EXHIBIT 99.1
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Provides Update to First Quarter Outlook,
Argentina Developments and Hedging Program
Dallas, Texas, April 9, 2002 -- Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) (TSE:PXD) today updated its first quarter 2002 outlook based on
current expectations and partial quarter actual results, outlined recent
developments in Argentina and other areas of operation, and provided information
on the status of its hedging program.
First Quarter 2002 Outlook
The following statements are estimates based on current expectations. These
forward-looking statements are subject to a number of risks and uncertainties
that may cause the Company's actual results to differ materially from the
following statements. The last paragraph of this news release addresses certain
of the risks and uncertainties to which the Company is subject.
First quarter production is expected to average approximately 110 thousand
barrels per day on an oil equivalent basis. The Company's first quarter realized
price for oil, including the effects of hedges, is expected to average
approximately $22.40 to $22.60 per barrel. Pioneer's first quarter realized
price for natural gas liquids is expected to range from $10.60 to $10.80 per
barrel. The Company's first quarter realized price for gas, including the
effects of hedges, is expected to average approximately $2.40 to $2.60 per Mcf.
First quarter lease operating expenses (including production and ad valorem
taxes) are expected to average approximately $5.05 to $5.25 per BOE. Lease
operating expenses are higher than anticipated principally due to higher gas
prices, which impacted field fuel and production tax expense, and higher
workover expenditures related to production enhancement projects in Canada and
West Texas. Depreciation, depletion and amortization expense is expected to
range from $5.00 to $5.20 per BOE. Total exploration and abandonment expense is
expected to range from $20 million to $25 million. General and administrative
expense is expected to range from $11 million to $12 million. Interest expense
is expected to be approximately $26 million. Cash taxes for the first quarter
are expected to be approximately $1 million because the Company continues to
benefit from the carryforward of prior years' net operating losses in the U.S.
and Canada. Capital expenditures are expected to range from $105 million to $115
million.
Argentina Developments
Pioneer continues to monitor the political and economic environment in
Argentina, where 17% of its oil, natural gas liquids and gas reserves were held
as of December 31, 2001. During 2002, the government has continued to implement
reforms that are intended to stabilize the economy, including the imposition of
a 20% tax on oil exports beginning March 1, 2002. The Company anticipates that
it will resume oil drilling during the third quarter of 2002 as a result of
improved oil prices and reductions in drilling costs and lease operating
expenses. The Company's oil and gas revenues will be reduced as a result of the
Argentine peso devaluation and recent export tax; however, the reduction will be
mitigated by decreases in the cost of Argentine operations and administration as
a result of the peso devaluation.
The continuing devaluation of the Argentine peso during the first quarter of
2002 will result in a noncash charge to results in that period of approximately
$5 million to $7 million. The first quarter charge reflects the remeasurement of
the Company's peso-denominated monetary assets and liabilities to U.S. dollars
as of March 31, 2002. Once the exchange rate of Argentine pesos to U.S. dollars
stabilizes, the impact of future remeasurement assessments should be minimal.
For the first quarter of 2002, Pioneer's Argentine subsidiaries generated oil
and natural gas liquids revenues of approximately $15 million and gas revenues
of approximately $4 million. During the same three months, the Argentine
subsidiaries incurred approximately $4 million of operating costs and $2 million
of administrative expenses. During the first quarter of 2002, the Company has
exported approximately 75% of its Argentine oil production and approximately 15%
of its Argentine gas production.
Hedging Program
As a result of the recent increase in quoted future commodity prices, Pioneer
has aggressively hedged its oil and gas production for the second half of 2002
and oil production for 2003 to protect its cash flow and lock in favorable
returns on Pioneer's new production. For 2002, Pioneer has hedges covering
approximately 80% of expected North American gas production at an average NYMEX
equivalent price of $3.85 per Mcf or greater and approximately 65% of expected
worldwide oil production at an average NYMEX equivalent price of $25.00 per
barrel or greater. For 2003, Pioneer has oil hedges covering approximately 25%
of expected worldwide oil production at an average NYMEX equivalent price of
$24.10 per barrel. Pioneer's hedges are with a diverse group of intermediaries,
principally large U.S. banks, and are outlined in Item 9 of the Form 8-K filed
today with the Securities and Exchange Commission.
Other Press Releases
Pioneer also issued press releases today providing an update on exploration
activities and announcing acquisitions totaling $193 million in the West
Panhandle gas field in the Texas Panhandle and the Falcon field in the deepwater
Gulf of Mexico and announcing a public offering of 10 million shares of its
common stock.
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.
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, foreign currency valuation
changes, foreign government tax and regulation changes, 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.