Total (in thousands) Deferred revenue at December31, 2008 $ 49,435 $ 275,706 $ 325,141 Less: 2009 amortization (36,975 ) (73,926 ) (110,901 ) Deferred revenue at September30, 2009 $ 12,460 $ 201,780 $ 214,240 The above deferred revenue amounts will be recognized in oil and gas revenues in the consolidated statements of operations as noted below, assuming the related VPP production volumes are delivered as scheduled (in thousands): Remaining 2009 $ 37,005 2010 90,215 2011 44,951 2012 42,069 $ 214,240 |
NOTE O. Interest and Other Inco
NOTE O. Interest and Other Income | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE O. Interest and Other Income | NOTE O. Interest and Other Income The following table provides the components of the Companys interest and other income: ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 (in thousands) Alaskan Petroleum Production Tax credits (a) $ $ $ 94,989 $ 17,770 Interest income 108 445 1,289 1,305 Other income (expense) (36 ) (72 ) 1,122 1,199 Deferred compensation plan income 52 96 913 1,642 Foreign currency remeasurement and exchange gains (b) 174 1,508 790 4,033 Credit card rebate 205 308 658 862 Change in asset retirement estimate 4,391 Legal settlements 2,495 Total interest and other income $ 503 $ 2,285 $ 99,761 $ 33,697 (a) The Company earns Alaskan Petroleum Production Tax (PPT) credits on qualifying capital expenditures. The Company recognizes income from PPT credits at the time they are realized through a cash refund or sale. (b) The Companys operations in Africa periodically recognize monetary assets and liabilities in currencies other than their functional currencies. Associated therewith, the Company realizes foreign currency remeasurement and transaction gains and losses. |
NOTE P. Other Expense
NOTE P. Other Expense | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE P. Other Expense | NOTE P. Other Expense The following table provides the components of the Companys other expense: Three Months Ended Nine Months Ended September30, September30, 2009 2008 2009 2008 (in thousands) Idle rig related costs (a) $ 9,702 $ 5,079 $ 52,620 $ 19,657 Transportation commitment loss (b) 29 6,811 Contingency and environmental accrual adjustments 913 8,123 6,998 4,342 Well servicing operations (c) 5,169 (319 ) 10,551 1,320 Foreign currency remeasurement and exchange losses (d) 1,249 (256 ) 5,982 82 Inventory impairment (e) 291 1,894 Other 2,025 1,346 3,370 2,152 Bad debt expense 1,985 19,991 1,241 23,218 Rig impairment 3,382 Total other expense $ 21,363 $ 33,964 $ 89,467 $ 54,153 (a) Represents stacked drilling rig costs under contractual drilling rig commitments and costs incurred to terminate contractual drilling rig commitments prior to their contractual maturities. (b) Primarily represents transportation contract deficiency payment obligations not supported by future production. (c) Represents idle well servicing costs. (d) The Companys operations in Africa periodically recognize monetary assets and liabilities in currencies other than their functional currencies. Associated therewith, the Company realizes foreign currency remeasurement and transaction gains and losses. (e) Represents impairment charges to reduce the carrying value of excess lease and well equipment and supplies inventories to their estimated net realizable values. |
NOTE Q. Insurance Claims
NOTE Q. Insurance Claims | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE Q. Insurance Claims | NOTE Q. Insurance Claims As a result of Hurricane Rita in September 2005, the Companys East Cameron facility, located in the Gulf of Mexico shelf, was destroyed. As of September30, 2009, the Company estimates that it will cost approximately $4 million to $5 million to complete the reclamation and abandonment of the East Cameron facility. The operations to reclaim and abandon the East Cameron facilities began in January 2007. The estimate of the remaining costs to reclaim and abandon the East Cameron facility is based upon an estimate by the Company. The Company has expended approximately $196.2 million on the reclamation and abandonment of the East Cameron facility through September30, 2009. During the three and nine months ended September30, 2009, the Company recorded charges of $1.2 million and $16.2 million, respectively, to hurricane activity, net in the accompanying statements of operations to increase its estimate of the total costs to reclaim and abandon the East Cameron facility. The Company filed a claim with its insurance providers regarding the loss at East Cameron. Under the Companys insurance policies, the East Cameron facility had the following coverages: (a)$14 million of scheduled property value for the platform, which was received in 2005, (b)$4 million of scheduled business interruption insurance after a deductible waiting period, which was received in 2006, (c)$100 million of well restoration and safety, in total, for all assets per occurrence and (d)$400 million for debris removal coverage for all assets per occurrence. During the nine months ended September30, 2009, the Company received $29.7 million from one of its insurance providers related to debris removal, for which the Company had previously recorded a receivable. At the present time, no recoveries have been reflected related to certain costs associated with plugging and abandonment and the well restoration and safety coverages. In 2007, the Company commenced legal actions against its insurance carriers regarding policy coverage issues, primarily related to debris removal, certain costs associated with plugging and abandonment, and the well restoration and safety coverages. The Company believes that a substantial portion of the loss will be recoverable from insurance. |
NOTE R. Discontinued Operations
NOTE R. Discontinued Operations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE R. Discontinued Operations | NOTE R.Discontinued Operations During the three months ended June30, 2009, the Company committed to a plan to sell its shelf properties in the Gulf of Mexico and sold its Mississippi assets. The Company completed the sale of substantially all of its shelf properties in the Gulf of Mexico on August6, 2009. As of September30, 2009, the Company had $1.8 million of asset retirement obligations attributable to certain unsold shelf properties in the Gulf of Mexico that are classified as discontinued operations available for sale in the accompanying consolidated balance sheet as of September30, 2009. The Company had no asset carrying values attributable to these unsold properties as of September30, 2009, and expects to complete its plans to divest the properties during the fourth quarter of 2009 or the first half of 2010. The Company has reflected the results of operations of these properties as discontinued operations, rather than as a component of continuing operations, in the accompanying consolidated statements of operations. Additionally, in April 2006 and November 2007, the Company completed the sale of its Argentine assets and Canadian subsidiaries. During the three and nine months ended September30, 2008, the Company continued to realize certain net costs and expense increments associated with these divestitures. The following table represents the components of the Companys discontinued operations for the three and nine month periods ended September30, 2009 and 2008: ThreeMonthsEnded September30, Nine Months Ended September30, 2009 2008 2009 2008 (in thousands) Revenues and other income: Oil and gas $ 2,000 $ 11,787 $ 13,722 $ 46,406 Interest and other 146 2,135 Gain (loss) on disposition of assets, net (a) 17,823 18,129 (6 ) 19,823 11,933 31,851 48,535 Costs and expenses: Oil and gas production 477 2,384 5,126 5,659 Production and ad valorem taxes (155 ) 95 (37 ) 309 Depletion, depreciation and amortization (a) 1 6,202 3,863 13,620 Exploration and abandonments (a) 7 1,655 290 7,127 General and administrative 144 225 108 440 Accretion of discount on asset retirement obligations (a) 89 199 531 597 Other 338 (51 ) 563 11,098 9,881 27,701 Income from discontinued operations before income taxes 19,260 835 21,970 20,834 Income tax provision: Current (135 ) (306 ) Deferred (a) (7,153 ) (373 ) (8,102 ) (5,811 ) Income from discontinued operations $ 12,107 $ 327 $ 13,868 $ 14,718 (a) Represents the significant noncash components of |
NOTE S. Subsequent Events
NOTE S. Subsequent Events | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE S. Subsequent Events | NOTE S.Subsequent Events In accordance with ASC 855 (formerly SFAS 165), the Company has evaluated subsequent events through November5, 2009, the date of issuance of the unaudited consolidated financial statements. The Company is not aware of any reportable subsequent events through November5, 2009, except as disclosed in Note J. |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-09-30 |
Entity Information
Entity Information (USD $) | ||
9 Months Ended
Sep. 30, 2009 | Nov. 02, 2009
| |
Entity [Text Block] | ||
Trading Symbol | PXD | |
Entity Registrant Name | PIONEER NATURAL RESOURCES CO | |
Entity Central Index Key | 0001038357 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 115,320,979 |