EXHIBIT 99.1
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Reports First Quarter Results
Dallas, Texas, April 26, 2001 -- Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) (TSE:PXD) today announced financial and operating results for the
quarter ended March 31, 2001.
First Quarter 2001 Results
Pioneer reported net income of $67.9 million or $0.68 per share, on a diluted
basis, for the first quarter of 2001. First quarter net income included a $7.3
million or $0.07 per share gain on the disposition of assets and an $8.8 million
or $0.09 per share mark-to-market charge related to derivatives not treated as
hedges. For the same period last year, Pioneer reported net income of $14.8
million or $0.15 per share, which included a gain on sale of assets of $8.4
million or $0.08 per share and a $13.5 million or $0.13 per share mark-to-market
charge related to derivatives not treated as hedges. Cash flow from operations
for the 2001 first quarter was $131.7 million compared to $47.2 million for the
first quarter of 2000.
During the quarter Pioneer reduced long-term debt by $28.5 million and
repurchased 0.4 million common shares at an average price of $16.75 per share.
On March 31, 2001, the Company had 98.2 million common shares outstanding.
First quarter oil sales averaged 35,140 barrels per day (BPD), natural gas
liquid sales averaged 20,426 BPD and natural gas sales averaged 333 million
cubic feet per day (MMcfpd). As expected, first quarter natural gas liquids and
natural gas sales were down as compared to the fourth quarter of 2000 due to
several factors. Pioneer elected not to recover ethane from United States Mid-
continent gas during January to raise the MMBtu content and price realization
per thousand cubic feet (Mcf) of natural gas. As a consequence, U.S. liquids
production was reduced by approximately 1,200 BPD for the days during which
ethane was not recovered. Severe weather negatively impacted United States
Mid-continent production during January. Natural gas production from the Tierra
del Fuego area in Argentina continued to be lower than normal as a result of
increased availability of hydroelectric power and unscheduled plant downtime at
a large gas purchaser. In the Neuquen Basin in Argentina, unanticipated
compressor maintenance negatively impacted first quarter gas production. On an
oil equivalent basis, sales averaged 111,014 BPD. Realized prices (including the
effects of commodity price hedges) for oil and natural gas liquids for the first
quarter were $25.03 and $22.71 per barrel, respectively. The realized price for
natural gas was $4.58 per Mcf.
First quarter production costs averaged $5.59 per barrel oil equivalent (BOE),
increasing 11% over the prior quarter, primarily due to higher production and ad
valorem taxes and field fuel costs resulting from higher gas prices. Exploration
and abandonment costs of $23 million for the quarter included $9 million of
geologic and geophysical costs including seismic costs, $8 million of noncash
leasehold abandonments including expired leases and $6 million of exploration
costs.
For the same quarter last year, Pioneer reported oil sales of 34,759 BPD,
natural gas liquid sales of 22,667 BPD and natural gas sales of 359 MMcfpd.
Realized prices for the 2000 first quarter were $22.44 per barrel for oil,
$19.00 per barrel for natural gas liquids and $1.97 per Mcf for natural gas.
Operations Update
The first quarter of 2001 was especially active for Pioneer. A series of new
discoveries in the deepwater Gulf of Mexico, Gabon and South Africa was
announced earlier this week and in February, the Company announced a discovery
in South Africa on its Boomslang prospect. Development activities have commenced
on two prior discoveries in the deepwater Gulf of Mexico, and three Gulf Coast
shelf exploration wells are currently drilling. Pioneer's development program
was active in each of its core areas in the United States, Canada and Argentina.
Development of the Canyon Express natural gas project in the deepwater Gulf of
Mexico is moving forward as planned with first production anticipated in
mid-2002. The first development well at Aconcagua, one of three fields being
jointly developed in the Canyon Express project, was successful and exceeded
expectations. Two development wells are under way in the Devils Tower field in
the deepwater Gulf of Mexico.
Pioneer is currently utilizing 16 rigs in its active drilling program in the
United States, with eight rigs running in the Permian Basin, one rig running in
the Mid-continent area and seven rigs running in the Gulf Coast area, including
the East Texas Bossier area.
In South Texas, Pioneer continues to aggressively develop the Edwards Reef in
its Pawnee field (100% working interest) and has initiated drilling on the first
of five new vertical wells and two horizontal reentries. In the East Texas
Bossier play, four rigs are drilling, seven wells are producing and four are
waiting on completion or facilities. In the Permian Basin, Pioneer's two oil
discoveries in the Myway Clearfork field are flowing at a combined rate of 390
BPD. These discoveries have set up 20 to 30 potential locations. In the Ozona
field in Crockett County, Texas, Pioneer has drilled 6 wells of its 25 well
program in the Canyon and Strawn formations with the average well producing 600
Mcfpd. By year end, net gas production from the field is expected to increase
approximately 40% to 21 MMcfpd. On the Gulf of Mexico shelf at High Island Block
A-582 (Cyrus prospect-5.5% working interest), the first appraisal well has been
drilled and confirmed over 230 feet of pay found in a discovery well drilled
late last year which encountered two new sands.
In Canada, Pioneer has completed its winter access program in the Chinchaga and
Martin Creek areas in northeast British Columbia. Pioneer drilled 32 wells in
the Chinchaga area and connected 26 wells to the pipeline. In the North
Chinchaga area, eight wells were drilled and eight were connected to the
pipeline. In the Martin Creek and Conroy Black areas, four wells were drilled
and 12 wells were connected including 11 wells that were drilled in last year's
program. Production from Canada is up 34% to 65 MMcfpd on a gas equivalent basis
from December 2000.
In Argentina, the Company's drilling is focused on oil development with four
rigs running. Pioneer has had significant success in the Bajo Barda Gonzalez
drilling program in Argentina's Neuquen Basin. Seven wells have been drilled in
2001, and five additional locations will be drilled in the second quarter. In
the Loma Negra Norte field, Pioneer has drilled five successful wells in the
field and has identified ten to twenty additional drilling locations.
Chairman's Comment
Scott D. Sheffield, Chairman and CEO stated, "We continue to execute our plan to
add value. With strong cash flow in the first quarter, we funded drillbit
success, reduced debt and repurchased shares. Our 2001 exploration program is
delivering exciting results, and we look forward to the results from our
remaining high-impact wells."
Financial Outlook
The following statements are estimates based on current expectations. These
forward-looking statements are subject to a number of risks and uncertainties
which may cause the Company's actual results to differ materially from the
following statements. The last paragraph of this release addresses certain of
the risks and uncertainties to which the Company is subject.
Second quarter production is expected to average 116 to 118 MBPD on an oil
equivalent basis. Gas production is expected to rise as a result of the
successful winter drilling program in Canada and as Argentina enters its winter
season with higher demand for natural gas. In Argentina, repairs on a major
pipeline originally scheduled for the first quarter have been postponed and are
anticipated in the second quarter. Oil production is also expected to increase
in Argentina as a result of an active development drilling program.
During the second quarter, lease operating expenses (including production and ad
valorem taxes) are expected to average $4.75 to $5.00 per BOE, based on today's
NYMEX strip prices for oil and natural gas. Depreciation, depletion and
amortization is expected to average $5.10 to $5.30 per BOE. Total exploration
and abandonment expense is expected to be $20 million to $35 million. General
and administrative expense is expected to be approximately $9 million. Interest
expense is expected to be $34 million to $35 million, including approximately $3
million of non-cash interest. The effective tax rate is expected to be
approximately 2% of pre-tax income as the Company benefits from the carryforward
of prior years' net operating losses in the U.S. and Canada. For the second
quarter of 2001, cost incurred is expected to range from $140 to $150 million.
Earnings Conference Call
On Thursday, April 26, 2001, at 9:00 a.m. Central, investors will have the
opportunity to listen to the first 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 approximately 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 (888) 850-2545 (confirmation code: 575261)
to listen to the conference call and view the accompanying visual presentation
at the Internet address above. A telephone replay will be available by dialing
(888) 203-1112-- confirmation code: 770881.
Pioneer is a large independent oil and gas exploration and production company
with operations in the United States, Canada, Argentina, South Africa and Gabon.
Pioneer's headquarters are in Dallas. For more information, visit Pioneer's
website at www.pioneernrc.com.
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.
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(Unaudited)
March 31, December 31,
2001 2000
---------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 18,305 $ 26,159
Accounts receivable 103,916 125,654
Inventories 12,965 14,842
Deferred income taxes 4,800 4,800
Other current assets 18,242 19,936
--------- ---------
Total current assets 158,228 191,391
--------- ---------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful
efforts method of accounting 3,504,678 3,417,094
Accumulated depletion, depreciation and
amortization (947,580) (902,139)
--------- ---------
2,557,098 2,514,955
--------- ---------
Deferred income taxes 85,200 84,400
Other assets, net 121,682 163,689
--------- ---------
$2,922,208 $2,954,435
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 112,597 $ 102,275
Interest payable 38,863 38,142
Other current liabilities 159,831 76,097
--------- ---------
Total current liabilities 311,291 216,514
--------- ---------
Long-term debt, less current maturities 1,550,230 1,578,776
Other noncurrent liabilities 194,615 225,740
Deferred income taxes 25,100 28,500
Stockholders' equity 840,972 904,905
--------- ---------
$2,922,208 $2,954,435
========= =========
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended
March 31,
----------------------
2001 2000
--------- ---------
Revenues:
Oil and gas $ 257,986 $ 174,375
Interest and other 5,167 3,755
Gain on disposition of assets, net 7,293 8,372
-------- --------
270,446 186,502
-------- --------
Costs and expenses:
Oil and gas production 55,802 43,122
Depletion, depreciation and amortization - oil
and gas 48,045 47,898
Depletion, depreciation and amortization - other 4,116 4,010
Exploration and abandonments 22,883 13,075
General and administrative 10,448 9,759
Interest 35,616 39,755
Other 25,217 14,413
-------- --------
202,127 172,032
-------- --------
Income before income taxes 68,319 14,470
Income tax (provision) benefit (400) 300
-------- --------
Net income $ 67,919 $ 14,770
======== ========
Net income per share:
Basic $ .69 $ .15
======== ========
Diluted $ .68 $ .15
======== ========
Weighted average basic shares outstanding 98,379 100,163
======== ========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended
March 31,
-----------------------
2001 2000
--------- ---------
Cash flows from operations:
Net income $ 67,919 $ 14,770
Depletion, depreciation and amortization 52,161 51,908
Exploration expenses, including dry holes 21,847 9,732
Deferred income taxes (4,800) (1,500)
Gain on disposition of assets, net (7,293) (8,372)
Interest related amortization 2,998 3,149
Derivative mark-to-market 8,753 13,487
Other noncash items 1,806 1,028
Changes in operating assets and liabilities:
Accounts receivable 26,449 (18,950)
Inventories 1,124 (190)
Other current assets (5,954) (649)
Accounts payable (25,607) (13,763)
Interest payable 720 (8,512)
Other current liabilities (8,389) 5,063
-------- --------
Net cash provided by operating activities 131,734 47,201
Net cash used in investing activities (88,801) (39,934)
Net cash used in financing activities (50,548) (8,912)
-------- --------
Net decrease in cash and cash equivalents (7,615) (1,645)
Effect of exchange rate changes on cash
and cash equivalents (239) (7)
Cash and cash equivalents, beginning
of period 26,159 34,788
-------- --------
Cash and cash equivalents, end of period $ 18,305 $ 33,136
======== ========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
Three months ended
March 31,
-----------------------
2001 2000
--------- ---------
Average Daily Production:
Oil (Bbls) - U.S. 24,651 25,802
Argentina 9,646 8,124
Canada 843 833
-------- --------
Total 35,140 34,759
Natural gas liquids (Bbls) - U.S. 18,922 21,438
Argentina 516 447
Canada 988 782
-------- --------
Total 20,426 22,667
Gas (Mcf) - U.S. 208,678 234,078
Argentina 80,035 84,962
Canada 43,973 40,168
-------- --------
Total 332,686 359,208
Total Production:
Oil (MBbls) 3,163 3,163
Natural gas liquids (MBbls) 1,838 2,063
Gas (MMcf) 29,942 32,688
Equivalent barrels (MBOE) 9,991 10,674
Average Price*:
Oil (per Bbl) - U.S. $ 25.25 $ 20.02
Argentina $ 24.59 $ 29.44
Canada $ 23.83 $ 29.12
Average $ 25.03 $ 22.44
Natural gas liquids (per Bbl) - U.S. $ 22.51 $ 18.86
Argentina $ 27.04 $ 19.41
Canada $ 24.33 $ 22.52
Average $ 22.71 $ 19.00
Gas (per Mcf) - U.S. $ 5.61 $ 2.29
Argentina $ 1.25 $ 1.11
Canada $ 5.81 $ 1.92
Average $ 4.58 $ 1.97
- ---------------
* Average prices include the effects of commodity hedges.
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
(in thousands)
(Unaudited)
Discretionary cash flow and EBITDAX (as defined below) are presented
herein because of their wide acceptance as financial indicators of a company's
ability to internally fund exploration and development activities and to service
or incur debt. Discretionary cash flow and EBITDAX should not be considered as
alternatives to net cash provided by operating activities, net income (loss) or
income (loss) from continuing operations, as defined by generally accepted
accounting principles. Discretionary cash flow and EBITDAX should also not be
considered as indicators of the Company's financial performance, as alternatives
to cash flow, as measures of liquidity or as being comparable to other similarly
titled measures of other companies.
Three months ended
March 31,
-----------------------
2001 2000
--------- ---------
Discretionary cash flows*:
Net income $ 67,919 $ 14,770
Depletion, depreciation and amortization 52,161 51,908
Exploration and abandonments 22,883 13,075
Deferred income taxes (4,800) (1,500)
Gain on disposition of assets, net (7,293) (8,372)
Interest related amortization 2,998 3,149
Derivative mark-to-market 8,753 13,487
Other noncash items 1,806 1,028
-------- --------
Discretionary cash flow $ 144,427 $ 87,545
======== ========
- -------------
* Discretionary cash flows equal cash flows from operations before working
capital changes and exploration and abandonments.
EBITDAX**:
Net income $ 67,919 $ 14,770
Depletion, depreciation and amortization 52,161 51,908
Exploration and abandonments 22,883 13,075
Consolidated interest expense 35,616 39,755
Consolidated income taxes 400 (300)
Gain on disposition of assets, net (7,293) (8,372)
Derivative mark-to-market 8,753 13,487
Other noncash expenses 867 1,038
-------- --------
$ 181,306 $ 125,361
======== ========
- -------------
** "EBITDAX" represents earnings before depletion, depreciation and
amortization expense; impairment of oil and gas properties; exploration and
abandonments; consolidated interest expense; consolidated income taxes; gain
or loss on the disposition of assets; extraordinary items; and, other
noncash expenses.