Pioneer Natural Resources Company (NYSE:PXD) ("Pioneer"
or "the Company") today reported financial and operating results
for the quarter ended September 30, 2023. Pioneer reported third
quarter net income attributable to common shareholders of $1.3
billion, or $5.41 per diluted share. These results include the
effects of noncash mark-to-market adjustments and certain other
unusual items. Excluding these items, non-GAAP adjusted income for
the third quarter was $1.4 billion, or $5.83 per diluted share.
Cash flow from operating activities for the third quarter was $2.1
billion.
Third Quarter
Highlights
- Third quarter oil production averaged 377 thousand barrels
of oil per day (MBOPD), at the top end of quarterly
guidance
- Third quarter total production averaged 721 thousand barrels
of oil equivalent per day (MBOEPD), near the top end of quarterly
guidance
- Generated strong third quarter free cash flow1 of $1.2
billion
- Declared a quarterly base-plus-variable dividend of $3.20
per share
Updated Full-Year 2023
Guidance
- Increased the midpoints of full-year 2023 oil and total
production guidance with ranges of 370 to 373 MBOPD and 708 to 713
MBOEPD, respectively
- Decreased full-year 2023 drilling, completions, facilities
and water infrastructure capital guidance2 to $4.375 billion to
$4.475 billion
- Lowered full-year 2023 capital guidance for exploration,
environmental and other capital to $150 million
Financial Highlights
Pioneer maintains a strong balance sheet, with net debt of $4.8
billion as of September 30, 2023. The Company had $2.1 billion of
liquidity, comprised of $98 million of cash on hand and a $2.0
billion unsecured credit facility (undrawn) as of September 30,
2023.
During the third quarter, the Company's total capital
expenditures2 totaled $1.1 billion.
Cash flow from operating activities during the third quarter was
$2.1 billion, leading to free cash flow1 of $1.2 billion when
adjusted for changes in operating assets and liabilities and
deducting capital expenditures.
For the fourth quarter of 2023, the Company's Board of Directors
has declared a quarterly base-plus-variable dividend of $3.20 per
share, comprised of a $1.25 base dividend and $1.95 variable
dividend. This represents a total annualized dividend yield of
5.4%3. As outlined in the recently announced merger agreement with
ExxonMobil, the fourth quarter variable dividend component
represents 75% of the variable dividend as calculated under
Pioneer's dividend policy. Additionally, the first quarter of 2024
variable dividend component is expected to represent 50% of the
variable dividend as calculated under Pioneer's dividend policy4.
Quarterly dividends subsequent to the first quarter of 2024 are
expected to be comprised solely of the $1.25 per share base
dividend component4 under Pioneer’s dividend policy until the
merger closing date.
Pursuant to the merger agreement, Pioneer will not repurchase
shares of its stock prior to the merger closing date.
Financial Results
For the third quarter of 2023, the average realized price for
oil was $81.33 per barrel. The average realized price for natural
gas liquids (NGLs) was $24.79 per barrel, and the average realized
price for gas was $2.48 per thousand cubic feet. These prices
exclude the effects of derivatives.
Production costs, including taxes, averaged $11.58 per barrel of
oil equivalent (BOE). Depreciation, depletion and amortization
(DD&A) expense averaged $10.97 per BOE. Exploration and
abandonment expense was $18 million. General and administrative
(G&A) expense was $87 million. Interest expense was $44
million. The net cash flow impact related to purchases and sales of
oil and gas, including firm transportation, was a gain of $19
million. Other expense was $25 million. Current income tax
provision was $248 million. The Company's effective tax rate was
22% for the quarter.
Operations Update
Pioneer's continued operational excellence in the Midland Basin
enabled the Company to place 95 horizontal wells on production
during the third quarter of 2023. More than 100 wells with lateral
lengths of 15,000 feet or greater were placed on production during
the first three quarters of 2023. These longer-lateral wells have
contributed to Pioneer’s strong results. 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 35% higher than a
comparable 10,000-foot lateral well. In total, the Company has over
1,000 future locations with 15,000-foot lateral lengths in its
drilling inventory.
During the third quarter, Pioneer benefited from its utilization
of three simulfrac fleets and two localized sand mines.
Additionally, the Company transitioned 100% of its completions
fleets to either electric or dual-fuel powered and progressed its
electrification efforts through the successful execution of
drilling and completions trials utilizing grid-supplied
electricity.
Pioneer’s strong operational results support the Company’s
annual production growth framework of approximately 5% and 8% for
oil and total production, respectively.
Guidance
Due to the pending merger with ExxonMobil, Pioneer has
discontinued providing quarterly guidance. Accordingly, investors
are cautioned not to rely on historical forward-looking statements
regarding guidance as those forward-looking statements were the
estimates of management only as of the date provided and were
subject to the specific risks and uncertainties that accompanied
such forward-looking statements.
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.
For more details, see Pioneer's 2023 Sustainability Report at
www.pxd.com/sustainability.
Earnings Conference Call
Due to the pending merger with ExxonMobil, Pioneer will not host
a conference call or webcast to discuss its third quarter 2023
results.
About Pioneer
Pioneer is a large independent oil and gas exploration and
production company, headquartered in Dallas, Texas, with operations
in the United States. For more information, visit www.pxd.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 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 in Ukraine and
the Middle East) and related political instability on economic
activity and oil and gas supply and demand; competition; the
ability to obtain drilling, environmental and other permits and the
timing thereof; the effect of future regulatory or legislative
actions on Pioneer or the industry in which it operates, including
potential changes to tax laws; the ability to obtain approvals from
third parties and negotiate agreements with third parties on
mutually acceptable terms; potential liability resulting from
pending or future litigation; the costs, including the potential
impact of cost increases due to inflation and supply chain
disruptions, and results of development and operating activities;
the impact of a widespread outbreak of an illness, such as the
COVID-19 pandemic, on global and U.S. economic activity, oil and
gas demand, and global and U.S. supply chains; the risk of new
restrictions with respect to development activities, including
potential changes to regulations resulting in limitations on the
Company's ability to dispose of produced water; availability of
equipment, services, resources and personnel required to perform
the Company's development and operating activities; access to and
availability of transportation, processing, fractionation,
refining, storage and export facilities; Pioneer's ability to
replace reserves, implement its business plans or complete its
development activities as scheduled; the risk that the transaction
between Pioneer and Exxon Mobil Corporation ("ExxonMobil") may not
be completed on anticipated terms and timing, or at all, including
obtaining regulatory approvals that may be required on anticipated
terms and Pioneer stockholder approval; the possibility that any of
the anticipated benefits of the transaction will not be realized or
will not be realized within the expected time period; the risk that
disruptions from the transaction will harm Pioneer's business,
including current plans and operations and that management's time
and attention will be diverted on transaction-related issues;
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the transaction;
potential litigation relating to the transaction that could be
instituted against Pioneer or its directors; the Company's ability
to achieve its emissions reductions, flaring and other ESG goals;
access to and cost of capital; the financial strength of (i)
counterparties to Pioneer's credit facility, (ii) issuers of
Pioneer's investment securities and (iii) purchasers of Pioneer's
oil, NGL and gas production and downstream sales of purchased
commodities; uncertainties about estimates of reserves,
identification of drilling locations and the ability to add proved
reserves in the future; the assumptions underlying forecasts,
including forecasts of production, operating cash flow, well costs,
capital expenditures, rates of return, expenses, and cash flow from
downstream purchases and sales of oil and gas, net of firm
transportation commitments; tax rates; quality of technical data;
environmental and weather risks, including the possible impacts of
climate change on the Company's operations and demand for its
products; cybersecurity risks; the risks associated with the
ownership and operation of the Company's water services business
and acts of war or terrorism. These and other risks are described
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2022 and other filings with the United States
Securities and Exchange Commission. In addition, the Company may be
subject to currently unforeseen risks that may have a materially
adverse effect on it. Accordingly, no assurances can be given that
the actual events and results will not be materially different than
the anticipated results described in the forward-looking
statements. The Company undertakes no duty to publicly update these
statements except as required by law.
Footnote 1: Third 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
expenditures2. See the supplemental schedules for a reconciliation
of third quarter 2023 free cash flow to the comparable GAAP
number.
Footnote 2: Excludes acquisitions, asset retirement obligations,
capitalized interest, geological and geophysical G&A,
information technology, corporate facilities and vehicles.
Footnote 3: Calculated by dividing the Company's annualized
third quarter 2023 total dividend per share by the Company's
closing share price on October 30, 2023.
Footnote 4: 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, which will depend on a
number of factors beyond the Company's control, including commodity
prices.
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.
Important Information about the Transaction and Where to Find
It
In connection with the proposed transaction between ExxonMobil
and Pioneer, ExxonMobil and Pioneer will file relevant materials
with the Securities and Exchange Commission (the “SEC”), including
a registration statement on Form S-4 filed by ExxonMobil that will
include a proxy statement of Pioneer that also constitutes a
prospectus of ExxonMobil. A definitive proxy statement/prospectus
will be mailed to stockholders of Pioneer. This communication is
not a substitute for the registration statement, proxy statement or
prospectus or any other document that ExxonMobil or Pioneer (as
applicable) may file with the SEC in connection with the proposed
transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION,
INVESTORS AND SECURITY HOLDERS OF EXXONMOBIL AND PIONEER ARE URGED
TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the
registration statement and the proxy statement/prospectus (when
they become available), as well as other filings containing
important information about ExxonMobil or Pioneer, without charge
at the SEC’s Internet website (http://www.sec.gov). Copies of the
documents filed with the SEC by ExxonMobil will be available free
of charge under the tab “SEC Filings” on the “Investors” page of
ExxonMobil’s internet website at www.exxonmobil.com or by
contacting ExxonMobil’s Investor Relations Department at
investor.relations@exxonmobil.com. Copies of the documents filed
with the SEC by Pioneer will be available free of charge on
Pioneer’s internet website at
https://investors.pxd.com/investors/financials/sec-filings/. The
information included on, or accessible through, ExxonMobil’s or
Pioneer’s website is not incorporated by reference into this
communication.
Participants in the Solicitation
ExxonMobil, Pioneer, their respective directors and certain of
their respective executive officers may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive
officers of Pioneer is set forth in its proxy statement for its
2023 annual meeting of stockholders, which was filed with the SEC
on April 13, 2023, in its Form 10-K for the year ended December 31,
2022, which was filed with the SEC on February 23, 2023, in its
Form 8-K filed on May 30, 2023, in its Form 8-K filed on April 26,
2023 and in its Form 8-K filed on February 13, 2023. Information
about the directors and executive officers of ExxonMobil is set
forth in its proxy statement for its 2023 annual meeting of
stockholders, which was filed with the SEC on April 13, 2023, in
its Form 10-K for the year ended December 31, 2022, which was filed
with the SEC on February 22, 2023, in its Form 8-K filed on June 6,
2023 and in its Form 8-K filed on February 24, 2023. Additional
information regarding the participants in the proxy solicitations
and a description of their direct or indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials filed with the
SEC when they become available.
No Offer or Solicitation
This communication is for informational purposes and is not
intended to, and shall not, constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any offer, solicitation or
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
PIONEER NATURAL RESOURCES
COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions)
September 30, 2023
December 31, 2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
98
$
1,032
Accounts receivable, net
1,850
1,853
Inventories
496
424
Investment in affiliate
176
172
Prepaids and other
165
245
Total current assets
2,785
3,726
Oil and gas properties, using the
successful efforts method of accounting
48,024
44,473
Accumulated depletion, depreciation and
amortization
(16,876
)
(14,843
)
Total oil and gas properties, net
31,148
29,630
Other property and equipment, net
1,639
1,658
Operating lease right-of-use assets
376
340
Goodwill
242
243
Other assets
170
143
$
36,360
$
35,740
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
2,670
$
2,637
Interest payable
16
33
Income taxes payable
43
63
Current portion of debt
44
779
Derivatives
158
44
Operating leases
156
125
Other
196
206
Total current liabilities
3,283
3,887
Long-term debt
4,880
4,125
Derivatives
152
96
Deferred income taxes
4,231
3,867
Operating leases
245
236
Other liabilities
850
988
Equity
22,719
22,541
$
36,360
$
35,740
PIONEER NATURAL RESOURCES
COMPANY
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share
data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues and other income:
Oil and gas
$
3,460
$
4,224
$
9,603
$
12,794
Sales of purchased commodities
1,681
1,833
4,695
6,416
Interest and other income (loss), net
52
(12
)
59
57
Derivative gain (loss), net
(190
)
13
(235
)
(187
)
Gain on disposition of assets, net
1
35
23
105
5,004
6,093
14,145
19,185
Costs and expenses:
Oil and gas production
564
562
1,506
1,457
Production and ad valorem taxes
205
260
598
755
Depletion, depreciation and
amortization
728
641
2,087
1,874
Purchased commodities
1,662
1,968
4,789
6,502
Exploration and abandonments
18
8
56
32
General and administrative
87
90
259
252
Accretion of discount on asset retirement
obligations
4
4
12
12
Interest
44
30
114
100
Other
25
36
93
118
3,337
3,599
9,514
11,102
Income before income taxes
1,667
2,494
4,631
8,083
Income tax provision
(366
)
(510
)
(1,006
)
(1,719
)
Net income attributable to common
shareholders
$
1,301
$
1,984
$
3,625
$
6,364
Net income per share attributable to
common shareholders:
Basic
$
5.56
$
8.29
$
15.47
$
26.36
Diluted
$
5.41
$
7.93
$
14.96
$
25.11
Weighted average shares outstanding:
Basic
233
239
234
241
Diluted
240
250
242
253
PIONEER NATURAL RESOURCES
COMPANY
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Cash flows from operating activities:
Net income
$
1,301
$
1,984
$
3,625
$
6,364
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion, depreciation and
amortization
728
641
2,087
1,874
Exploration expenses
—
—
1
6
Deferred income taxes
118
202
341
1,248
Gain on disposition of assets, net
(1
)
(35
)
(23
)
(105
)
Loss on early extinguishment of debt
—
—
—
47
Accretion of discount on asset retirement
obligations
4
4
12
12
Interest expense
3
2
8
7
Derivative-related activity
151
(135
)
169
(95
)
Amortization of share-based
compensation
20
20
70
59
Investment valuation adjustments
(40
)
32
(4
)
(17
)
Other
28
28
112
69
Changes in operating assets and
liabilities:
Accounts receivable
(337
)
406
1
(253
)
Inventories
(49
)
186
(73
)
(55
)
Other assets
(46
)
(52
)
5
(96
)
Accounts payable
216
(348
)
(126
)
(260
)
Interest payable
(31
)
(19
)
(17
)
(32
)
Income taxes payable
18
8
(20
)
—
Other liabilities
(11
)
27
(69
)
(23
)
Net cash provided by operating
activities
2,072
2,951
6,099
8,750
Net cash used in investing activities
(1,067
)
(846
)
(3,533
)
(2,911
)
Net cash used in financing activities
(998
)
(3,368
)
(3,500
)
(8,401
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
7
(1,263
)
(934
)
(2,562
)
Cash, cash equivalents and restricted
cash, beginning of period
91
2,585
1,032
3,884
Cash, cash equivalents and restricted
cash, end of period
$
98
$
1,322
$
98
$
1,322
PIONEER NATURAL RESOURCES
COMPANY
UNAUDITED SUMMARY PRODUCTION,
PRICE AND MARGIN DATA
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Average Daily Sales Volumes:
Oil (Bbls)
377,304
354,043
369,289
352,421
Natural gas liquids ("NGLs") (Bbls)
182,219
162,372
176,988
158,529
Gas (Mcf)
971,736
841,005
948,437
809,076
Total (BOE)
721,479
656,582
704,350
645,796
Average Prices:
Oil per Bbl
$
81.33
$
94.23
$
76.53
$
99.72
NGLs per Bbl
$
24.79
$
38.09
$
24.77
$
41.20
Gas per Mcf
$
2.48
$
7.58
$
2.67
$
6.41
Total per BOE
$
52.13
$
69.93
$
49.94
$
72.57
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Margin Data ($ per BOE):
Average price
$
52.13
$
69.93
$
49.94
$
72.57
Production costs
(8.50
)
(9.31
)
(7.83
)
(8.27
)
Production and ad valorem taxes
(3.08
)
(4.31
)
(3.11
)
(4.28
)
$
40.55
$
56.31
$
39.00
$
60.02
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 shareholders, the Company's basic net income per share
attributable to common shareholders is computed as (i) net income
attributable to common shareholders, (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 shareholders is computed as (i) basic net
income attributable to common shareholders, (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 shareholders, securities or other contracts
to issue common shares would be dilutive to loss per share;
therefore, conversion into common shares is assumed not to
occur.
The Company's net income attributable to common shareholders is
reconciled to basic and diluted net income attributable to common
shareholders as follows:
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net income attributable to common
shareholders
$
1,301
$
1,984
$
3,625
$
6,364
Participating share-based earnings
(3
)
(4
)
(5
)
(11
)
Basic net income attributable to common
shareholders
1,298
1,980
3,620
6,353
Adjustment to after-tax interest expense
to reflect the dilutive impact attributable to convertible senior
notes
1
1
3
5
Diluted net income attributable to common
shareholders
$
1,299
$
1,981
$
3,623
$
6,358
Basic weighted average shares
outstanding
233
239
234
241
Convertible senior notes dilution
7
11
8
12
Diluted weighted average shares
outstanding
240
250
242
253
Net income per share attributable to
common shareholders:
Basic
$
5.56
$
8.29
$
15.47
$
26.36
Diluted
$
5.41
$
7.93
$
14.96
$
25.11
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 September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net income
$
1,301
$
1,984
$
3,625
$
6,364
Depletion, depreciation and
amortization
728
641
2,087
1,874
Exploration and abandonments
18
8
56
32
Accretion of discount on asset retirement
obligations
4
4
12
12
Interest expense
44
30
114
100
Income tax provision
366
510
1,006
1,719
Gain on disposition of assets, net
(1
)
(35
)
(23
)
(105
)
Loss on early extinguishment of debt
—
—
—
47
Derivative-related activity
151
(135
)
169
(95
)
Amortization of share-based
compensation
20
20
70
59
Investment valuation adjustments
(40
)
32
(4
)
(17
)
Other
28
28
112
69
EBITDAX (a)
2,619
3,087
7,224
10,059
Cash interest expense
(41
)
(28
)
(106
)
(93
)
Current income tax provision
(248
)
(308
)
(665
)
(471
)
Discretionary cash flow (b)
2,330
2,751
6,453
9,495
Cash exploration expense
(18
)
(8
)
(55
)
(26
)
Changes in operating assets and
liabilities
(240
)
208
(299
)
(719
)
Net cash provided by operating
activities
$
2,072
$
2,951
$
6,099
$
8,750
_____________
(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; amortization of noncash
share-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 shareholders 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 shareholders (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 shareholders 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 September
30, 2023
After-tax
Amounts
Per Diluted
Share
(in millions)
Net income attributable to common
shareholders
$
1,301
$
5.41
Noncash MTM adjustments:
ProPetro investment gain ($40 million
pretax)
(31
)
(0.13
)
Derivative loss, net ($151 million
pretax)
118
0.49
Adjusted income excluding noncash MTM
adjustments
1,388
5.77
Unusual items:
Net loss on settlement of convertible debt
conversion option derivatives ($18 million pretax)
14
0.06
Adjusted income excluding noncash MTM
adjustments and unusual items
$
1,402
$
5.83
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 September
30, 2023
Nine Months Ended September
30, 2023
(in millions)
Net cash provided by operating
activities
$
2,072
$
6,099
Changes in operating assets and
liabilities
240
299
Less: Capital expenditures (a)
(1,105
)
(3,501
)
Free cash flow
$
1,207
$
2,897
_____________
(a)
Capital expenditures are calculated as follows:
Three Months Ended September
30, 2023
Nine Months Ended September
30, 2023
(in millions)
Costs incurred
$
1,125
$
3,727
Excluded items (a)
(41
)
(273
)
Other property, plant and equipment
capital (b)
21
47
Capital expenditures
$
1,105
$
3,501
_____________
(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 September 30, 2023
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 Midland,
Texas, (i) 50 thousand barrels of oil per day beginning January 1,
2021 and ending December 31, 2026, (ii) 40 thousand barrels of oil
per day beginning May 1, 2022 and ending April 30, 2027 and (iii)
30 thousand barrels of oil per day beginning August 1, 2022 and
ending July 31, 2027.
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
$1.3 billion principal amount of convertible senior notes due 2025
(the "Convertible Notes"). Certain holders of the Convertible Notes
have exercised their conversion options per the terms of the notes
indenture. The Company elected to settle the conversions in cash,
with settlement occurring 25 trading days from the notice of
conversion (the "Settlement Period"). The Company's election to
settle an exercised conversion option in cash results in a forward
contract during the Settlement Period that is accounted for as a
derivative instrument not designated as a hedge. As of September
30, 2023, $44 million of the principal amount of the Company's
Convertible Notes remained in the Settlement Period.
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED SUPPLEMENTAL INFORMATION (continued) Derivative
Gain (Loss), Net
Three Months Ended September
30, 2023
Nine Months Ended September
30, 2023
(in millions)
Noncash changes in fair value:
Marketing derivative loss, net
$
(155
)
$
(170
)
Convertible debt conversion option
derivative gain, net
4
1
Total noncash derivative loss, net
(151
)
(169
)
Cash payments on settled derivative
instruments:
Marketing derivative payments
(21
)
(52
)
Convertible debt conversion option
derivative payments, net
(18
)
(14
)
Total cash payments on settled derivative
instruments, net
(39
)
(66
)
Total derivative loss, net
$
(190
)
$
(235
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102470945/en/
Pioneer Natural Resources Company Contacts:
Investors Greg Wright - 972-969-1770 Chris Leypoldt -
972-969-5834 Trevor Long - 972-598-8579 Media and Public
Affairs media@pxd.com
Grafico Azioni Pioneer Natural Resources (NYSE:PXD)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Pioneer Natural Resources (NYSE:PXD)
Storico
Da Gen 2024 a Gen 2025
