EARNINGS / Pioneer Natural Resources Company - Substantial
Production Growth Offset by Low Commodity Prices Result
in Loss for Third Quarter
TSE, NYSE SYMBOL: PXD
OCTOBER 27, 1998
DALLAS, TEXAS--Pioneer Natural Resources Company ("Pioneer")
reported a third quarter 1998 net loss of $43.9 million or $0.44
per share. For the same period last year, Pioneer reported a net
loss of $12.6 million or $0.21 per share. Cash flow from
operations for the third quarter was $106.1 million compared to
$54.5 million for the third quarter of 1997.
Third quarter oil sales averaged 57,556 barrels per day (BPD) and
natural gas liquids sales were 29,588 BPD. Natural gas sales in
the third quarter averaged 515 million cubic feet per day
(MMCFPD). On an oil equivalent basis, sales averaged 172,998 BPD.
While production volumes for the quarter were negatively impacted
by four tropical storms in the Gulf of Mexico, volumes increased
by 56 percent over volumes in the third quarter of 1997. This
increase was primarily attributable to last year's acquisition of
Chauvco Resources and the volumes added through Pioneer's
successful drilling programs related to the properties acquired in
this acquisition.
Third quarter realized price for oil declined 28 percent from the
prior year quarter to $12.97 per barrel. Realized price for
natural gas liquids declined 36 percent to $8.30 per barrel.
Realized price for natural gas declined 20 percent from the prior
year quarter to $1.73 per thousand cubic feet (MCF).
For the same quarter last year, Pioneer reported oil sales of
39,913 BPD, natural gas liquid sales of 12,511 BPD, and natural
gas sales of 351 MMCFPD. Realized prices for the 1997 third
quarter were $17.93 per barrel for oil, $12.89 per barrel for
natural gas liquids, and $2.16 per MCF for natural gas.
Nine Month Results
For the nine months ended September 30, 1998, Pioneer reported a
net loss of $103.6 million or $1.04 per share, including a
previously announced after-tax reorganization charge of $13.8
million or $0.14 per share. For the same period last year, Pioneer
reported net income of $13.5 million or $0.31 per share. Cash flow
from operations for the nine-month period was $266.5 million
compared to $179.1 million for the same period in 1997. Nine-month
oil sales averaged 60,471 BPD and natural gas liquids sales were
29,274 BPD. Natural gas sales were 508 MMCFPD. On an oil
equivalent basis, sales averaged 174,392 BPD. Nine-month realized
price for oil declined 29 percent from the prior year period to
$13.34 per barrel. Realized price for natural gas liquids declined
27 percent to $9.42 per barrel. Realized price for natural gas
declined 15 percent to $1.87 per MCF.
For the first three quarters of 1997, Pioneer reported oil sales
of 34,524 BPD, natural gas liquids sales of 4,216 BPD, and natural
gas sales of 261 MMCFPD. Realized prices for the 1997 nine-month
period were $18.70 per barrel for oil, $12.89 per barrel for
natural gas liquids, and $2.21 per MCF for natural gas.
President's Comment
"In this environment of low commodity prices, Pioneer's strategy
is focused on efficiency, enhancing our reserve base, and
long-term growth. We have significantly reduced our cost structure
and plan additional cost reductions. The previously announced
divestiture of non-strategic properties is expected to close in
December, reducing our outstanding debt and related interest costs
by almost 20 percent. As drilling costs continue to decline, our
finding costs significantly improve."
"Cash flow from our long-lived reserves allows us to continue to
invest in the highest-return exploitation projects, moderate
exploration opportunities and core area acquisitions. The Company
also continues to repurchase its shares with purchases to date
exceeding 500,000 shares. By prudently allocating available
capital, we expect to enhance our reserve base in this low price
environment while moving ahead with Pioneer's long-term growth
strategy," stated Scott D. Sheffield, President and CEO.
Headquartered in Dallas, Pioneer is one of the largest independent
exploration and production oil and gas companies in North America,
with major operations in the United States, Canada, Argentina and
South Africa.
Financial statements attached.
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/
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Revenues:
Oil and gas $ 173,462 $ 150,354 $ 554,478 $ 348,980
Interest and other 5,868 816 8,191 3,649
Gain (loss) on disposition
of assets, net (461) 108 (136) 2,745
------- ------- ------- -------
178,869 151,278 562,533 355,374
Costs and expenses:
Oil and gas production 57,753 42,003 169,508 91,674
Depletion, depreciation
and amortization --
oil and gas 83,537 65,131 237,063 121,303
Depletion, depreciation
and amortization --
Other 3,613 2,257 10,145 5,594
Exploration and
abandonments 35,627 15,513 86,149 34,310
General and
administrative 19,236 16,779 56,648 31,769
Reorganization 609 -- 21,158 --
Interest 41,822 24,110 122,317 44,264
Other 4,874 2,533 18,500 2,982
------- ------- ------- -------
247,071 168,326 721,488 331,896
------- ------- ------- -------
Income (loss) before income
taxes and extraordinary
item (68,202) (17,048) (158,955) 23,478
Income tax benefit
(provision) 24,300 6,000 55,400 (8,500)
------- ------- ------- -------
Income (loss) before
extraordinary item (43,902) (11,048) (103,555) 14,978
Extraordinary item--(loss)
on early Extinguishment
of debt, net of tax -- (1,518) -- (1,518)
------- ------- ------- -------
Net income (loss) $ (43,902) $ (12,566) $(103,555) $ 13,460
------- ------- ------- -------
------- ------- ------- -------
Net income (loss) per share:
Basic:
Income (loss) before
extraordinary item $ (.44) $ (.18) $ (1.04) $ .34
Extraordinary item -- (.03) -- (.03)
------- ------- ------- -------
Net income (loss) $ (.44) $ (.21) $ (1.04) $ .31
------- ------- ------- -------
------- ------- ------- -------
Diluted:
Income (loss) before
extraordinary item $ (.44) $ (.18) $ (1.04) $ .34
Extraordinary item -- (.03) -- (.03)
------- ------- ------- -------
Net income (loss) $ (.44) $ (.21) $ (1.04) $ .31
------- ------- ------- -------
------- ------- ------- -------
Dividends declared per
share $ .05 $ .05 $ .10 $ .10
------- ------- ------- -------
------- ------- ------- -------
Weighted average shares
outstanding $ 99,939 $ 59,543 $ 99,982 $ 43,453
------- ------- ------- -------
------- ------- ------- -------
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
September 30, December 31,
1998 1997
---- ----
ASSETS
Current Assets $ 238,494 $ 308,188
Oil and gas properties 4,364,453 4,121,045
Accumulated depletion,
depreciation and amortization (847,496) (605,203)
Deferred income taxes 102,200 --
Other assets, net 134,975 122,560
--------- ---------
$ 3,992,626 $ 3,946,590
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $ 227,333 $ 261,552
Long-term debt 2,164,259 1,943,718
Other noncurrent liabilities 176,596 180,275
Deferred income taxes -- 12,200
Stockholders' equity 1,424,438 1,548,845
--------- ---------
$ 3,992,626 $ 3,946,590
--------- ---------
--------- ---------
CASH FLOW SUPPLEMENT
(in thousands)
(Unaudited)
Three months Nine months
ended ended
September 30, September 30,
1998 1997 1998 1997
-------- -------- -------- --------
Cash flows from operations:
Net income (loss) $ (43,902) $ (12,566) $(103,555) $ 13,460
Depletion, depreciation
and amortization 87,150 67,388 247,208 126,897
Exploration and
abandonments 35,627 15,513 86,149 34,310
Deferred income
taxes (24,600) (4,800) (53,000) 6,600
(Gain) loss on
disposition of
assets, net 461 (108) 136 (2,745)
Other noncash items 12,232 10,720 38,045 12,900
---------- ---------- ---------- ----------
Discretionary
cash flow 66,968 76,147 214,983 191,422
Working capital
and other changes 39,120 (21,672) 51,525 (12,354)
---------- ---------- ---------- ----------
Net cash provided by
operations 106,088 54,475 266,508 179,068
Net cash used in
investing (100,291) (86,161) (432,070) (244,133)
Net cash provided by
financing 18,846 62,474 164,239 86,985
---------- ---------- ---------- ----------
Effect of exchange
rate changes on cash
and cash equivalents (51) -- (105) --
Net increase (decrease)
in cash and cash
equivalents 24,643 30,788 (1,323) 21,920
Cash and cash
equivalents, beginning
of period 45,693 9,843 71,713 18,711
---------- ---------- ---------- ----------
Cash and cash
equivalents, end of
period $ 70,285 $ 40,631 $ 70,285 $ 40,631
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
SUMMARY PRODUCTION AND PRICE DATA
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Average Daily
Production:
Oil(Bbls)-- US 40,717 39,510 42,374 34,116
Canada 8,761 -- 9,387 --
Argentina 8,078 403 8,710 408
-------- -------- -------- --------
Total 57,556 39,913 60,471 34,524
Natural gas
liquids (Bbls)--US 28,146 12,511 27,900 4,216
Canada 821 -- 756 --
Argentina 621 -- 618 --
-------- -------- -------- --------
Total 29,588 12,511 29,274 4,216
Gas (Mcf)-- US 371,757 351,380 386,378 261,114
Canada 58,793 -- 50,328 --
Argentina 84,570 -- 71,178 --
-------- -------- -------- --------
Total 515,120 351,380 507,884 261,114
Total
Production:
Oil (Mbbls) 5,295 3,672 16,509 9,425
Natural Gas
Liquids
(Mbbls) 2,722 1,151 7,992 1,151
Gas (Mmcf) 47,391 32,327 138,652 71,284
Equivalent
barrels
(MBOE) 15,916 10,211 47,609 22,457
Average Price:
Oil-- US $ 13.71 $ 17.93 $ 14.20 $ 18.69
Canada 10.56 -- 11.30 --
Argentina 11.88 18.36 11.37 19.96
Average 12.97 17.93 13.34 18.70
Natural gas
liquids-- US $ 8.31 $ 12.89 $ 9.38 $ 12.89
Canada 7.84 -- 9.84 --
Argentina 8.24 -- 10.86 --
Average 8.30 12.89 9.42 12.89
Gas-- US $ 1.94 $ 2.16 $ 2.07 $ 2.21
Canada 1.35 -- 1.37 --
Argentina 1.09 -- 1.10 --
Average 1.73 2.16 1.87 2.21 |
