Oil and gas explorer Pioneer Natural Resources' frontier is not in the Western prairies, but below them, and below the Rocky Mountains, the Midcontinent, West Texas, South Texas, and elsewhere. The large independent exploration and production company reported proved reserves of about 845.3 million barrels of oil equivalent in 2013. The vast majority of the company's reserves are found within the US (including in Alaska, where the company was the first independent explorer to produce from a North Slope oilfield). Its main assets are in Texas. It has stakes in more than 10,710 net producing wells.
The company maintains offices in Anchorage, Alaska; Denver, Colorado; and Midland, Texas. In Texas it has operations in the liquid-rich Eagle Ford Shale, Hugoton, and West Panhandle fields; and the Raton gas field; and the Spraberry oil field.
In 2013 Pioneer Natural Resources drilled 1,850 gross (1,655 net) development wells, 99% of which were successfully completed as productive wells (for a total drilling cost of $4.8 billion).
Sales and Marketing
In 2013 Plains Marketing accounted for 26% of Pioneer Natural Resources' revenues; Enterprise Products Partners, 12%; and Occidental Energy Marketing, 12%.
The company’s revenues have been restated due to the divestiture of properties, including Pioneer Alaska, the Barnett Shale field in North Texas, Sendero (Pioneer Natural Resources' vertical drilling rig subsidiary) and Southern Wolfcamp. In 2013 the company’s revenues rose by 24% due to higher oil and gas revenues thanks to 22% and 20% increases in oil and NGL sales volumes, respectively, and 2% and 32% increases in oil and gas prices, respectively. Partially offsetting this was a decline of 11% in NGL prices.
It experienceda huge net income drop of 77% in 2012 due to higher operating expenses; depletion, depreciation, and amortization expenses rose due to higher drilling expenditures on proved undeveloped locations (primarily in the Spraberry field); and declines in proved gas reserves due to lower gas prices. The downward trend continued in 2013 when Pioneer Natural Resources posted a net loss of $838.4 million compared to net income of $192.3 million in 2012 due to a major increase in operating costs as a result of impairment of oil and gas properties.
In 2013 the company’s operating cash inflow increased to $2.15 billion (from $1.84 billion in 2012) primarily due to an increase in oil and gas sales, partially offset by a decrease in net cash receipts from derivative settlements.
Pioneer Natural Resources' revenues come from its US operations where the oil firm focuses on exploiting low-risk, long-lived basins. It is also selling non-core properties to pay down debt.
Securing funding to expand its drilling program, and to pay down debt, in 2014 the company sold its Hugoton field assets in Kansas to Linn Energy for $340 million. That year, Pioneer Natural Resources also sold its Alaska subsidiary to Caelus Energy Alaska LLC for $300 million.
In 2013 it sold its Barnett Shale assets in North Texas to an undisclosed private party for cash proceeds of $155 million.
In 2013 Pioneer Natural Resources sold a 40% stake in 207,000 net acres leased in Wolfcamp Shale play (Permian Basin) in the southern portion of the Spraberry Trend Area Field to Sinochem for $1.7 billion.
Mergers and Acquisitions
In 2013 Pioneer Natural Resources Company acquired 52%-owned Pioneer Southwest Energy Partners L.P., which then became a wholly-owned subsidiary of Pioneer Natural Resources USA through a stock-for-unit exchange.