EXHIBIT 99.1
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Reports Second Quarter 2001 Results
Dallas, Texas, July 27, 2001 -- Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) (TSE:PXD) today announced financial and operating results for the
second quarter of 2001.
Second Quarter Results
Pioneer reported net income of $28.3 million, or $0.28 per share on a diluted
basis, for the second quarter of 2001. Second quarter net income included a $1.5
million gain on the disposition of assets and a $9.3 million mark-to-market gain
primarily related to derivatives not treated as hedges. Earnings as adjusted for
the above items were $17.6 million or $0.18 per share. For the same period last
year, Pioneer reported a net loss of $16.1 million or $0.16 per share. Cash flow
from operations for the second quarter of 2001 was $135.3 million compared to
$122.2 million for the second quarter of 2000.
Scott D. Sheffield, Chairman and CEO stated, "We are pleased with our
accomplishments during the second quarter. We increased production 6% over the
prior quarter, sanctioned two high-impact development projects, completed five
successful exploration wells, and continued an aggressive hedging program to
lock in returns and protect cash flow. We plan to drill three key exploration
wells during the second half of the year and continue to move ahead with the
development of Canyon Express, Devils Tower and Sable to achieve our targets for
production growth in 2002 and 2003."
Second quarter oil sales averaged 34,482 barrels per day (BPD) and natural gas
liquid sales averaged 21,546 BPD. Natural gas sales in the second quarter
averaged 366 million cubic feet per day (MMcfpd). On a barrel oil equivalent
(BOE) basis, total sales averaged 117,047 BPD. Realized prices for oil and
natural gas liquids for the second quarter were $24.74 and $19.29 per barrel,
respectively. The realized price for natural gas was $3.10 per thousand cubic
feet (Mcf).
Second quarter production costs averaged $4.88 per BOE, a $0.71 per BOE decrease
compared to the first quarter. The decrease primarily resulted from reductions
in field fuel costs and production taxes due to lower gas prices. Exploration
and abandonment costs of $46.6 million for the quarter included $16.0 million of
geologic and geophysical expenses including seismic costs, $2.2 million of
non-cash leasehold abandonments including expired leases, and $28.4 million of
exploration costs. More exploratory wells were drilled during the quarter than
were originally scheduled, causing total exploration and abandonment costs to
exceed forecasts for the quarter. Several wells were drilled earlier than
originally scheduled, and one unscheduled well was drilled in Tunisia. As a
result of the accelerated schedule, fewer wells will be drilled during the last
half of the year reducing potential exploration and abandonment costs.
For the same quarter last year, Pioneer reported oil sales of 33,404 BPD,
natural gas liquids sales of 23,520 BPD and natural gas sales of 381 MMcfpd.
Realized prices for the 2000 second quarter were $22.59 per barrel for oil,
$18.37 per barrel for natural gas liquids and $2.60 per Mcf for natural gas.
Six Month Results
For the six months ended June 30, 2001, Pioneer reported net income of $96.3
million, or $0.97 per share on a diluted basis. Excluding a gain of $8.8 million
on the disposition of assets and a $.5 million mark-to-market gain primarily
related to derivatives not treated as hedges, profits as adjusted were $87.0
million or $0.87 per share. For the same period last year, Pioneer reported a
net loss of $1.3 million, or $0.01 per share. Cash flow from operations for the
six- month period was $267.1 million compared to $169.4 million for the same
period in 2000.
Six-month oil sales averaged 34,809 BPD and natural gas liquids sales were
20,989 BPD. Natural gas sales were 349 MMcfpd. On a BOE basis, total sales
averaged 114,047 BPD. Six-month realized price for oil increased from the prior
year period to $24.89 per barrel. Realized price for natural gas liquids was
$20.94 per barrel. Realized price for natural gas was $3.80 per Mcf. For the
first half of 2000, Pioneer reported oil sales of 34,082 BPD, natural gas
liquids sales of 23,093 BPD and natural gas sales of 370 MMcfpd. Realized prices
for the 2000 six-month period were $22.51 per barrel for oil, $18.68 per barrel
for natural gas liquids and $2.29 per Mcf for natural gas.
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.
Third quarter production is expected to average 117 to 120 MBPD on an oil
equivalent basis. Third quarter lease operating expenses (including production
and ad valorem taxes) are expected to average $4.60 to $4.80 per BOE based on
today's NYMEX strip prices for oil and natural gas. Depreciation, depletion and
amortization is expected to average $5.30 to $5.60 per BOE. Total exploration
and abandonment expense is expected to be $15 million to $35 million. Three Gulf
of Mexico exploration wells are scheduled during the third quarter on the Malta
and Ozona Deep prospects and an appraisal well on the Stirrup discovery. 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 5% 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 third
quarter of 2001, cost incurred is expected to range from $115 million to $125
million.
The Company has oil and natural gas hedges that will impact third quarter and
future period realizations. These hedges are summarized in the attached
schedules.
Earnings Conference Call
On Friday, July 27, 2001, at 9:00 a.m. Central, investors will have the
opportunity to listen to the second 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 (800) 314-7867
(confirmation code: 424086) 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: 424086.
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.
Financial statements and schedules 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 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.
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
June 30, December 31,
2001 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 18,227 $ 26,159
Accounts receivable 102,682 125,654
Inventories 15,068 14,842
Deferred income taxes 5,600 4,800
Other current assets 59,642 19,936
---------- ----------
Total current assets 201,219 191,391
---------- ----------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful
efforts method of accounting 3,611,183 3,417,094
Accumulated depletion, depreciation
and amortization (1,003,926) (902,139)
---------- ----------
2,607,257 2,514,955
---------- ----------
Deferred income taxes 83,611 84,400
Other assets, net 169,967 163,689
---------- ----------
$ 3,062,054 $ 2,954,435
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 116,246 $ 102,275
Interest payable 39,056 38,142
Other current liabilities 91,382 76,097
---------- ----------
Total current liabilities 246,684 216,514
---------- ----------
Long-term debt, less current maturities 1,572,227 1,578,776
Other noncurrent liabilities 179,656 225,740
Deferred income taxes 24,485 28,500
Stockholders' equity 1,039,002 904,905
---------- ----------
$ 3,062,054 $ 2,954,435
========== ==========
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ---------------------
2001 2000 2001 2000
--------- ---------- --------- ---------
Revenues:
Oil and gas $ 218,611 $ 197,947 $ 476,597 $ 372,322
Interest and other 10,955 5,186 16,122 8,941
Gain (loss) on disposition of assets, net 1,472 (4,779) 8,765 3,593
-------- -------- -------- --------
231,038 198,354 501,484 384,856
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 51,974 43,140 107,776 86,262
Depletion, depreciation and amortization -
oil and gas 54,025 49,713 102,070 97,611
Depletion, depreciation and amortization -
other 3,371 3,836 7,487 7,846
Exploration and abandonments 46,583 27,696 69,466 40,771
General and administrative 8,005 6,963 18,453 16,722
Interest 34,260 41,863 69,876 81,618
Other 1,874 30,486 27,091 44,899
-------- -------- -------- --------
200,092 203,697 402,219 375,729
-------- -------- -------- --------
Income (loss) before income taxes and
extraordinary item 30,946 (5,343) 99,265 9,127
Income tax (provision) benefit (2,608) 1,600 (3,008) 1,900
-------- -------- -------- --------
Income (loss) before extraordinary item 28,338 (3,743) 96,257 11,027
Extraordinary item - loss on early extinguishment
of debt, net of tax - (12,318) - (12,318)
-------- -------- -------- --------
Net income (loss) $ 28,338 $ (16,061) $ 96,257 $ (1,291)
======== ========= ======== ========
Net income (loss) per share:
Basic:
Income (loss) before extraordinary item $ .29 $ (.04) $ .98 $ .11
Extraordinary item - (.12) - (.12)
-------- -------- -------- --------
Net income (loss) $ .29 $ (.16) $ .98 $ (.01)
======== ========= ======== ========
Diluted:
Income (loss) before extraordinary item $ .28 $ (.04) $ .97 $ .11
Extraordinary item - (.12) - (.12)
-------- -------- -------- --------
Net income (loss) $ .28 $ (.16) $ .97 $ (.01)
======== ========= ======== ========
Weighted average shares outstanding:
Basic 98,337 99,683 98,358 99,923
======== ======== ======== ========
Diluted 99,700 100,092 99,709 100,187
======== ======== ======== ========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Cash flows from operations:
Net income (loss) $ 28,338 $ (16,061) $ 96,257 $ (1,291)
Depletion, depreciation and amortization 57,396 53,549 109,557 105,457
Exploration and abandonments 40,985 20,320 62,832 30,052
Deferred income taxes 138 (2,400) (4,662) (3,900)
(Gain) loss on disposition of assets, net (1,472) 4,779 (8,765) (3,593)
Interest related amortization 2,889 3,239 5,887 6,388
Derivative mark-to-market (9,278) 28,471 (525) 41,958
Extraordinary item - loss on early
extinguishment of debt - 12,318 - 12,318
Other noncash items 1,946 902 3,752 1,930
Changes in operating assets and liabilities:
Accounts receivable 1,605 19,857 28,054 907
Inventories (2,036) (2,130) (912) (2,320)
Other current assets 922 2,644 (5,032) 1,995
Accounts payable 6,750 (697) (18,857) (14,460)
Interest payable 194 10,724 914 2,212
Other current liabilities 6,953 (13,350) (1,436) (8,287)
-------- -------- -------- --------
Net cash provided by operating activities 135,330 122,165 267,064 169,366
Net cash used in investing activities (138,689) (42,921) (227,490) (82,855)
Net cash provided by (used in) financing activities 3,184 (74,024) (47,364) (82,936)
-------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents (175) 5,220 (7,790) 3,575
Effect of exchange rate changes on cash
and cash equivalents 97 (87) (142) (94)
Cash and cash equivalents, beginning
of period 18,305 33,136 26,159 34,788
-------- -------- -------- --------
Cash and cash equivalents, end of period $ 18,227 $ 38,269 $ 18,227 $ 38,269
======== ======== ======== ========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Average Daily Production:
Oil (Bbls) - U.S. 23,913 24,300 24,279 25,051
Argentina 9,727 8,317 9,687 8,221
Canada 842 787 843 810
--------- --------- --------- ---------
Total 34,482 33,404 34,809 34,082
Natural gas liquids (Bbls) - U.S. 19,968 21,988 19,447 21,712
Argentina 569 557 543 502
Canada 1,009 975 999 879
--------- --------- --------- ---------
Total 21,546 23,520 20,989 23,093
Gas (Mcf) - U.S. 214,351 229,520 211,530 231,798
Argentina 98,934 104,473 89,536 94,718
Canada 52,831 47,497 48,427 43,833
--------- --------- --------- ---------
Total 366,116 381,490 349,493 370,349
Total Production:
Oil (MBbls) 3,138 3,040 6,300 6,203
Natural gas liquids (MBbls) 1,961 2,140 3,799 4,203
Gas (MMcf) 33,316 34,716 63,258 67,403
Equivalent barrels (MBOE) 10,651 10,966 20,642 21,640
Average Price*:
Oil (per Bbl) - U.S. $ 24.39 $ 20.86 $ 24.82 $ 20.43
Argentina $ 25.68 $ 27.38 $ 25.14 $ 28.40
Canada $ 23.88 $ 25.35 $ 23.85 $ 27.28
Average $ 24.74 $ 22.59 $ 24.89 $ 22.51
Natural gas liquids (per Bbl) - U.S. $ 18.78 $ 18.12 $ 20.59 $ 18.48
Argentina $ 22.60 $ 23.58 $ 24.70 $ 21.72
Canada $ 27.34 $ 20.99 $ 25.86 $ 21.67
Average $ 19.29 $ 18.37 $ 20.94 $ 18.68
Gas (per Mcf) - U.S. $ 3.93 $ 3.24 $ 4.75 $ 2.76
Argentina $ 1.34 $ 1.20 $ 1.30 $ 1.16
Canada $ 3.03 $ 2.55 $ 4.29 $ 2.26
Average $ 3.10 $ 2.60 $ 3.80 $ 2.29
* 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 Six months ended
June 30, June 30,
--------------------- ---------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Discretionary cash flows*:
Net income (loss) $ 28,338 $ (16,061) $ 96,257 $ (1,291)
Depletion, depreciation and amortization 57,396 53,549 109,557 105,457
Exploration and abandonments 46,583 27,696 69,466 40,771
Deferred income taxes 138 (2,400) (4,662) (3,900)
(Gain) loss on disposition of assets, net (1,472) 4,779 (8,765) (3,593)
Interest related amortization 2,889 3,239 5,887 6,388
Derivative mark-to-market (9,278) 28,471 (525) 41,958
Extraordinary item - loss on early
extinguishment of debt - 12,318 - 12,318
Other noncash items 1,946 902 3,752 1,930
--------- -------- -------- --------
Discretionary cash flow $ 126,540 $ 112,493 $ 270,967 $ 200,038
======== ======== ======== ========
- -------------
* Discretionary cash flows equal cash flows from operations before working
capital changes and exploration and abandonments.
EBITDAX**:
Net income (loss) $ 28,338 $ (16,061) $ 96,257 $ (1,291)
Depletion, depreciation and amortization 57,396 53,549 109,557 105,457
Exploration and abandonments 46,583 27,696 69,466 40,771
Consolidated interest expense 34,260 41,863 69,876 81,618
Consolidated income taxes 2,608 (1,600) 3,008 (1,900)
(Gain) loss on disposition of assets, net (1,472) 4,779 (8,765) (3,593)
Derivative mark-to-market (9,278) 28,471 (525) 41,958
Extraordinary item - loss on early
extinguishment of debt - 12,318 - 12,318
Other noncash expenses 652 1,086 1,519 2,126
-------- -------- -------- --------
$ 159,087 $ 152,101 $ 340,393 $ 277,464
======== ======== ======== ========
- -------------
** "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.
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
Hedge Positions - Oil*
2001 2002 2003
----------------------------- ----------------------------- -------------
First &
Third Fourth First Second Second
Quarter Quarter Quarter Quarter Quarters
------------- ------------- ------------- ------------- -------------
Daily oil production:
Swaps:
Volume (Bbl) ................... 25,033 16,641 10,000 6,000
NYMEX price ................... $ 28.75 $ 28.37 $ 27.20 $ 24.02
Collars:
Volume (Bbl) ................... 2,000 2,000 10,000 10,000
NYMEX price ................... $25.00-$31.43 $25.00-$31.43 $25.00-$28.56 $25.00-$28.56
Total Oil - % Hedged............. 74% 48% 56% 28% 11%
Hedge Positions - Gas*
2001 2002 2003 2004
----------------------------- ------------- ------------- -------------
Third Fourth
Quarter Quarter
------------- -------------
Daily gas production:
Swaps:
New Volume (Mcf)................. 75,000 71,685 142,500 180,000 190,000
NYMEX Price (MMBtu).............. $ 5.50 $ 5.65 $ 4.35 $ 4.00 $ 4.00
Existing Volume (Mcf)............ 49,223 49,223
NYMEX Price** (MMBtu)............ $ 2.50 $ 2.50
Collars:
New Volume (Mcf)................. 20,000
NYMEX Price** (MMBtu)............ $ 4.50-$6.00
Existing Volume (Mcf)............ 54,482 54,482
NYMEX Price** (MMBtu)............ $ 2.25-$2.90 $ 2.25-$2.90
N. Amer. Gas - % Hedged.......... 66% 66% 52% 48% 52%
* Hedge positions are as of July 26, 2001.
**Approximate, based on historical differentials to index prices.