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About Pioneer Natural Resources Company

Pioneer Natural Resources Company explores for and produces oil, gas, and NGLs in the Permian Basin of West Texas. With some 680,000 net acres containing proved reserves of 1,136 million barrels of oil equivalent, this independent energy company is one the biggest energy producers in the Permian Basin. Pioneer's production comes mostly from its Spraberry/Wolfcamp oil field The company reports around 5,961 net producing wells. Additionally, the company owns interests in 11 gas processing plants, including the related gathering systems.. Its major customers include Sunoco Logistics Partners, Occidental Energy Marketing, and Plains Marketing.

Operations

Pioneer's single operating segment engages in oil and gas development, exploration and production, primarily in the Spraberry/Wolfcamp oilfield in the Permian Basin. This oilfield holds 95% (developed) of Pioneer's total proved oil and gas reserves (1,136 million barrels of oil equivalent). It employs oil drilling and hydraulic fracturing techniques to develop horizontal wells.

Pioneer's oil and gas generates approximately 50% of the company's revenue. Its sales of purchased oil & gas (roughly 50% of sales) enters into pipeline capacity commitments in order to secure available oil, NGL and gas transportation capacity. Derivative gain and interest and other generates the remaining.

Geographic Reach

Pioneer, headquartered are in Irving, Texas, holds 680,000 net acres in the Permian Basin in Texas with most of its wells located in the Spraberry/Wolfcamp oil field.

Sales and Marketing

Pioneer has entered into purchase transactions with third parties and separate sale transactions with third parties to diversify a portion of the Company's oil and gas sales to Gulf Coast refineries, LNG facilities and international export markets. The company sells its oil production at the lease and the sales contracts governing such oil production are tied directly to, or are correlated with, New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) oil prices. Its three largest customers are Sunoco Logistics Partners L.P. (about 35% of Pioneer's revenue), Occidental Energy Marketing Inc. (approximately 20%) and Plains Marketing L.P. (roughly 15%).

Financial Performance

Pioneer's revenue increased from $2.8 billion in 2015 to $3.5 billion in 2016 due to the commodity price downturn, only to shoot back up to $9.4 billion by 2018 following the oil price recovery. In the last five years, the company's net income has followed a similar trend: it fell from a negative $ 273 million in 2015 before recovering back to healthy profits in the following two years. The company's revenue declined from $978 million in 2018 to $756 million in 2019.

Revenue decreased by 1% in 2019 to $9.3 billion compared to $9.4 billion in 2018.

Net income declined to $756 million in 2019 from $978 million in 2018. The primary components of the $222 million decrease in earnings attributable to common stockholders include: a decrease in the gain (loss) on disposition of assets; an increase in DD&A expense; a decrease in net sales of purchased oil and gas due to a decrease in downstream oil margins on the company's Gulf Coast refinery and export sales; restructuring charges associated with the company's corporate restructuring program and changes in forward commodity prices and the cash settlement of derivative positions.

The company's cash and cash equivalents declined by $120 million, ending 2019 with $705 million on hand. Cash from operations decreased by 4% to $3.1 billion in 2019 compared to $3.2 billion in 2018, while cash from investing used $2.4 billion. Financing activities used $788 million, mainly for purchases of treasury stock.

Strategy

Pioneer wants to be America's leading independent energy company, focused on value, safety, the environment, technology and its greatest asset, its people.

The company's long-term growth strategy is centered on a few strategic objectives. To ensure financial flexibility, the company maintains a strong balance sheet. It also includes delivering economic production and reserve growth through drilling completion and production improvement activities; utilizing free cash flow to investors through a combination of dividends and share repurchases; developing and training employees and contractors to perform their jobs in a safe manner; and stewarding the environment through industry leading sustainable development efforts. Pioneer's long-term strategy is anchored by the company's interests in the long-lived Spraberry/Wolfcamp oil field located in the Permian Basin in West Texas, which has an estimated remaining productive life in excess of 50 years.

To mitigate the effect of commodity price volatility on the company's net cash provided by operating activities and its net asset value, support the company's annual capital budgeting and expenditure plans and reduce commodity price risk associated with certain capital projects, the company enters into derivative arrangements covering a portion of its oil, NGL and gas production.

In 2019, Pioneer divested its other assets. The company completed the sale of certain vertical and horizontal wells and approximately 4,500 undeveloped acres in Glasscock County of the Permian Basin to an unaffiliated third party for net cash proceeds of $64 million. The company recorded a gain of $10 million associated with the sale. In the same year, the company completed the sale of certain vertical wells and approximately 3,300 undeveloped acres in Martin County of the Permian Basin to an unaffiliated third party for net cash proceeds of $65 million. The company recorded a gain of $57 million associated with the sale. The company also sold its Eagle Ford assets and other remaining assets in South Texas (the South Texas Divestiture) to an unaffiliated third party in exchange for total consideration having an estimated fair value of $210 million.

Company Background

Pioneer traces its roots back to 1962 when two Texas oilmen, Howard Parker and Joe Parsley, decided to drill in the US Permian Basin. The company, Parker & Parsley, quickly gained a reputation for assembling exploration acreage and expanding its drilling activity through conservative hedges and aggressive deals. In 1997, looking to expand into the natural gas business, Parker and Parsley merged with MESA Inc. and changed its name to Pioneer Natural Resources.  

Pioneer Natural Resources Company

777 Hidden RDG
Irving, TX 75038-3802
Phone: 1 (972) 444-9001

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: PXD
Stock Exchange: , NYSE
EVP and CFO: Richard P. Dealy
President, CEO, and Director: Timothy L. Dove
Chairman: Scott D. Sheffield
Employees (This Location): 401
Employees (All Locations): 2,323

Major Office Locations

Irving, TX

Other Locations

Bakersfield, CA
Riverside, CA
San Juan Capistrano, CA
Trinidad, CO
Glenford, OH
Howard, OH
Brady, TX
Irving, TX
Midkiff, TX
Midland, TX