Pioneer Reports First Quarter 2005 Results.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- Pioneer Natural Resources Company (NYSE NYSE See: New York Stock Exchange :PXD PXD Powder X-ray Diffraction PXD Post Exercise Discussion PXD Physical Device Driver PXD Pixel Data ) today announced financial and operating results for the quarter ended March 31, 2005. Pioneer reported net income of $84.7 million, or $.58 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This reflects a per share increase of 16% as compared to the same period last year in which Pioneer reported net income of $60.2 million, or $.50 per diluted share. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the first quarter was $334.9 million, an increase of 32% compared to $253.6 million for the same period in 2004. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. declined by $554.0 million during the quarter, ending the period at $1.83 billion. During the quarter, Pioneer sold two volumetric volumetric /vol·u·met·ric/ (vol?u-met´rik) pertaining to or accompanied by measurement in volumes. vol·u·met·ric adj. Of or relating to measurement by volume. production payments (VPP VPP Voluntary Protection Program (OSHA) VPP Velocity Prediction Program (to predict sail boat performance) VPP Virtual Presence Protocol VPP Volts Peak to Peak VPP Virtual Presence Post ) for total proceeds of approximately $593 million and repurchased 3.7 million shares for a total investment of $151.9 million. During April, the Company sold a third VPP for proceeds of approximately $300 million, sold certain U.S. assets for proceeds of approximately $25 million and announced the pending sale of non-strategic assets in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of for expected proceeds of approximately $207 million. Scott Sheffield Sheffield, city, England Sheffield, city (1991 pop. 470,685), N England, at the confluence of the Don River and four tributaries. Sheffield was one of the leading industrial cities of England. It has been a center of cutlery manufacture since the 14th cent. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "To take advantage of high oil and gas prices, we've we've Contraction of we have. we've have sold 38 million barrels of oil equivalent reserves through a combination of VPP transactions and assets sales in Canada and the U.S. for net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). anticipated to exceed $1.1 billion. Opportunities to change a company's financial landscape so dramatically, by selling less than 4% of its assets, don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. come along very often. While we're we're Contraction of we are. we're we are extremely pleased to have improved our balance sheet and substantially enhanced our financial flexibility, we will be cautious as we make investments in the current environment of high commodity prices and rising costs to ensure attractive returns on capital employed Capital Employed 1. The total amount of capital used for the acquisition of profits. 2. The value of all the assets employed in a business. 3. Fixed assets plus working capital. 4. Total assets less current liabilities. ." First quarter oil and gas sales averaged 188,524 barrels oil equivalent per day (BOEPD BOEPD Barrels of Oil Equivalent Per Day ). First quarter oil sales averaged 49,111 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. (BPD Borderline personality disorder (BPD) A pattern of behavior characterized by impulsive acts, intense but chaotic relationships with others, identity problems, and emotional instability. ) and natural gas liquids sales averaged 19,716 BPD. Gas sales in the first quarter averaged 718 million cubic feet per day (MMcfpd). First quarter realized prices for oil and natural gas liquids were $33.27 and $26.88 per barrel, respectively. The realized price for gas was $5.04 per thousand cubic feet (Mcf), including $.17 per Mcf associated with VPP deferred revenue amortization, while North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. realized gas prices averaged $5.96 per Mcf, including $.20 per Mcf associated with VPP deferred revenue amortization. Pioneer also recognized pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. of $24.8 million associated with business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril for downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. at Devils Tower and Canyon Express as a result of damage caused by Hurricane Ivan This article is about the Atlantic hurricane of 2004. For other storms of the same name, see Tropical Storm Ivan (disambiguation). Hurricane Ivan was the strongest hurricane of the 2004 Atlantic hurricane season. . First quarter production costs averaged $6.72 per barrel of oil equivalent The barrel of oil equivalent (bboe, sometimes BOE) is a unit of energy based on the approximate energy released by burning one barrel of crude oil. The US Internal Revenue Service defines it as equal to 5.8 × 106 BTU [1]. 5. (BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip ). Production costs increased as compared to the fourth quarter of 2004 due to an increase in ad valorem taxes Ad Valorem Tax A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments. , additional workover activities performed during Canada's winter access only season, higher field operating costs operating costs npl → gastos mpl operacionales and the retention of operating costs related to the VPP volumes sold. Exploration and abandonment costs were $67.4 million for the quarter and included $28.3 million of dry hole and abandonments associated with unsuccessful wells in the deepwater Deepwater or Deep Water may refer to:
Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , Canada, Nigeria Nigeria (nījĭr`ēə), officially Federal Republic of Nigeria, republic (2006 provisional pop. 140,003,542), 356,667 sq mi (923,768 sq km), W Africa. and Tunisia Tunisia (t  nē`zhə, ty–), Fr. Tunisie, officially Republic of Tunisia, republic (2005 est. pop. , $37.8 million of
geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. and geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. expenses including seismic costs and $1.3 million of delay rentals and unproved acreage abandonments. General and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. for the quarter were $29.6 million, including annual incentive-based performance payments. For the same quarter last year, Pioneer reported total oil and gas sales of 182,050 BOEPD, including oil sales of 47,733 BPD, natural gas liquids sales of 23,406 BPD and gas sales of 665 MMcfpd (excluding field fuel volumes). Realized prices for the 2004 first quarter were $28.31 per barrel for oil, $22.21 per barrel for natural gas liquids and $4.38 per Mcf for gas, while North American gas prices averaged $5.04 per Mcf. Operations Update During the quarter, Pioneer accelerated its onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. drilling activities in each of its core areas to accomplish its more aggressive development plans for 2005. Currently, Pioneer has 17 onshore rigs running in the U.S. and ten rigs running in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . In Canada, the Company recently completed its largest-ever winter drilling campaign, drilling 56 wells. During Canada's summer drilling season, Pioneer plans to drill up to 100 wells to assess the potential of its extensive Horseshoe Canyon Horseshoe Canyon can refer to:
In the deepwater Gulf of Mexico, production from the Devils Tower A-5 well was initiated in mid-April Noun 1. mid-April - the middle part of April period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" Apr, April - the month following March and preceding May and the seventh of eight Devils Tower development wells is currently being completed. Production was also initiated from the Adam 3 development well in Tunisia at a gross rate of approximately 3,000 BPD. The Company continues to expand its offshore exploration program in West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. . Pioneer was awarded acreage in Nigeria Block 320 and is awaiting government approval on Nigeria Block 256 and the potential award of two blocks in the Joint Development Zone between Nigeria and the Democratic Republic of Sao Tome and Principe Noun 1. Democratic Republic of Sao Tome and Principe - island nation in the South Atlantic off the west coast of Africa; achieved independence from Portugal in 1975; has enormous offshore oil reserves . In the deepwater Gulf of Mexico, Pioneer was the apparent high bidder on 13 blocks focused principally in the Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by Canyon area where the Company has three producing fields and is currently participating in appraisal drilling on a fourth discovery. Pioneer has participated in seven key exploration wells this year and expensed three dry holes drilled during the quarter in the deepwater Gulf of Mexico, Nigeria and Tunisia. The Company participated in four wells (two in Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States , the Thunder thunder, sound produced along a path of a lightning flash, caused by the rapid heating and expansion of the adjacent air. Rolling thunder occurs either as a result of the time difference between sounds from the far and near end of a flash, or when mountains, layers Hawk hawk, name generally applied to the smaller members of the Accipitridae, a heterogeneous family of diurnal birds of prey, such as the eagle, the kite, the Old World vulture, and the secretary bird. well in the deepwater Gulf of Mexico and the Nour-1 well in Tunisia) for which results will be announced after further testing and evaluation have been completed. Financial Outlook The following statements are estimates based on current expectations. These forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 2005 production is expected to average 185,000 to 205,000 BOEPD, including a full quarter of production from Canyon Express, continued ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of production from Devils Tower, typical variability in the timing of oil cargo shipments in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. and Tunisia and the impact of a full quarter of VPP volumes sold. Second quarter production costs (including production and ad valorem taxes) are expected to average $6.25 to $6.75 per BOE based on current NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). strip prices for oil and gas. Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and amortization expense is expected to average $9.10 to $9.60 per BOE. Total exploration and abandonment expense is expected to be $50 million to $70 million and includes carryover carryover n. in taxation accounting, using a tax year's deductions, business losses or credits to apply to the following year's tax return to reduce the tax liability. (See: carryback) costs associated with unsuccessful wells that were in progress at the end of the first quarter, plans to drill two deepwater Gulf of Mexico exploration wells and the acquisition of additional seismic data. General and administrative expense is expected to be $27 million to $29 million. Interest expense is expected to be $29 million to $32 million, and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of discount on asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. is expected to be $2 million to $3 million. The Company's second quarter effective income tax rate is expected to range from 36% to 39% based on current capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. plans, including cash income taxes of $5 million to $10 million that are principally related to Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. and Tunisian income taxes and nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. alternative minimum tax in the U.S. Other than in Argentina and Tunisia, the Company continues to benefit from the carryforward carryforward 1. A business operating loss that, for tax purposes, may be claimed a certain number of years in the future, often up to 15 years. of net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. and other positive tax attributes. The Company's financial results and oil and gas hedges are outlined on the attached schedules. Earnings Conference Call This morning at 10:00 a.m. Eastern, Pioneer will discuss its first quarter financial and operating results with an accompanying presentation. The call will be webcast on Pioneer's website, www.pioneernrc.com. At the website, select 'INVESTOR' at the top of the page. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Or you may choose to dial (888) 569-5033 (confirmation code: 6264844) to listen to the call by telephone and view the accompanying visual presentation at the website above. A telephone replay will be available by dialing (888) 203-1112 (confirmation code: 6264844). Pioneer is a large independent oil and gas exploration and production company with operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Argentina, Canada, Equatorial Guinea Equatorial Guinea (gĭn`ē), officially Republic of Equatorial Guinea, republic (2005 est. pop. 536,000), 10,830 sq mi (28,051 sq km), W central Africa. , Nigeria, South Africa 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 News Release are forward-looking statements that are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements and the business prospects of Pioneer 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, international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and associated international political and economic instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability , litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. 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 SHEETS
(in thousands)
March 31, December 31,
2005 2004
------------ -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $16,039 $7,257
Accounts receivable, net 224,874 210,279
Inventories 41,256 40,332
Prepaid expenses 8,355 10,822
Deferred income taxes 188,124 115,206
Other current assets, net 9,213 9,529
------------ -------------
Total current assets 487,861 393,425
------------ -------------
Property, plant and equipment, at cost:
Oil and gas properties, using the
successful efforts method of accounting 8,338,605 8,124,616
Accumulated depletion, depreciation and
amortization (2,395,972) (2,243,549)
------------ -------------
Total property, plant and equipment 5,942,633 5,881,067
------------ -------------
Deferred income taxes 2,038 2,963
Goodwill 307,951 315,880
Other assets, net 141,854 135,132
------------ -------------
$6,882,337 $6,728,467
------------ -------------
------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $282,854 $216,051
Interest payable 29,976 45,735
Income taxes payable 16,295 13,520
Deferred revenue 84,469 --
Other current liabilities 509,405 269,153
------------ -------------
Total current liabilities 922,999 544,459
------------ -------------
Long-term debt 1,831,938 2,385,950
Deferred income taxes 518,291 607,415
Deferred revenue 545,811 --
Other liabilities and minority interests 556,358 358,863
Stockholders' equity 2,506,940 2,831,780
------------ -------------
$6,882,337 $6,728,467
------------ -------------
------------ -------------
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended
March 31,
-------------------
2005 2004
--------- ---------
Revenues and other income:
Oil and gas $520,312 $435,527
Interest and other 28,333 1,735
Gain (loss) on disposition of assets, net 2,221 (13)
--------- ---------
550,866 437,249
--------- ---------
Costs and expenses:
Oil and gas production 113,962 78,212
Depletion, depreciation and amortization 156,151 136,499
Impairment of long-lived assets 152 --
Exploration and abandonments 67,385 80,506
General and administrative 29,585 18,329
Accretion of discount on asset retirement
obligations 2,140 1,966
Interest 33,251 21,576
Other 11,720 196
--------- ---------
414,346 337,284
--------- ---------
Income before income taxes 136,520 99,965
Income tax provision (51,863) (39,777)
--------- ---------
Net income $84,657 $60,188
--------- ---------
--------- ---------
Net income per share:
Basic $.59 $.51
--------- ---------
--------- ---------
Diluted $.58 $.50
--------- ---------
--------- ---------
Weighted average shares outstanding:
Basic 142,898 118,719
--------- ---------
--------- ---------
Diluted 147,345 120,264
--------- ---------
--------- ---------
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended
March 31,
-------------------
2005 2004
--------- ---------
Cash flows from operating activities:
Net income $84,657 $60,188
Depletion, depreciation and amortization 156,151 136,499
Impairment of long-lived assets 152 --
Exploration expenses, including dry holes 58,445 78,820
Deferred income taxes 42,972 32,720
Loss (gain) on disposition of assets, net (2,221) 13
Accretion of discount on asset retirement
obligations 2,140 1,966
Noncash interest expense 696 (6,370)
Commodity hedge related activity (3,061) (11,392)
Amortization of stock-based compensation 5,152 1,979
Amortization of deferred revenue (11,625) --
Other noncash items 4,678 (658)
Changes in operating assets and liabilities, net
of effects from acquisition:
Accounts receivable, net (12,033) (33,737)
Inventories (1,315) (19)
Prepaid expenses 2,449 917
Other current assets, net (198) 757
Accounts payable 17,593 (6,002)
Interest payable (16,259) 693
Income taxes payable 2,775 3,058
Other current liabilities 3,736 (5,802)
--------- ---------
Net cash provided by operating activities 334,884 253,630
Net cash provided by (used in) investing
activities 361,899 (172,301)
Net cash used in financing activities (688,202) (91,426)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 8,581 (10,097)
Effect of exchange rate changes on cash and cash
equivalents 201 (180)
Cash and cash equivalents, beginning of period 7,257 19,299
--------- ---------
Cash and cash equivalents, end of period $16,039 $9,022
--------- ---------
--------- ---------
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
(Unaudited)
Three months ended
March 31,
---------------------
2005 2004
---------- ----------
Average Daily Sales Volumes:
Oil (Bbls) -- U.S. 28,723 24,971
Argentina 8,191 8,628
Canada 230 100
Africa 11,967 14,034
---------- ----------
Total 49,111 47,733
Natural gas liquids (Bbls) -- U.S. 17,543 20,936
Argentina 1,572 1,424
Canada 601 1,046
---------- ----------
Total 19,716 23,406
Gas (Mcf) -- U.S. 538,285 527,630
Argentina 130,351 97,818
Canada 49,546 40,019
---------- ----------
Total 718,182 665,467
Total Production:
Oil (MBbls) 4,420 4,344
Natural gas liquids (MBbls) 1,774 2,130
Gas (MMcf) 64,636 60,558
Equivalent barrels (MBOE) 16,967 16,567
Average Reported Price (a):
Oil (per Bbl) -- U.S. $28.96 $26.67
Argentina $31.75 $27.93
Canada $53.81 $35.00
Africa $44.28 $31.41
Worldwide $33.27 $28.31
Natural gas liquids (per Bbl) -- U.S. $26.15 $21.52
Argentina $30.35 $29.16
Canada $39.07 $26.51
Worldwide $26.88 $22.21
Gas (per Mcf) -- U.S. $5.94 $5.10
Argentina $.88 $.58
Canada $6.17 $4.22
Worldwide $5.04 $4.38
(a) Average prices include the results of hedging activities.
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
EBITDAX and discretionary cash flow ("DCF") (as defined below) are
presented herein, and reconciled to the generally accepted accounting
principle ("GAAP") measures of net income and net cash provided by
operating activities because of their wide acceptance by the
investment community as financial indicators of a company's ability to
internally fund exploration and development activities and to service
or incur debt. The Company also views the non-GAAP measures of EBITDAX
and DCF as useful tools for comparisons of the Company's financial
indicators with those of peer companies that follow the full cost
method of accounting. EBITDAX and DCF should not be considered as
alternatives to net income or net cash provided by operating
activities, as defined by GAAP.
Three months ended
March 31,
-------------------
2005 2004
--------- ---------
Net income $84,657 $60,188
Depletion, depreciation and amortization 156,151 136,499
Impairment of long-lived assets 152 --
Exploration and abandonments 67,385 80,506
Accretion of discount on asset retirement
obligations 2,140 1,966
Interest expense 33,251 21,576
Income tax provision 51,863 39,777
Loss (gain) on disposition of assets, net (2,221) 13
Commodity hedge related activity (3,061) (11,392)
Amortization of stock-based compensation 5,152 1,979
Amortization of deferred revenue (11,625) --
Other noncash items 4,678 (658)
--------- ---------
EBITDAX (a) 388,522 330,454
Less: Cash interest expense (32,555) (27,946)
Current income taxes (8,891) (7,057)
--------- ---------
Discretionary cash flow (b) 347,076 295,451
Less: Cash exploration expense (8,940) (1,686)
Changes in operating assets and liabilities (3,252) (40,135)
--------- ---------
Net cash provided by operating activities $334,884 $253,630
--------- ---------
--------- ---------
(a) "EBITDAX" represents earnings before depletion, depreciation and
amortization expense; impairment of long-lived assets; exploration
and abandonments; accretion of discount on asset retirement
obligations; interest expense; income taxes; gain or loss on the
disposition of assets; commodity hedge related activity;
amortization of stock-based compensation; amortization of deferred
revenue; and other noncash items.
(b) Discretionary cash flow equals cash flows from operating
activities before changes in operating assets and liabilities and
before cash exploration expense.
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
As of May 2, 2005
Open Commodity Hedge Positions
------------------------------
2005
-------------------------------------------
Second Third Fourth
Quarter Quarter Quarter Year
---------- ---------- ---------- ----------
Average Daily Oil
Production Hedged:
Swap Contracts:
Volume (Bbl) 27,000 27,000 27,000 27,000
NYMEX price (Bbl) $27.97 $27.97 $27.97 $27.97
Collar Contracts:
Volume (Bbl) -- -- -- --
NYMEX price (Bbl)
Ceiling $-- $-- $-- $--
Floor $-- $-- $-- $--
Average Daily Gas
Production Hedged:
Swap Contracts:
Volume (Mcf) 282,240 283,422 253,535 273,032
NYMEX price (MMBtu) (a) $5.20 $5.20 $5.20 $5.20
Collar Contracts:
Volume (Mcf) -- -- -- --
NYMEX price (MMBtu)
Ceiling $-- $-- $-- $--
Floor $-- $-- $-- $--
2006 2007 2008
-------------- -------------- -------------
Average Daily Oil
Production Hedged:
Swap Contracts:
Volume (Bbl) 10,000 13,000 17,000
NYMEX price (Bbl) $31.69 $30.89 $29.21
Collar Contracts:
Volume (Bbl) 3,500 -- --
NYMEX price (Bbl)
Ceiling $41.95 $-- $--
Floor $35.00 $-- $--
Average Daily Gas
Production Hedged:
Swap Contracts:
Volume (Mcf) 73,842 29,195 5,000
NYMEX price (MMBtu) (a) $4.30 $4.30 $5.40
Collar Contracts:
Volume (Mcf) 17,329 -- --
NYMEX price (MMBtu)
Ceiling $9.15 $-- $--
Floor $6.65 $-- $--
(a) Approximate, based on historical differentials to index prices.
Amortization of Volumetric Production Payment Proceeds and
Derivative Losses
----------------------------------------------------------
(in thousands)
2005
-------------------------------------------
Second Third Fourth
Quarter Quarter Quarter Year
---------- ---------- ---------- ----------
VPP proceeds, net of
transaction costs $19,685 $21,126 $21,061 $61,872
Net hedge obligations
assigned 765 756 757 2,278
---------- ---------- ---------- ----------
Total deferred revenue (a) 20,450 21,882 21,818 64,150
Less net derivative losses
to be recognized in
pretax earnings (b) (5,370) (1,043) (2,307) (8,720)
---------- ---------- ---------- ----------
Total VPP impact to pretax
earnings $15,080 $20,839 $19,511 $55,430
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
2006 Thereafter Total
-------------- -------------- -------------
VPP proceeds, net of
transaction costs $184,103 $635,608 $881,583
Net hedge obligations
assigned 6,248 28,973 37,499
-------------- -------------- -------------
Total deferred revenue (a) 190,351 664,581 919,082
Less net derivative losses
to be recognized in
pretax earnings (b) (4,860) (19,921) (33,501)
-------------- -------------- -------------
Total VPP impact to pretax
earnings $185,491 $644,660 $885,581
-------------- -------------- -------------
-------------- -------------- -------------
(a) Deferred revenue will be amortized as increases to oil and gas
revenues during the indicated future periods.
(b) Represents the remaining pretax earnings impact of the derivatives
assigned in the VPPs.
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion