EXHIBIT 99.1
NEWS RELEASE
Investor Relations Contact: Susan Spratlen (972) 444-9001
Pioneer Announces Debt Exchange Offers and Consent Solicitation
Dallas, Texas, June 10, 2004 -- Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) today announced that it has commenced offers to exchange (the
"Exchange Offers") any and all of three series of its outstanding senior notes
for a new series of Senior Notes due 2016 (the "New Notes") and cash. In
connection with the Exchange Offers, Pioneer is soliciting consents to proposed
amendments to the supplemental indentures governing two of the series of its
outstanding senior notes. To encourage holders to tender early, Pioneer is
offering an early exchange payment to holders who validly tender their old notes
before 5:00 p.m., New York City time, on Thursday, June 24, 2004 (the "Early
Exchange Date"). The Exchange Offers expire at 12:00 midnight, New York City
time, on Friday, July 9, 2004 (the "Expiration Date").
Timothy L. Dove, Executive Vice President and Chief Financial Officer, stated,
"This debt exchange is expected to establish a new benchmark investment grade
12-year senior note with an attractive coupon and at a low issuance cost to
Pioneer, while retiring a portion of our existing higher coupon notes. Our
liquidity is enhanced by extending the debt maturities, and we significantly
reduce our annual cash interest costs."
Pioneer is offering to exchange any and all of its $150,000,000 aggregate
principal amount of outstanding 8 1/4% Senior Notes due 2007 (CUSIP No. 701018
AB 9) (the "8 1/4% Notes"), its $339,169,000 aggregate principal amount of
outstanding 9-5/8% Senior Notes due April 1, 2010 (CUSIP No. 723787 AC 1)(the
"9-5/8% Notes"), and its $150,000,000 aggregate principal amount of outstanding
7.50% Senior Notes due 2012 (CUSIP No. 723787 AD 9) (the "7.50% Notes," and
together with the 8 1/4% Notes and the 9-5/8% Notes, the "Old Notes"), for a
like principal amount of New Notes and cash that, together with the principal
amount of the New Notes, equals the early exchange price in the case of Old
Notes validly tendered before the Early Exchange Date and not validly withdrawn,
and equals the exchange price in the case of Old Notes tendered after the Early
Exchange Date and before the Expiration Date. The early exchange price and the
exchange price for each series of Old Notes are based on fixed-spread pricing
formulas. Pioneer will also pay accrued and unpaid interest on the Old Notes
accepted in the Exchange Offers to, but not including, the applicable settlement
date minus, in the case of the final settlement date, accrued and unpaid
interest on the New Notes to, but not including, the final settlement date.
Pioneer has the right in its sole discretion to amend, extend or terminate the
Exchange Offers with respect to each series of Old Notes and to extend the Early
Exchange Date and the Expiration Date.
In connection with the Exchange Offers for the 9-5/8% Notes and the 7.50% Notes,
Pioneer is soliciting consents to proposed amendments to the supplemental
indentures governing the 9-5/8% Notes and the 7.50% Notes. The proposed
amendments will permanently remove substantially all of the operating
restrictions with respect to these notes. These restrictions currently do not
apply to Pioneer because these notes have investment grade ratings. Holders
tendering their 9-5/8% Notes and 7.50% Notes will be deemed to have delivered a
consent to the proposed amendments. Pioneer will make no separate payment for
consents delivered in the consent solicitation.
To encourage holders to tender early, holders who validly tender their Old Notes
before the Early Exchange Date will be entitled to an early exchange payment in
cash as part of the early exchange price for their Old Notes. The early exchange
payment for holders who validly tender before the Early Exchange Date will equal
$6.50 per $1,000 principal amount of the 8 1/4% Notes, $10.00 per $1,000
principal amount of the 9-5/8% Notes and $10.00 per $1,000 principal amount of
the 7.50% Notes.
The New Notes will mature on July 1, 2016 and will bear interest from the early
settlement date (Thursday, July 1, 2004) at a rate per annum equal to the sum of
(a) the yield on the 4.75% U.S. Treasury Note due May 15, 2014 as of 2:00 p.m.,
New York City time, on the second business day before the Early Exchange Date,
plus (b) 1.40%. The New Notes will be unsecured senior obligations of Pioneer
and will rank equally with all of Pioneer's other unsecured senior indebtedness.
Early Exchange Price for Old Notes Tendered Before the Early Exchange Date
The early exchange price for each $1,000 principal amount of each series of Old
Notes validly tendered before the Early Exchange Date will be calculated as of
2:00 p.m., New York City time, on the second business day before the Early
Exchange Date by discounting to the early settlement date (Thursday, July 1,
2004), the remaining payments of principal and interest on $1,000 principal
amount of the series of Old Notes through its maturity date at a discount rate
equal to (a) the applicable fixed spread listed in the table below plus (b) the
bid-side yield on the applicable reference U.S. Treasury Security listed in the
table below. To that discounted amount will be added the early exchange payment,
minus accrued and unpaid interest on the Old Notes to, but not including, the
early settlement date. The early exchange price will be paid only to holders who
validly tender their Old Notes before the Early Exchange Date and do not validly
withdraw their tenders.
Early Exchange
Reference Fixed Spread
Series U.S. Treasury Security (in basis points)
------------ -------------------------- -----------------
8 1/4% Notes 3.125% due May 15, 2007 +85
9-5/8% Notes 6.5% due February 15, 2010 +100
7.50% Notes 4.75% due May 15, 2014 +80
The portion of the early exchange price for each series of Old Notes that is in
excess of $1,000, plus accrued and unpaid interest on the Old Notes to, but not
including, the early settlement date, will be paid in cash on the early
settlement date with respect to Old Notes of that series that have been tendered
and accepted. The remainder of the early exchange price will be paid through the
issuance of $1,000 principal amount of New Notes for each $1,000 principal
amount of Old Notes accepted for exchange.
Exchange Price for Old Notes Tendered After the Early Exchange Date
The exchange price for each series of Old Notes validly tendered after the Early
Exchange Date and before the Expiration Date will be calculated as of 2:00 p.m.,
New York City time, on the second business day before the Expiration Date by
discounting to the final settlement date (Wednesday, July 14, 2004), the
remaining payments of principal and interest on $1,000 principal amount of the
series of Old Notes through its maturity date at a discount rate equal to (a)
the applicable fixed spread listed in the table below, plus (b) the bid-side
yield on the applicable reference U.S. Treasury Security listed in the table
below. This discounted amount will also be adjusted by the change in price of
the New Notes. The change in price of the New Notes will be calculated as of
2:00 p.m., New York City time, on the second business day before the Expiration
Date by discounting the remaining payments of principal and interest on $1,000
principal amount of the New Notes through July 1, 2016 at a discount rate equal
to (a) 1.40%, plus (b) the bid-side yield on the 4.75% U.S. Treasury Note due
May 15, 2014, minus (c) accrued and unpaid interest on the New Notes to, but not
including, the final settlement date, and minus (d) $1,000. From this discounted
amount (as adjusted for the change in price of the New Notes) will be subtracted
accrued and unpaid interest on $1,000 principal amount of Old Notes to, but not
including, the final settlement date. The exchange price will not include the
early exchange payment.
Reference Fixed Spread
Series U.S. Treasury Security (in basis points)
------------ -------------------------- -----------------
8 1/4% Notes 3.125% due May 15, 2007 +95
9-5/8% Notes 6.5% due February 15, 2010 +110
7.50% Notes 4.75% due May 15, 2014 +90
The portion of the exchange price for each series of Old Notes that is in excess
of $1,000, plus (a) accrued and unpaid interest on the Old Notes to, but not
including, the final settlement date, and minus (b) any accrued and unpaid
interest on the New Notes to, but not including, the final settlement date, will
be paid in cash on the final settlement date with respect to Old Notes of that
series that have been tendered and accepted after the Early Exchange Date. The
remainder of the exchange price will be paid through the issuance of $1,000
principal amount of New Notes for each $1,000 principal amount of Old Notes
accepted for exchange.
Pioneer expects that holders who validly tender their Old Notes before the Early
Exchange Date will receive their New Notes and cash payments on Thursday, July
1, 2004, and that holders who validly tender their Old Notes after the Early
Exchange Date but before the Expiration Date will receive their New Notes and
cash payments on Wednesday, July 14, 2004.
The Exchange Offers are subject to the satisfaction or waiver of certain
conditions, including (1) the receipt of consents to the proposed amendments
from the holders of a majority of the aggregate outstanding principal amount of
the 9-5/8% Notes and the 7.50% Notes in order to complete the Exchange Offers
for those series and (2) the ability to accept tenders of at least $250 million
aggregate principal amount of Old Notes in order to complete any of the Exchange
Offers at the Early Exchange Date or the Expiration Date. Pioneer is making each
Exchange Offer independently of the other Exchange Offers, and, except as
described in this paragraph, no Exchange Offer is conditioned upon completion of
any other Exchange Offer.
The terms of the Exchange Offers are described in Pioneer's Exchange Circular
dated June 10, 2004. The Bank of New York is the exchange agent for the Exchange
Offers and will be the trustee under the New Notes. D.F. King & Co., Inc. is the
information agent for the Exchange Offers. Requests for copies of the Exchange
Circular and questions regarding the Exchange Offers may be directed to D.F.
King & Co., Inc. at 1-800-859-8509 (US toll-free). Deutsche Bank Securities Inc.
is Pioneer's lead financial advisor for the Exchange Offers, and Citigroup
Global Markets Inc. and Credit Suisse First Boston LLC are co-financial
advisors.
This announcement is not an offer to exchange, a solicitation of an offer to
exchange or a solicitation of consent with respect to any securities. The
Exchange Offers will be made solely by the Exchange Circular dated June 10,
2004.
Neither the United States Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of the Exchange Circular. Any representation to
the contrary is a criminal offense.
The Exchange Offers are not being made to, nor will Pioneer accept tenders of
Old Notes from, holders in any jurisdiction in which the Exchange Offers or the
acceptance thereof would not be in compliance with the securities or blue sky
laws of such jurisdiction.
The New Notes have not been and will not be registered under the Securities Act
of 1933. Pioneer is making the Exchange Offers in reliance on the exemption from
the registration requirements of the Securities Act of 1933 afforded by Section
3(a)(9) thereof.
Pioneer is a large independent oil and gas exploration and production company
with operations in the United States, Argentina, Canada, Gabon, South Africa and
Tunisia. Pioneer's headquarters are in Dallas, Texas. 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.