Pioneer Natural Resources Reports Second Quarter 2023 Financial and Operating Results
- Pioneer reported strong Q2 2023 financial results, with net income of $1.1 billion, or $4.55 per diluted share.
- Second quarter oil production averaged 369 MBOPD, exceeding guidance.
- Total production averaged 711 MBOEPD, above guidance.
- Pioneer increased the midpoints of full-year 2023 oil and total production guidance.
- The company generated strong second quarter free cash flow of $742 million.
- Pioneer declared a quarterly dividend of $1.84 per share.
- The company's balance sheet remains strong with net debt of $5.2 billion and $1.9 billion of liquidity as of June 30, 2023.
- None.
Highlights
- Second quarter oil production averaged 369 thousand barrels of oil per day (MBOPD), near the top end of quarterly guidance
- Second quarter total production averaged 711 thousand barrels of oil equivalent per day (MBOEPD), above the top end of quarterly guidance
- Increased the midpoints of full-year 2023 oil and total production guidance to 369 MBOPD and 707 MBOEPD, respectively
-
Reduced the midpoint of full-year 2023 capital1 guidance by
$125 million
-
Generated strong second quarter free cash flow2 of
$742 million
-
Declared a quarterly base-plus-variable dividend of
per share and repurchased$1.84 of shares during the second quarter (0.6 million shares)$124 million
"Pioneer's strong execution delivered excellent second quarter results, with oil production near the top end of our guidance range," stated Rich Dealy, President and Chief Operating Officer. "Additionally, our solid operational results generated significant free cash flow2 during the second quarter, supporting compelling shareholder returns.
"Continued strong well productivity and highly efficient operations underpin our ability to increase full-year production guidance, while lowering full-year capital1 guidance through a purposeful reduction in activity. Our improved 2023 outlook is expected to deliver an even more capitally efficient program.
"Pioneer's greatest competitive advantages remain our deep inventory of high-return wells paired with our highly efficient operations and our dedicated employees. We expect this combination to generate strong corporate returns and significant free cash flow3 for decades, providing long-term value for shareholders."
Financial Highlights
Pioneer maintains a strong balance sheet, with net debt of
Cash flow from operating activities during the second quarter was
During the second quarter, the Company's total capital expenditures1 totaled
For the third quarter of 2023, the Company's Board of Directors has declared a quarterly base-plus-variable dividend of
In addition to a strong dividend payout, the Company continues to execute opportunistic share repurchases. During the second quarter, the Company repurchased
Financial Results
For the second quarter of 2023, the average realized price for oil was
Production costs, including taxes, averaged
Operations Update
Pioneer's continued operational excellence in the
Pioneer's large and contiguous acreage position provides the opportunity to drive further operational enhancements. The development of wells with lateral lengths in excess of 15,000 feet provides significant capital savings on a per foot basis and is expected to generate an internal rate of return (IRR) that is on average
Additionally, Pioneer has delivered significant cost and efficiency improvements from the utilization of simulfrac completions and localized sand mines. The Company added a third simulfrac fleet in the first quarter of 2023 and a second localized sand mine commenced operations during the second quarter. Consistent with the Company's commitment to sustainable operations, Pioneer expects
Extended laterals, utilization of simulfrac fleets, localized sand and the transition of completions fleets from diesel-only fuel are a few examples of the many continuous improvement efforts that the Company's operational teams are progressing.
Improved 2023 Outlook
Pioneer is lowering the midpoint of its 2023 drilling, completions, facilities and water infrastructure capital budget1 by
During 2023, the Company now plans to operate an average of 23 to 25 horizontal drilling rigs in the
This activity level is expected to deliver 2023 oil production of 364 to 374 MBOPD, an increase of 4.5 MBOPD at the midpoint when compared to original 2023 guidance. Total production is expected to range from 697 to 717 MBOEPD, an increase of 22 MBOEPD at the midpoint when compared to original 2023 guidance.
Third Quarter 2023 Guidance
Third quarter 2023 oil production is forecasted to average between 367 to 377 MBOPD and total production is expected to average between 705 to 725 MBOEPD. Production costs are expected to average
The Company's effective income tax rate is expected to be between
Environmental, Social & Governance (ESG)
Pioneer views sustainability as a multidisciplinary effort that balances economic growth, environmental stewardship and social responsibility. The Company emphasizes developing natural resources in a manner that protects surrounding communities and preserves the environment.
Pioneer recently published its 2023 Sustainability Report highlighting the Company's focus and significant progress on its ESG initiatives. The Company incorporated the Task Force on Climate-related Financial Disclosure (TCFD) framework into this report to provide a more comprehensive overview of the Company's sustainability practices. The report details Pioneer's leading ESG strategy, which includes significant progress on environmental practices and highlights the Company's continued support for its employees and local communities.
The Company has multiple initiatives underway that are expected to result in tangible progress towards Pioneer's net zero emissions ambition6. In addition to being one of the first
Pioneer continues to advance the electrification of field operations through a large-scale renewable energy project on Pioneer owned surface acreage in partnership with a subsidiary of NextEra Energy Resources, LLC. Construction began in 2023 on the 51-turbine, 140-megawatt wind farm project and is expected to begin supplying power to Pioneer operations in early 2024.
Additionally, Pioneer decreased its dependence on freshwater used in completions to
For more details, see Pioneer's 2023 Sustainability Report at www.pxd.com/sustainability.
Earnings Conference Call
On Wednesday, August 2, 2023, at 9:00 a.m. Central Time, Pioneer will discuss its financial and operating results for the quarter ended June 30, 2023, with an accompanying presentation. Instructions for listening to the call and viewing the accompanying presentation are shown below.
Internet: www.pxd.com
Select "Investors," then "Quarterly Results" to listen to the discussion, view the presentation and see other related material.
Telephone: Dial (888) 440-5983 five minutes before the call.
A replay of the webcast will be archived on Pioneer's website. An audio only replay will be available via telephone through September 1, 2023. To access the audio replay, dial (800) 770-2030 and enter passcode 8960822#.
About Pioneer
Pioneer is a large independent oil and gas exploration and production company, headquartered in
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 the Company are subject to a number of risks and uncertainties that may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices; product supply and demand; the impact of armed conflict (including the war in
Footnote 1: Excludes acquisitions, asset retirement obligations, capitalized interest, geological and geophysical G&A, information technology, corporate facilities and vehicles.
Footnote 2: Second quarter 2023 free cash flow is a non-GAAP financial measure. As used by the Company, free cash flow is defined as net cash provided by operating activities, adjusted for changes in operating assets and liabilities, less capital expenditures1. See the supplemental schedules for a reconciliation of second quarter 2023 free cash flow to the comparable GAAP number.
Footnote 3: Forecasted free cash flow numbers are non-GAAP financial measures. Due to their forward-looking nature, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as working capital changes. Accordingly, Pioneer is unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from this non-GAAP measure in future periods could be significant.
Footnote 4: Calculated by dividing the Company's annualized third quarter 2023 total dividend per share by the Company's closing stock price on July 28, 2023. Future dividends, whether base or variable, are authorized and determined by the Company's Board of Directors in its sole discretion. Decisions regarding the payment of dividends are subject to a number of considerations at the time, including without limitation the Company's liquidity and capital resources, the Company's results of operations and anticipated future results of operations, the level of cash reserves the Company maintains to fund future capital expenditures or other needs, and other factors that the Board of Directors deems relevant. The Company can provide no assurance that dividends will be authorized or declared in the future or the amount of any future dividends. Any future variable dividends, if declared and paid, will by their nature fluctuate based on the Company's free cash flow and share repurchases, which will depend on a number of factors beyond the Company's control, including commodity prices and the Company's stock price.
Footnote 5: Forecasted cash flow is a non-GAAP financial measure. The 2023 estimated cash flow number represents January through December 2023 actual and forecasted operating cash flow (before working capital changes) based on strip pricing and internal forecasts of 2023 production. Due to their forward-looking nature, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as working capital changes. Accordingly, Pioneer is unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from this non-GAAP measure in future periods could be significant.
Footnote 6: Includes Scope 1 and Scope 2 emissions.
Note: Estimates of future results, including cash flow and free cash flow, are based on the Company's internal financial model prepared by management and used to assist in the management of its business. Pioneer's financial models are not prepared with a view to public disclosure or compliance with GAAP, any guidelines of the United States Securities and Exchange Commission or any other body. The financial models reflect numerous assumptions, in addition to those noted in this news release, with respect to general business, economic, market and financial conditions and other matters. These assumptions regarding future events are difficult, if not impossible to predict, and many are beyond Pioneer's control. Accordingly, there can be no assurance that the assumptions made by management in preparing the financial models will prove accurate. It is expected that there will be differences between actual and estimated or modeled results, and actual results may be materially greater or less than those contained in the Company's financial models.
PIONEER NATURAL RESOURCES COMPANY | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in millions) |
|||||||
|
June 30, 2023 |
|
December 31, 2022 |
||||
|
(Unaudited) |
|
|
||||
ASSETS |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
91 |
|
|
$ |
1,032 |
|
Accounts receivable, net |
|
1,513 |
|
|
|
1,853 |
|
Inventories |
|
448 |
|
|
|
424 |
|
Investment in affiliate |
|
137 |
|
|
|
172 |
|
Prepaids and other |
|
153 |
|
|
|
245 |
|
Total current assets |
|
2,342 |
|
|
|
3,726 |
|
Oil and gas properties, using the successful efforts method of accounting |
|
46,924 |
|
|
|
44,473 |
|
Accumulated depletion, depreciation and amortization |
|
(16,174 |
) |
|
|
(14,843 |
) |
Total oil and gas properties, net |
|
30,750 |
|
|
|
29,630 |
|
Other property and equipment, net |
|
1,624 |
|
|
|
1,658 |
|
Operating lease right-of-use assets |
|
366 |
|
|
|
340 |
|
Goodwill |
|
242 |
|
|
|
243 |
|
Other assets |
|
170 |
|
|
|
143 |
|
|
$ |
35,494 |
|
|
$ |
35,740 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|||||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
2,380 |
|
|
$ |
2,637 |
|
Interest payable |
|
48 |
|
|
|
33 |
|
Income taxes payable |
|
25 |
|
|
|
63 |
|
Current portion of debt |
|
311 |
|
|
|
779 |
|
Derivatives |
|
72 |
|
|
|
44 |
|
Operating leases |
|
145 |
|
|
|
125 |
|
Other |
|
218 |
|
|
|
206 |
|
Total current liabilities |
|
3,199 |
|
|
|
3,887 |
|
Long-term debt |
|
5,010 |
|
|
|
4,125 |
|
Derivatives |
|
85 |
|
|
|
96 |
|
Deferred income taxes |
|
4,102 |
|
|
|
3,867 |
|
Operating leases |
|
243 |
|
|
|
236 |
|
Other liabilities |
|
855 |
|
|
|
988 |
|
Equity |
|
22,000 |
|
|
|
22,541 |
|
|
$ |
35,494 |
|
|
$ |
35,740 |
|
PIONEER NATURAL RESOURCES COMPANY |
|||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(in millions, except per share data) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues and other income: |
|
|
|
|
|
|
|
||||||||
Oil and gas |
$ |
2,977 |
|
|
$ |
4,639 |
|
|
$ |
6,142 |
|
|
$ |
8,570 |
|
Sales of purchased commodities |
|
1,583 |
|
|
|
2,366 |
|
|
|
3,014 |
|
|
|
4,583 |
|
Interest and other income (loss), net |
|
43 |
|
|
|
(56 |
) |
|
|
7 |
|
|
|
69 |
|
Derivative loss, net |
|
(1 |
) |
|
|
(65 |
) |
|
|
(45 |
) |
|
|
(200 |
) |
Gain (loss) on disposition of assets, net |
|
(3 |
) |
|
|
36 |
|
|
|
22 |
|
|
|
70 |
|
|
|
4,599 |
|
|
|
6,920 |
|
|
|
9,140 |
|
|
|
13,092 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Oil and gas production |
|
487 |
|
|
|
478 |
|
|
|
942 |
|
|
|
894 |
|
Production and ad valorem taxes |
|
185 |
|
|
|
271 |
|
|
|
393 |
|
|
|
495 |
|
Depletion, depreciation and amortization |
|
695 |
|
|
|
620 |
|
|
|
1,359 |
|
|
|
1,234 |
|
Purchased commodities |
|
1,642 |
|
|
|
2,382 |
|
|
|
3,127 |
|
|
|
4,534 |
|
Exploration and abandonments |
|
23 |
|
|
|
11 |
|
|
|
38 |
|
|
|
24 |
|
General and administrative |
|
88 |
|
|
|
88 |
|
|
|
172 |
|
|
|
161 |
|
Accretion of discount on asset retirement obligations |
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
Interest |
|
41 |
|
|
|
33 |
|
|
|
70 |
|
|
|
70 |
|
Other |
|
27 |
|
|
|
5 |
|
|
|
67 |
|
|
|
83 |
|
|
|
3,192 |
|
|
|
3,892 |
|
|
|
6,176 |
|
|
|
7,503 |
|
Income before income taxes |
|
1,407 |
|
|
|
3,028 |
|
|
|
2,964 |
|
|
|
5,589 |
|
Income tax provision |
|
(305 |
) |
|
|
(657 |
) |
|
|
(640 |
) |
|
|
(1,209 |
) |
Net income attributable to common stockholders |
$ |
1,102 |
|
|
$ |
2,371 |
|
|
$ |
2,324 |
|
|
$ |
4,380 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
4.71 |
|
|
$ |
9.78 |
|
|
$ |
9.90 |
|
|
$ |
18.03 |
|
Diluted |
$ |
4.55 |
|
|
$ |
9.30 |
|
|
$ |
9.55 |
|
|
$ |
17.15 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
234 |
|
|
|
242 |
|
|
|
234 |
|
|
|
242 |
|
Diluted |
242 |
254 |
243 |
255 |
PIONEER NATURAL RESOURCES COMPANY |
|||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||
(in millions) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
1,102 |
|
|
$ |
2,371 |
|
|
$ |
2,324 |
|
|
$ |
4,380 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depletion, depreciation and amortization |
|
695 |
|
|
|
620 |
|
|
|
1,359 |
|
|
|
1,234 |
|
Exploration expenses |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
6 |
|
Deferred income taxes |
|
113 |
|
|
|
513 |
|
|
|
223 |
|
|
|
1,045 |
|
(Gain) loss on disposition of assets, net |
|
3 |
|
|
|
(36 |
) |
|
|
(22 |
) |
|
|
(70 |
) |
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
47 |
|
Accretion of discount on asset retirement obligations |
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
Interest expense |
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
5 |
|
Derivative-related activity |
|
(18 |
) |
|
|
(27 |
) |
|
|
18 |
|
|
|
40 |
|
Amortization of stock-based compensation |
|
27 |
|
|
|
20 |
|
|
|
50 |
|
|
|
39 |
|
Investment valuation adjustments |
|
(18 |
) |
|
|
65 |
|
|
|
35 |
|
|
|
(49 |
) |
Other |
|
32 |
|
|
|
14 |
|
|
|
84 |
|
|
|
41 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
(123 |
) |
|
|
38 |
|
|
|
338 |
|
|
|
(659 |
) |
Inventories |
|
39 |
|
|
|
(115 |
) |
|
|
(24 |
) |
|
|
(241 |
) |
Other assets |
|
114 |
|
|
|
(44 |
) |
|
|
51 |
|
|
|
(44 |
) |
Accounts payable |
|
38 |
|
|
|
(90 |
) |
|
|
(342 |
) |
|
|
88 |
|
Interest payable |
|
30 |
|
|
|
17 |
|
|
|
14 |
|
|
|
(13 |
) |
Income taxes payable |
|
(263 |
) |
|
|
(25 |
) |
|
|
(38 |
) |
|
|
(8 |
) |
Other liabilities |
|
(66 |
) |
|
|
(110 |
) |
|
|
(58 |
) |
|
|
(50 |
) |
Net cash provided by operating activities |
|
1,713 |
|
|
|
3,218 |
|
|
|
4,027 |
|
|
|
5,799 |
|
Net cash used in investing activities |
|
(1,262 |
) |
|
|
(755 |
) |
|
|
(2,466 |
) |
|
|
(2,065 |
) |
Net cash used in financing activities |
|
(1,552 |
) |
|
|
(2,272 |
) |
|
|
(2,502 |
) |
|
|
(5,033 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
(1,101 |
) |
|
|
191 |
|
|
|
(941 |
) |
|
|
(1,299 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
1,192 |
|
|
|
2,394 |
|
|
|
1,032 |
|
|
|
3,884 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
91 |
|
|
$ |
2,585 |
|
|
$ |
91 |
|
|
$ |
2,585 |
|
PIONEER NATURAL RESOURCES COMPANY |
|||||||||||||||
UNAUDITED SUMMARY PRODUCTION, PRICE AND MARGIN DATA |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Average Daily Sales Volumes: |
|
|
|
|
|
|
|
||||||||
Oil (Bbls) |
|
369,070 |
|
|
|
347,964 |
|
|
|
365,214 |
|
|
|
351,597 |
|
Natural gas liquids ("NGLs") (Bbls) |
|
181,098 |
|
|
|
160,183 |
|
|
|
174,329 |
|
|
|
156,576 |
|
Gas (Mcf) |
|
963,064 |
|
|
|
808,181 |
|
|
|
936,595 |
|
|
|
792,847 |
|
Total (BOE) |
|
710,678 |
|
|
|
642,844 |
|
|
|
695,643 |
|
|
|
640,314 |
|
|
|
|
|
|
|
|
|
||||||||
Average Prices: |
|
|
|
|
|
|
|
||||||||
Oil per Bbl |
$ |
72.90 |
|
|
$ |
110.56 |
|
|
$ |
74.00 |
|
|
$ |
102.54 |
|
NGLs per Bbl |
$ |
22.43 |
|
|
$ |
44.21 |
|
|
$ |
24.76 |
|
|
$ |
42.83 |
|
Gas per Mcf |
$ |
1.81 |
|
|
$ |
6.72 |
|
|
$ |
2.77 |
|
|
$ |
5.79 |
|
Total per BOE |
$ |
46.03 |
|
|
$ |
79.31 |
|
|
$ |
48.78 |
|
|
$ |
73.94 |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Margin Data ($ per BOE): |
|
|
|
|
|
|
|
||||||||
Average price |
$ |
46.03 |
|
|
$ |
79.31 |
|
|
$ |
48.78 |
|
|
$ |
73.94 |
|
Production costs |
|
(7.53 |
) |
|
|
(8.18 |
) |
|
|
(7.47 |
) |
|
|
(7.72 |
) |
Production and ad valorem taxes |
|
(2.86 |
) |
|
|
(4.63 |
) |
|
|
(3.13 |
) |
|
|
(4.27 |
) |
|
$ |
35.64 |
|
|
$ |
66.50 |
|
|
$ |
38.18 |
|
|
$ |
61.95 |
|
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTARY EARNINGS PER SHARE INFORMATION
(in millions, except per share data)
The Company uses the two-class method of calculating basic and diluted earnings per share. Under the two-class method of calculating earnings per share, generally accepted accounting principles ("GAAP") provide that share-based awards with guaranteed dividend or distribution participation rights qualify as "participating securities" during their vesting periods. During periods in which the Company realizes net income attributable to common stockholders, the Company's basic net income per share attributable to common stockholders is computed as (i) net income attributable to common stockholders, (ii) less participating share-based earnings (iii) divided by weighted average basic shares outstanding. The Company's diluted net income per share attributable to common stockholders is computed as (i) basic net income attributable to common stockholders, (ii) plus the reallocation of participating earnings, if any, (iii) plus the after-tax interest expense associated with the Company's convertible senior notes that are assumed to be converted into shares (iv) divided by weighted average diluted shares outstanding. During periods in which the Company realizes a net loss attributable to common stockholders, securities or other contracts to issue common stock would be dilutive to loss per share; therefore, conversion into common stock is assumed not to occur.
The Company's net income attributable to common stockholders is reconciled to basic and diluted net income attributable to common stockholders as follows:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income attributable to common stockholders |
$ |
1,102 |
|
|
$ |
2,371 |
|
|
$ |
2,324 |
|
|
$ |
4,380 |
|
Participating share-based earnings |
|
(2 |
) |
|
|
(6 |
) |
|
|
(5 |
) |
|
|
(11 |
) |
Basic net income attributable to common stockholders |
|
1,100 |
|
|
|
2,365 |
|
|
|
2,319 |
|
|
|
4,369 |
|
Adjustment to after-tax interest expense to reflect the dilutive impact attributable to convertible senior notes |
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
3 |
|
Diluted net income attributable to common stockholders |
$ |
1,101 |
|
|
$ |
2,366 |
|
|
$ |
2,321 |
|
|
$ |
4,372 |
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding |
|
234 |
|
|
|
242 |
|
|
|
234 |
|
|
|
242 |
|
Convertible senior notes dilution |
|
8 |
|
|
|
12 |
|
|
|
9 |
|
|
|
13 |
|
Diluted weighted average shares outstanding |
|
242 |
|
|
|
254 |
|
|
|
243 |
|
|
|
255 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
4.71 |
|
|
$ |
9.78 |
|
|
$ |
9.90 |
|
|
$ |
18.03 |
|
Diluted |
$ |
4.55 |
|
|
$ |
9.30 |
|
|
$ |
9.55 |
|
|
$ |
17.15 |
|
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(in millions)
EBITDAX and discretionary cash flow ("DCF") (as defined below) are presented herein, and reconciled to the 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
1,102 |
|
|
$ |
2,371 |
|
|
$ |
2,324 |
|
|
$ |
4,380 |
|
Depletion, depreciation and amortization |
|
695 |
|
|
|
620 |
|
|
|
1,359 |
|
|
|
1,234 |
|
Exploration and abandonments |
|
23 |
|
|
|
11 |
|
|
|
38 |
|
|
|
24 |
|
Accretion of discount on asset retirement obligations |
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
Interest expense |
|
41 |
|
|
|
33 |
|
|
|
70 |
|
|
|
70 |
|
Income tax provision |
|
305 |
|
|
|
657 |
|
|
|
640 |
|
|
|
1,209 |
|
(Gain) loss on disposition of assets, net |
|
3 |
|
|
|
(36 |
) |
|
|
(22 |
) |
|
|
(70 |
) |
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
47 |
|
Derivative-related activity |
|
(18 |
) |
|
|
(27 |
) |
|
|
18 |
|
|
|
40 |
|
Amortization of stock-based compensation |
|
27 |
|
|
|
20 |
|
|
|
50 |
|
|
|
39 |
|
Investment valuation adjustments |
|
(18 |
) |
|
|
65 |
|
|
|
35 |
|
|
|
(49 |
) |
Other |
|
32 |
|
|
|
14 |
|
|
|
84 |
|
|
|
41 |
|
EBITDAX (a) |
|
2,196 |
|
|
|
3,732 |
|
|
|
4,604 |
|
|
|
6,973 |
|
Cash interest expense |
|
(38 |
) |
|
|
(31 |
) |
|
|
(64 |
) |
|
|
(65 |
) |
Current income tax provision |
|
(192 |
) |
|
|
(144 |
) |
|
|
(417 |
) |
|
|
(164 |
) |
Discretionary cash flow (b) |
|
1,966 |
|
|
|
3,557 |
|
|
|
4,123 |
|
|
|
6,744 |
|
Cash exploration expense |
|
(22 |
) |
|
|
(10 |
) |
|
|
(37 |
) |
|
|
(18 |
) |
Changes in operating assets and liabilities |
|
(231 |
) |
|
|
(329 |
) |
|
|
(59 |
) |
|
|
(927 |
) |
Net cash provided by operating activities |
$ |
1,713 |
|
|
$ |
3,218 |
|
|
$ |
4,027 |
|
|
$ |
5,799 |
|
_____________ | ||
(a) |
"EBITDAX" represents earnings before depletion, depreciation and amortization expense; exploration and abandonments; accretion of discount on asset retirement obligations; interest expense; income taxes; net gain or loss on the disposition of assets; loss on early extinguishment of debt; noncash derivative-related activity; noncash amortization of stock-based compensation; noncash valuation adjustments on investment in affiliate and short-term investments; and other noncash items. |
|
(b) |
Discretionary cash flow equals cash flows from operating activities before changes in operating assets and liabilities and cash exploration expense. |
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (continued)
(in millions, except per share data)
Adjusted income attributable to common stockholders excluding noncash mark-to-market ("MTM") adjustments and unusual items are presented in this earnings release and reconciled to the Company's net income attributable to common stockholders (determined in accordance with GAAP), as the Company believes these non-GAAP financial measures reflect an additional way of viewing aspects of the Company's business that, when viewed together with its GAAP financial results, provide a more complete understanding of factors and trends affecting its historical financial performance and future operating results, greater transparency of underlying trends and greater comparability of results across periods. In addition, management believes that these non-GAAP financial measures may enhance investors' ability to assess the Company's historical and future financial performance. These non-GAAP financial measures are not intended to be a substitute for the comparable GAAP financial measure and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Noncash MTM adjustments and unusual items may recur in future periods; however, the amount and frequency can vary significantly from period to period.
The Company's net income attributable to common stockholders as determined in accordance with GAAP is reconciled to income adjusted for noncash MTM adjustments, including (i) the Company's equity investment in ProPetro Holding Corp. ("ProPetro") and (ii) the Company's derivative positions, and unusual items is as follows:
|
|
|
Three Months Ended June 30, 2023 |
||||||
|
Ref |
|
After-tax Amounts |
|
Per Diluted Share |
||||
|
|
|
(in millions) |
|
|
||||
Net income attributable to common stockholders |
|
|
$ |
1,102 |
|
|
$ |
4.55 |
|
Noncash MTM adjustments: |
|
|
|
|
|
||||
ProPetro investment gain ( |
|
|
|
(14 |
) |
|
|
(0.06 |
) |
Derivative gain, net ( |
|
|
|
(14 |
) |
|
|
(0.06 |
) |
Adjusted income excluding noncash MTM adjustments |
|
|
|
1,074 |
|
|
|
4.43 |
|
Unusual items: |
|
|
|
|
|
||||
Impairment of long-lived assets ( |
(a) |
|
|
9 |
|
|
|
0.04 |
|
Loss on disposition of assets ( |
(b) |
|
|
3 |
|
|
|
0.01 |
|
Net loss on settlement of convertible debt conversion option derivatives ( |
(c) |
|
|
2 |
|
|
|
0.01 |
|
Adjusted income excluding noncash MTM adjustments and unusual items |
|
|
$ |
1,088 |
|
|
$ |
4.49 |
|
_____________ | ||
(a) |
Represents impairment expense of an unoccupied field office. |
|
(b) |
Represents a loss on nonmonetary transactions in which the Company exchanged ownership interests in certain developed and undeveloped properties in the |
|
(c) |
|
Represents a realized net derivative loss on settled convertible debt conversion options. |
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (continued)
Free cash flow ("FCF") is a non-GAAP financial measure. As used by the Company, FCF is defined as net cash provided by operating activities, adjusted for changes in operating assets and liabilities, less capital expenditures. The Company believes this non-GAAP measure is a financial indicator of the Company's ability to internally fund acquisitions, debt maturities, dividends and share repurchases after capital expenditures.
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
(in millions) |
||||||
Net cash provided by operating activities |
$ |
1,713 |
|
|
$ |
4,027 |
|
Changes in operating assets and liabilities |
|
231 |
|
|
|
59 |
|
Less: Capital expenditures (a) |
|
(1,202 |
) |
|
|
(2,396 |
) |
Free cash flow |
$ |
742 |
|
|
$ |
1,690 |
|
_____________ | ||
(a) |
Capital expenditures are calculated as follows: |
|
Three Months Ended
|
|
Six Months Ended
|
|||||||
|
(in millions) |
|||||||||
Costs incurred |
$ |
1,219 |
|
|
$ |
2,602 |
|
|||
Excluded items (a) |
|
(34 |
) |
|
|
(232 |
) |
|||
Other property, plant and equipment capital (b) |
|
17 |
|
|
|
26 |
|
|||
Capital expenditures |
$ |
1,202 |
|
|
$ |
2,396 |
|
_____________ | |||||
(a) |
Comprised of proved and unproved acquisition costs, asset retirement obligations and geological and geophysical general and administrative costs. |
||||
(b) |
Includes other property, plant and equipment additions related to water and power infrastructure. |
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTAL INFORMATION
Open Derivative Positions as of June 30, 2023
Commodity derivatives. As of June 30, 2023, the Company's outstanding commodity derivative contracts include 3,000 barrels of oil per day of Brent basis swaps for January 2024 through December 2024. The basis swap contracts fix the basis differential between the West Texas Intermediate ("WTI") index price (the price at which the Company buys
Marketing derivatives. The Company's marketing derivatives reflect long-term marketing contracts whereby the Company agreed to purchase and simultaneously sell, at an oil terminal in
The price the Company pays to purchase the oil volumes under the purchase contracts is based on a Midland WTI price and the price the Company receives for the oil volumes sold is a weighted average sales price that a non-affiliated counterparty receives for selling oil through a Gulf Coast storage and export facility at prices that are highly correlated with Brent oil prices during the same month of the purchase. Based on the form of the long-term marketing contracts, the Company accounts for the contracts as derivative instruments not designated as hedges.
Conversion option derivatives. In May 2020, the Company issued
PIONEER NATURAL RESOURCES COMPANY |
|||||||
UNAUDITED SUPPLEMENTAL INFORMATION (continued) |
|||||||
Derivative Gain (Loss), Net |
|||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
(in millions) |
||||||
Noncash changes in fair value: |
|
|
|
||||
Marketing derivative gain (loss), net |
$ |
20 |
|
|
$ |
(16 |
) |
Convertible debt conversion option derivative loss, net |
|
(2 |
) |
|
|
(2 |
) |
Total noncash derivative gain (loss), net |
|
18 |
|
|
|
(18 |
) |
|
|
|
|
||||
Cash payments on settled derivative instruments: |
|
|
|
||||
Marketing derivative payments |
|
(16 |
) |
|
|
(31 |
) |
Convertible debt conversion option derivative receipts (payments), net |
|
(3 |
) |
|
|
4 |
|
Total cash payments on settled derivative instruments, net |
|
(19 |
) |
|
|
(27 |
) |
Total derivative loss, net |
$ |
(1 |
) |
|
$ |
(45 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801423212/en/
Pioneer Natural Resources Company Contacts:
Investors
Greg Wright - 972-969-1770
Chris Leypoldt - 972-969-5834
Media and Public Affairs
Christina Voss - 972-969-5706
Source: Pioneer Natural Resources Company
FAQ
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