EXHIBIT 99.1
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Reports First Quarter 2003 Results
Increases Production 16% over Prior Year Quarter
Dallas, Texas, April 29, 2003 -- Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) today announced financial and operating results for the quarter ended
March 31, 2003.
First Quarter Results
Pioneer reported net income of $84.2 million, or $0.71 per diluted share, for
the first quarter of 2003. Results included a $15.4 million, or $0.13 per share,
benefit from the cumulative effect of change in accounting principle related to
the adoption of Statement of Financial Accounting Standards No. 143, which
prescribes the accounting for future asset retirement obligations. For the same
period last year, Pioneer reported a net loss of $2.0 million, or $0.02 per
share, which included a noncash charge of $5.4 million, or $0.05 per share, for
the remeasurement of Argentine peso-denominated net monetary assets. Cash flow
from operations for the 2003 first quarter was $136.8 million compared to $50.0
million for the same period in 2002.
Total first quarter 2003 oil and gas sales increased 16% from the prior year
quarter to average 128,444 barrels per day (BPD) on a barrel oil equivalent
(BOE) basis. First quarter oil sales averaged 31,894 BPD and natural gas liquids
sales averaged 22,033 BPD. Gas sales in the first quarter averaged 447 million
cubic feet per day (MMcfpd). Realized prices for oil and natural gas liquids for
the first quarter were $25.82 and $22.00 per barrel, respectively. The realized
price for gas was $4.06 per thousand cubic feet (Mcf), and North American gas
prices averaged $4.68 per Mcf.
First quarter production costs of $5.54 per BOE were higher than anticipated
primarily due to start-up costs associated with the Canyon Express project.
Exploration and abandonment costs of $35.9 million for the quarter included
$10.4 million of geologic and geophysical expenses including seismic costs, $2.0
million of noncash leasehold abandonments including expired leases and $23.5
million of exploration costs.
For the same quarter last year, Pioneer reported oil sales of 34,541 BPD,
natural gas liquids sales of 21,539 BPD and gas sales of 328 MMcfpd. Realized
prices for the 2002 first quarter were $23.17 per barrel for oil, $10.73 per
barrel for natural gas liquids and $2.47 per Mcf for gas.
Scott D. Sheffield, Chairman and CEO stated, "We've had a strong start for 2003.
Our Canyon Express gas project has reached full production rates, we initiated
production from our operated Falcon field ahead of schedule and under budget and
announced a successful exploration well and development plan at Harrier, our
first Falcon satellite discovery. We also announced a discovery in Alaska and
are encouraged by the early evaluation work we've done to establish
commerciality."
"Our current daily production is up approximately 45% from 12 months ago with
just two of our five large projects on stream, and we look forward to first
production from the other three projects over the next 12 months. We are
evaluating several discoveries and have an active exploration program underway
to keep the pipeline of projects flowing at capacity."
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 2003 production is expected to average 150,000 to 165,000 BOEs
per day. Second quarter lease operating expenses (including production and ad
valorem taxes) are expected to average $4.85 to $5.15 per BOE based on today's
NYMEX strip prices for oil and gas. Depreciation, depletion and amortization is
expected to increase to $6.50 to $6.90 per BOE as a larger proportion of the
Company's production is derived from higher cost Gulf of Mexico fields. Total
exploration and abandonment expense is expected to be $25 million to $50
million, and general and administrative expense is expected to be approximately
$14 million. Interest expense is expected to be $24 million to $26 million and
income taxes are expected to be approximately $5 million, principally due to
income taxes in Argentina and minimal alternative minimum tax in the U.S. as the
Company benefits from the carryforward of net operating losses in the U.S. and
Canada.
The Company's oil and gas hedges are outlined on the attached schedule.
The range of expected daily production for the second quarter is expanded as a
result of the production variability inherent in bringing high volume, high
impact wells into an otherwise relatively stable production mix. Included in the
second quarter guidance is a reduction in net Falcon production volumes
reflecting the one-eighth royalty that becomes effective when the average NYMEX
gas price exceeds $4.10 per Mcf in any calendar year.
The Company is also widening the range of expected 2003 production to 55 to 60
million BOE to reflect the Falcon royalty and the heightened variability related
to high volume wells. The Falcon field is performing better than expected, and
the Harrier discovery has the potential for early start-up, while first sales
from the Sable field are now expected in the third quarter. With a full year of
production from new fields brought on in 2003 and the addition of at least two
large fields in late 2003 or early 2004, the Company expects 2004 production to
range from 63 to 75 million BOE.
Earnings Conference Call
This morning at 10:00 a.m. Eastern, 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 'INVESTOR' at the top of the page and then choose
'Webcasts/Earnings Calls'. To listen to the live call, please go to the website
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) 946-0712
(confirmation code: 245690) 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: 245690.
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 News
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, environmental and weather risks, acts of war or
terrorism. 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 SHEET
(in thousands)
(Unaudited)
March 31, December 31,
2003 2002
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 6,858 $ 8,490
Accounts receivable 125,836 98,222
Inventories 10,951 10,648
Deferred income taxes 14,400 13,900
Other current assets 26,500 15,833
---------- ----------
Total current assets 184,545 147,093
---------- ----------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful efforts
method of accounting 4,740,783 4,471,970
Accumulated depletion, depreciation and amortization (1,346,096) (1,303,541)
---------- ----------
3,394,687 3,168,429
---------- ----------
Deferred income taxes 76,449 76,840
Other assets, net 66,726 62,754
---------- ----------
$ 3,722,407 $ 3,455,116
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 161,098 $ 124,774
Interest payable 37,980 37,458
Income taxes payable 1,452 -
Other current liabilities 155,938 112,360
---------- ----------
Total current liabilities 356,468 274,592
---------- ----------
Long-term debt 1,767,650 1,668,536
Other noncurrent liabilities 174,445 128,331
Deferred income taxes 11,889 8,760
Stockholders' equity 1,411,955 1,374,897
---------- ----------
$ 3,722,407 $ 3,455,116
========== ==========
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended
March 31
-------------------------
2003 2002
---------- ----------
Revenues and other income:
Oil and gas $ 281,156 $ 165,539
Interest and other 2,713 1,193
Gain (loss) on disposition of assets, net 1,426 (74)
--------- ---------
285,295 166,658
--------- ---------
Costs and expenses:
Oil and gas production 64,024 51,018
Depletion, depreciation and amortization - oil and gas 67,735 48,237
Depletion, depreciation and amortization - other 2,314 2,151
Exploration and abandonments 35,867 21,120
General and administrative 15,481 11,918
Accretion of discount on asset retirement obligations 1,094 -
Interest 22,491 26,317
Other 5,178 8,266
--------- ---------
214,184 169,027
--------- ---------
Income (loss) before income taxes and cumulative effect of
change in accounting principle 71,111 (2,369)
Income tax (provision) benefit (2,304) 410
--------- ---------
Income (loss) before cumulative effect of change in accounting
principle 68,807 (1,959)
Cumulative effect of change in accounting principle, net of tax 15,413 -
--------- ---------
Net income (loss) $ 84,220 $ (1,959)
========= =========
Net income (loss) per share:
Basic:
Income (loss) before cumulative effect of change in
accounting principle $ .59 $ (.02)
Cumulative effect of change in accounting principle,
net of tax .13 -
--------- ---------
Net income (loss) $ .72 $ (.02)
========= =========
Diluted:
Income (loss) before cumulative effect of change in
accounting principle $ .58 $ (.02)
Cumulative effect of change in accounting principle,
net of tax .13 -
--------- ---------
Net income (loss) $ .71 $ (.02)
========= =========
Weighted average shares outstanding:
Basic 116,743 104,055
========= =========
Diluted 118,675 104,055
========= =========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended
March 31,
-------------------------
2003 2002
---------- ----------
Cash flows from operations:
Net income (loss) $ 84,220 $ (1,959)
Depletion, depreciation and amortization 70,049 50,388
Exploration expenses, including dry holes 30,263 18,666
Deferred income taxes 254 (684)
(Gain) loss on disposition of assets, net (1,426) 74
Accretion of discount on asset retirement obligations 1,094 -
Interest related amortization (4,565) (992)
Commodity hedge related amortization (17,782) 6,680
Cumulative effect of change in accounting principle,
net of tax (15,413) -
Other noncash items 4,733 6,304
Changes in operating assets and liabilities:
Accounts receivable (25,967) (13,721)
Inventories (360) 2,239
Other current assets (7,824) (7)
Accounts payable 8,381 (14,456)
Interest payable 522 (295)
Income taxes payable 1,452 -
Other current liabilities 9,158 (2,201)
--------- ---------
Net cash provided by operating activities 136,789 50,036
Net cash used in investing activities (239,481) (38,772)
Net cash provided by (used in) financing activities 100,594 (8,065)
--------- ---------
Net increase (decrease) in cash and cash equivalents (2,098) 3,199
Effect of exchange rate changes on cash
and cash equivalents 466 (776)
Cash and cash equivalents, beginning
of period 8,490 14,334
--------- ---------
Cash and cash equivalents, end of period $ 6,858 $ 16,757
========= =========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
Three months ended
March 31,
------------------------
2003 2002
--------- ----------
Average Daily Production:
Oil (Bbls) - U.S. 24,086 24,305
Argentina 7,673 10,126
Canada 135 110
--------- ---------
Total 31,894 34,541
Natural gas liquids (Bbls) - U.S. 20,024 19,919
Argentina 1,130 642
Canada 879 978
--------- ---------
Total 22,033 21,539
Gas (Mcf) - U.S. 339,598 215,837
Argentina 66,633 65,119
Canada 40,876 46,780
--------- ---------
Total 447,107 327,736
Total Production:
Oil (MBbls) 2,870 3,109
Natural gas liquids (MBbls) 1,983 1,939
Gas (MMcf) 40,240 29,496
Equivalent barrels (MBOE) 11,560 9,963
Average Price*:
Oil (per Bbl) - U.S. $ 25.85 $ 24.27
Argentina $ 25.61 $ 20.61
Canada $ 31.81 $ 17.55
Average $ 25.82 $ 23.17
Natural gas liquids (per Bbl) - U.S. $ 21.63 $ 10.70
Argentina $ 24.27 $ 8.97
Canada $ 27.51 $ 12.41
Average $ 22.00 $ 10.73
Gas (per Mcf) - U.S. $ 4.72 $ 3.05
Argentina $ .54 $ .68
Canada $ 4.34 $ 2.27
Average $ 4.06 $ 2.47
<FN>
- ---------------
* Average prices include the effects of commodity hedges.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
(in thousands)
(Unaudited)
EBITDA and discretionary cash flow (as defined below) are presented herein,
and reconciled to the generally accepted accounting principle ("GAAP") measure
of net cash provided by operating activities, 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. EBITDA and
discretionary cash flow 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 GAAP. EBITDA and discretionary cash flow
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,
-------------------------
2003 2002
---------- ----------
Net income (loss) $ 84,220 $ (1,959)
Depletion, depreciation and amortization 70,049 50,388
Exploration and abandonments 35,867 21,120
Accretion of discount on asset retirement obligations 1,094 -
Interest expense 22,491 26,317
Income taxes 2,304 (410)
(Gain) loss on disposition of assets, net (1,426) 74
Commodity hedge related amortization (17,782) 6,680
Cumulative effect of change in accounting principle,
net of tax (15,413) -
Other noncash items 4,733 6,304
--------- ---------
EBITDA * 186,137 108,514
Less: Cash interest expense (27,056) (27,309)
Current income taxes (2,050) (274)
--------- ---------
Discretionary cash flow ** 157,031 80,931
Less: Cash operating exploration expense (5,604) (2,454)
Changes in operating assets and liabilities (14,638) (28,441)
--------- ---------
Net cash provided by operating activities $ 136,789 $ 50,036
========= =========
<FN>
- -------------
* "EBITDA" represents earnings before depletion, depreciation and
amortization expense; impairment of oil and gas properties; exploration and
abandonments; interest expense and accretion of discounts; income taxes;
gain or loss on the disposition of assets; commodity hedge related
amortization; cumulative effect of change in accounting principle; and,
other noncash items.
** Discretionary cash flows equal cash flows from operations before working
capital changes and before exploration and abandonments.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL HEDGE INFORMATION
As of April 23, 2003
Open Oil Hedge Positions
------------------------
2003
---------------------------
Second Third Fourth
Quarter Quarter Quarter 2004 2005
------- ------- ------- ------- -------
Daily oil production:
Swap Contracts:
Volume (Bbl) 21,659 18,043 14,000 9,000 5,000
NYMEX price $ 24.84 $ 24.43 $ 24.35 $ 22.96 $ 24.00
Open Gas Hedge Positions
------------------------
2003
-----------------------------
Second Third Fourth 2006 &
Quarter Quarter Quarter 2004 2005 2007
-------- -------- -------- -------- -------- --------
Daily gas production:
Swap Contracts:
Volume (Mcf) 230,000 230,000 230,000 230,000 60,000 20,000
NYMEX price* (MMBtu) $ 3.85 $ 3.85 $ 3.85 $ 4.05 $ 4.20 $ 3.75
Collar Contracts:
Volume (Mcf) - - - 45,000 - -
NYMEX price* (MMBtu):
Ceiling - - - $ 6.80 - -
Floor - - - $ 4.00 - -
Deferred Gains (Losses) on Terminated Hedges (in thousands)
-----------------------------------------------------------
2003
------------------------------
Second Third Fourth
Quarter Quarter Quarter 2004 2005 Thereafter
-------- -------- -------- -------- -------- ----------
Commodity hedge gains** $ 18,167 $ 17,807 $ 17,136 $ 43,865 $ 1,249 $ -
Debt hedge gains (losses)*** 5,540 4,700 4,131 11,113 4,196 (145)
------- ------- ------- ------- ------- ------
Total deferred gains
(losses) $ 23,707 $ 22,507 $ 21,267 $ 54,978 $ 5,445 $ (145)
======= ======= ======= ======= ======= =======
<FN>
- ---------------
* Approximate, based on historical differentials to index prices.
** Deferred commodity hedge gains will be amortized as increases to oil and
gas revenues during the indicated future periods.
*** Deferred debt hedge gains will be amortized as decreases to interest
expense during the indicated future periods and deferred debt hedge losses
will be amortized as increases to interest expense during the indicated
future periods.
</FN>