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 799.5 million barrels of oil equivalent in 2014. 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.
The company has only one reportable operating segment -- oil and gas exploration and production. In 2014 Pioneer Natural Resources drilled 1,423 gross (1,242 net) development wells, 99% of which were successfully completed as productive wells (for a total drilling cost of $4.9 billion).
Sales and Marketing
In 2014 Plains Marketing accounted for 24% of Pioneer Natural Resources' revenues; Occidental Energy Marketing, 13%; and Enterprise Products Partners, 11%.
The company's revenues have grown steadily since 2010.
In 2014 Pioneer Natural Resources' revenues increased by 36% due to higher sales of purchased oil and gas and net derivative gains. The increase in net derivatives was primarily as a result of changes in forward commodity prices and changes in the company's portfolio of derivatives.
That year the net income of the company increased by 211% thanks to the absence of impairment of oil and gas properties charges and about $1 billion of income from continuing operations before income taxes.
Net cash provided by the operating activities increased by 10% in 2014 due to higher net income and a change in income tax receivables.
Pioneer Natural Resources' revenues come from its US operations where the oil firm focuses on exploiting low-risk, long-lived basins. The strategies employed to achieve this mission are predicated on maintaining financial flexibility, capital allocation discipline and enhancing net asset value through accretive drilling programs, joint ventures, and acquisitions. It also pursues derivative arrangements covering a portion of its oil, NGL and gas production.
The company 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 2014, the company completed the sale of its majority interest in Sendero Drilling for $31 million, and sold proved and unproved properties in Gaines and Dawson counties in the Spraberry field in West Texas for $72 million. It also sold its interest in unproved oil and gas properties adjacent to the company's West Panhandle field operations for $38 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.
During 2014, 2013 and 2012, Pioneer Natural Resources sold other proved and unproved properties, inventory and other property and equipment and recorded net gains of $4 million, $5 million and $3 million, respectively.
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.