EXHIBIT 99.1
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Increases North American Gas Production 39%,
Provides Update on Project Timing and Second Quarter
Dallas, Texas, July 17, 2003 -- Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) today announced that the Company set a new record for quarterly gas
production from North America with approximately 48 billion cubic feet of gas
produced during the second quarter, a 39% increase over the first quarter of
2003. Production from its Canyon Express and Falcon deepwater Gulf of Mexico gas
projects met expectations putting the quarter's worldwide oil and gas production
at approximately 14.5 million barrels oil equivalent. Pioneer also provided an
update on its three other large projects under development.
First production from Sable, an oil field development offshore South Africa, is
now expected in August. The owner of the floating production facility being
leased by Pioneer and partners to handle Sable field production encountered
unexpected problems with the new compression equipment installed on the facility
requiring extensive reconditioning. Oil sales are expected by late in the third
quarter as soon as sufficient inventory has been built to offload oil for the
first shuttle delivery to onshore facilities.
Development of the Harrier field, a Falcon satellite in the deepwater Gulf of
Mexico, is progressing on schedule for first production in early 2004. Well
completion activities are scheduled to begin in August, and Pioneer plans to
drill two additional satellite prospects, Tomahawk and Raptor, under the same
rig contract. The Devils Tower project, an oil and gas development also in the
deepwater Gulf of Mexico, is on schedule for start-up during the first quarter
of 2004. Both projects were impacted by recent severe weather and strong
currents in the Gulf of Mexico without requiring meaningful schedule changes.
However, future weather-related delays, if extensive, may result in unavoidable
schedule changes.
As a result of this week's severe weather in the western Gulf of Mexico, Pioneer
evacuated employees from several shallow-water platforms, but, with production
from these fields averaging less than 1,000 barrels oil equivalent per day, the
Company expects minimal impact on total production. The deepwater Falcon gas
field was shut-in just before midnight on Monday and production was
reestablished early this morning. The impact, while not material, will be
included in third quarter production guidance expected to be issued later this
month.
Second Quarter Guidance Update
Pioneer today updated its second quarter 2003 outlook based on current
expectations and partial quarter actual results. 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.
The Company's second quarter realized price for oil, including the effects of
hedges, is expected to average approximately $24.20 to $24.30 per barrel.
Pioneer's second quarter realized price for natural gas liquids is expected to
range from $17.85 to $17.95 per barrel. The Company's second quarter realized
price for gas, including the effects of hedges, is expected to average
approximately $4.05 to $4.15 per thousand cubic feet. Second quarter lease
operating expenses (including production and ad valorem taxes) are expected to
average approximately $4.75 to $4.85 per barrel oil equivalent (BOE). General
and administrative expense is expected to be approximately $14 million. Interest
expense and accretion of discount on asset retirement obligations are expected
to total approximately $25 million. Tax expense for the second quarter is
expected to be no more than $4 million as the Company continues to benefit from
the carryforward of prior years' net operating losses in the U.S. and Canada.
Second quarter depreciation, depletion and amortization (DD&A) is expected to
average approximately $6.90 to $7.00 per BOE. DD&A is higher than anticipated as
a result of the reclassification of a portion of the proved reserves in the
Aconcagua field from proved developed reserves to proved undeveloped reserves.
While production from the Aconcagua field has met expectations and total proved
reserves are unchanged, Pioneer believes that recent well pressure data
indicates that a future sidetrack will likely be required to fully produce the
proved gas reserves. Depletion of intangible drilling and equipment costs
increased given that it is calculated on the unit of production method based on
only proved developed reserves.
Second quarter exploration and abandonment expense is expected to be
approximately $47 million including $18 million of seismic and other geological
and geophysical costs covering prospective areas for potential future
exploration activities. Exploration and abandonment expense also includes
charges related to three unsuccessful wells in South Africa and two unsuccessful
Gulf of Mexico shelf wells. Pioneer expects to discuss the results of other
exploration drilling, including preliminary results in Tunisia, later this
month.
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
Document 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.