About Pioneer Natural Resources Company

Oil and gas explorer Pioneer Natural Resources' frontier is not on the Western prairies, but below ground in the oil and gas basins of West Texas and a gas basin in the Southern Rocky Mountains. The large independent exploration and production company boasts proved reserves of more than 725 million barrels of oil equivalent. The vast majority of the company's reserves are found in Texas (primarily in the oil rich and relatively low cost Permian Basin oil fields) and in Colorado (the Raton gas field). Pioneer Natural Resources has stakes in nearly 10,000 net producing wells.

Operations

Irving, Texas-based Pioneer's single operating segment engages in oil, NGL (natural gas liquids), and gas exploration and production, primarily in the Spraberry/Wolfcamp oilfield in the Permian Basin in West Texas which holds some 75% of the company's total proved oil and gas reserves. It employs oil drilling and hydraulic fracturing techniques.

Its development areas are the liquid-rich Eagle Ford Shale field in South Texas, the Raton gas field in Southern Colorado, the West Panhandle gas and liquids field in the Texas panhandle, and the Edwards gas field in South Texas.

Its 11,000-plus gross producing wells mine about 85 million barrels of oil each year.

Sales and Marketing

Pioneer has a number of significant customers. Vitol accounts for about 20% of its total revenue; Plains Marketing and Occidental Energy Marketing account for more than 15% each, and Enterprise Products Partners accounts for more than 10%.

Financial Performance

In fiscal 2016 Pioneer's total revenue fell by $1 billion to $3.8 billion due to a net loss of $161 million on derivatives trading versus a gain of $879 million the previous year. Derivatives aside, Pioneer's core oil and gas sales defied industry wide-trends and grew 11% to $2.4 billion due to higher sales volumes in both oil and gas. Oil sales volumes increased 27% and gas 13%, offsetting lower oil prices.

The company lost $556 million in 2016, an increase on the $273 loss in the previous year. The worse result stems from the loss on derivatives results, lower gains on asset sales, and a $95 million increase in depletion, depreciation, and amortization expense. These negative factors were partially offset by a decrease in impairment charges of $1.0 billion and a $248 million increase in income tax benefit.

Cash from operations grew 20% to $1.5 billion due to higher oil and gas revenue, lower operating costs, and a decrease in funds used to satisfy working capital obligations.

Strategy

Unlike many of its competitors, Pioneer has low debt levels and has been able to continue investing proactively during the oil price downturn that pushed many of its peers into the deep end.

It is developing a water distribution system to support its continued field development. Pioneer has begun purchasing some 100 thousand barrels per day of effluent water from the City of Odessa and has signed an agreement with the City of Midland to purchase effluent water upon completion of a new water treatment facility. The company expects to spend $160 million in 2017 mostly on its field-wide water distribution network, which is expected to provide significant future cost savings and support its long-term growth plan in the Spraberry/Wolfcamp area.

Pioneer has also kept up its drilling operations during the downturn, drilling 464 gross (368 net) development wells in the three years up to end-2016. All of the wells were successfully completed as productive wells, at a total drilling cost of $2.9 billion.

Mergers and Acquisitions

In August 2016 Pioneer Natural Resources acquired 28,000 net acres in the Midland Basin from Devon Energy for $435 million. The acquisition will help Pioneer increase its horizontal rig count by five rigs from 12 rigs to 17 rigs in the northern Spraberry/Wolfcamp play.

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Pioneer Natural Resources Company

5205 N O'Connor Blvd Ste 200
Irving, TX 75039
Phone: 1 (972) 444-9001
Fax: 1 (972) 571-5063

Stats

  • Employer Type: Public
  • Stock Symbol: PXD
  • Stock Exchange: NYSE
  • President, CEO, and Director: Timothy L. Dove
  • President, CEO, and Director: Timothy L. Dove
  • Chairman: Scott D. Sheffield
  • 2016 Employees: 3,604

Major Office Locations

  • Irving, TX

Other Locations

  • Bakersfield, CA
  • Los Angeles, CA
  • Riverside, CA
  • San Juan Capistrano, CA
  • Colorado Springs, CO
  • Trinidad, CO
  • Glenford, OH
  • Howard, OH
  • Alvord, TX
  • Brady, TX
  • Midkiff, TX
  • Midland, TX
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