EARNINGS / Pioneer Reports a First Quarter Loss of $0.27 Per
Share Which Includes a Previously Announced Reorganization
Charge of $0.11 Per Share
NYSE, TSE SYMBOL: PXD
APRIL 30, 1998
DALLAS, TEXAS--Pioneer Natural Resources Company ("Pioneer")
(NYSE:PXD) (TSE:PXD) 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 percent 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 percent, 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 percent working
interest in the project.
In the 100 percent 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 percent 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.
/T/
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
1998 1997
------------- ------------
(Unaudited)
ASSETS
Current assets $ 306,244 $ 308,188
Oil and gas properties 4,203,393 4,121,045
Accumulated depletion,
depreciation and amortization (686,782) (605,203)
Deferred income taxes 47,100 --
Other assets, net 135,454 122,560
---------- ----------
$4,005,409 $3,946,590
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 236,259 $ 261,552
Long-term debt 2,099,155 1,943,718
Other noncurrent liabilities 165,017 180,275
Deferred income taxes -- 12,200
Stockholders' equity 1,504,978 1,548,845
---------- ----------
$4,005,409 $3,946,590
========== ==========
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three Months Ended
March 31,
------------------
1998 1997
------------------
Revenues:
Oil and gas $ 197,369 $ 103,779
Interest and other 1,178 2,153
Gain on disposition of assets, net 10 775
---------- ----------
198,557 106,707
Costs and expenses:
Oil and gas production 55,142 24,713
Depletion, depreciation and
amortization -- oil and gas 73,154 27,006
Depletion, depreciation and
amortization -- other 3,096 1,624
Exploration and abandonments 23,949 7,615
General and administrative 20,025 6,720
Reorganization 17,177 --
Interest 39,478 9,895
Other 6,780 421
---------- ----------
238,801 77,994
---------- ----------
Income (loss) before income taxes (40,244) 28,713
Income tax benefit (provision) 13,400 (10,100)
---------- ----------
Net income (loss) $ (26,844) $ 18,613
========== ==========
Net income (loss) per share:
Basic $ (.27) $ .53
========== ==========
Diluted $ (.27) $ .50
========== ==========
Dividends declared per share $ .05 $ .05
========== ==========
Weighted average shares outstanding 100,545 35,048
========== ==========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended
March 31,
------------------
1998 1997
------------------
Cash flows from operations:
Net income (loss) $ (26,844) $ 18,613
Depletion, depreciation and
amortization 76,250 28,630
Exploration expenses, including
dry holes 15,834 6,023
Deferred income taxes (12,700) 8,800
Gain on disposition of assets, net (10) (775)
Other noncash items 13,137 447
Net changes in operating assets
and liabilities, net of effects
from acquisitions and dispositions 3,384 11,725
---------- ----------
Net cash provided by operations 69,051 73,463
Net cash used in investing (186,724) (67,876)
Net cash provided by (used in)
financing 120,112 (14,873)
---------- ----------
Net increase (decrease) in cash
and cash equivalents 2,439 (9,286)
Cash and cash equivalents,
beginning of period 71,713 18,711
---------- ----------
Cash and cash equivalents,
end of period $ 74,152 $ 9,425
========== ==========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
Three Months Ended
March 31,
------------------
1998 1997
------------------
Average Daily Production:
Oil (Bbls) -- U.S. 42,952 31,536
Canada 9,835 --
Argentina 9,359 376
------- -------
Total 62,146 31,912
Natural gas
liquids (Bbls) -- U.S. 26,814 /a
Canada 693 --
Argentina 599 --
------- -------
Total 28,106 /a
Gas (Mcf) -- U.S. 388,890 208,173
Canada 39,703 --
Argentina 60,632 --
------- -------
Total 489,225 208,173
Total Production:
Oil (Mbbls) -- 5,593 2,872
Natural gas liquids (Mbbls) -- 2,529 /a
Gas (Mmcf) -- 44,030 18,736
Equivalent barrels (MBOE) -- 15,461 5,995
Average Price:
Oil --
U.S. 15.08 19.94
Canada 11.82 --
Argentina 11.16 23.86
Average 13.97 19.99
Natural gas
liquids --
U.S. 11.03 /a
Canada 12.01 --
Argentina 14.09 --
Average 11.12 /a
Gas --
U.S. 2.28 2.47
Canada 1.46 --
Argentina 1.11 --
Average 2.07 2.47
/a Sales of natural gas and natural gas liquids were aggregated.
Separate results are not available.
/T/
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