Thursday April 30, 8:07 am Eastern Time
Company Press Release
Pioneer Reports a First Quarter Loss of $0.27 Per Share Which Includes a
Previously Announced Reorganization Charge of $0.11 Per Share
DALLAS--(BUSINESS WIRE)--April 30, 1998--Pioneer Natural Resources Company (''Pioneer'') (NYSE:PXD - news;
TSE:PXD - news) reported a first quarter 1998 net loss of $26.8 million or $0.27 per share. First quarter results include a
previously announced after-tax reorganization charge of $11.2 million or $0.11 per share. The reorganization includes reducing
domestic operating divisions from six to three and divesting non-strategic assets to reduce the Company's cost structure and
improve long-term profitability. For the same period last year, Pioneer reported net income of $18.6 million or $0.50 per share.
Cash flow from operations for the first quarter was $69.1 million compared to $73.5 million for the first quarter of 1997.
Scott Sheffield, President and Chief Executive Officer, stated, ''With oil prices down 30% or over $6.00 per barrel versus
1997, our first quarter results were adversely impacted. However, Pioneer is well positioned for potential future improvement in
oil prices. Today, for every $1.00 per barrel change in oil and natural gas liquids prices, quarterly earnings change by about
$0.05 per share and quarterly cash flow changes by about $0.08 per share.''
First quarter oil sales averaged 62,146 barrels per day (BPD) and natural gas liquids sales were 28,106 BPD. Natural gas sales
in the first quarter were 489 million cubic feet per day (MMCFPD). On a combined basis, oil equivalent sales averaged
171,790 BPD. These volumes reflect the divestiture of properties with combined production of about 4,200 oil equivalent BPD
associated with the previously announced property sales in December 1997. First quarter realized prices for oil and natural gas
liquids were $13.97 and $11.12 per barrel, respectively. Realized price for natural gas was $2.07 per thousand cubic feet
(MCF).
For the same quarter last year, Pioneer reported oil sales of 31,912 BPD and natural gas sales of 208 MMCFPD. Realized
prices for the 1997 first quarter were $19.99 per barrel for oil and $2.47 per MCF for natural gas. In last year's first quarter,
Pioneer aggregated sales of natural gas and natural gas liquids, therefore, separate results are not available.
Operations Update
With the recent volatility in commodity prices, Pioneer has implemented a flexible capital expenditure program allowing
management to be responsive to ever-changing conditions. With the decline in oil prices and the flush-production nature of many
of its oil development projects, the Company has elected to postpone a significant part of its oil development. Company-wide
rig count has dropped from about 40 rigs in January to around 20 rigs today. The majority of the reduction relates to rigs drilling
for oil. Despite the declining rig count, the Company continues to benefit from its active gas development program.
In the Dorsal area of the Neuquen Basin in Argentina where Pioneer's working interest approximates 100%, Pioneer has drilled
30 wells to date during 1998. Of these, 22 of the 25 successful wells are on production at a combined rate of 3,300 oil
equivalent BPD, and the Company anticipates that gas sales will increase by 7 MMCFPD in early June when new gathering
facilities are completed. An additional 30 wells are planned for the remainder of 1998.
Pioneer has concluded its winter-access program in the Chinchaga gas field in Northeast British Columbia, Canada. The
Company drilled 19 development wells and 6 delineation wells and installed a 50 MMCFPD gas processing facility and
gathering system. The gas processing facility began production on April 15 with a total of 30 wells tied into the production
system. Production is anticipated to increase by 25 MMCFPD and 625 BPD (condensate and NGL) to 35 MMCFPD and
875 BPD. Pioneer has an 87% working interest in the project.
In the 100% owned Timbalier Bay field in South Louisiana, four new wells and one recompletion resulted in new production of
1,400 BPD and 1.2 MMCFPD. Pioneer continues to evaluate this large oil field with 3-D seismic data to unlock additional
development and large-scale exploration opportunities. In the Lopeno field in South Texas, Pioneer completed six new wells
increasing production more than 30 MMCFPD. Up to ten additional development wells are planned in this field during the
remainder of 1998.
Pioneer has also completed two infill development wells in the Bear Creek field, a water flood unit in Dunn County, North
Dakota. The two new wells are producing at a combined rate of over 2,000 BPD and 1 MMCFPD. The field was discovered
in 1982, and water flooding commenced in 1992. Pioneer is the operator of the unit with a 74% working interest.
President's Comment
''I am pleased with the results of our focus on the cost structure of Pioneer. As compared with the 1997 fourth quarter,
operating costs dropped to $3.56 per barrel oil equivalent (BOE) from $4.07 per BOE. Oil and gas depreciation, depletion and
amortization charges were reduced to $4.73 per BOE from $6.44 per BOE. Upon completion of the divestiture anticipated in
the fourth quarter of this year, general and administrative costs should be reduced to approximately $1.00 per BOE and interest
costs are expected to average $1.75 per BOE. The total improvementact to the Company's cost structure is expected to be
around $3.00 per BOE by the end of the year,'' stated Mr. Sheffield.
Headquartered in Dallas, Pioneer is one of the largest independent (non-integrated) exploration and production oil and gas
companies in North America, with major operations in the United States, Canada and Argentina.
Except for historical information contained herein, the statements in this Press 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 Pioneer Natural Resources Company, are subject to a number of risks and
uncertainties which 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 oil and gas prices, product supply and
demand, competition, government regulation or action, litigation, the costs and results of drilling and operations, the Company's
ability to replace reserves or implement its business plans, access to and cost of capital, uncertainties about estimates of
reserves, quality of technical data, and environmental risks. These and other risks are described in the Company's 10-K and
10-Q Reports and other filings with the Securities and Exchange Commission. |
