UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 23, 2002
PIONEER NATURAL RESOURCES COMPANY
-----------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 1-13245 75-2702753
------------------------------- ----------- ----------------------
(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File Number Identification Number)
5205 N. O'CONNOR BLVD., SUITE 1400, IRVING, TEXAS 75039
------------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (972) 444-9001
Not applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
PIONEER NATURAL RESOURCES COMPANY
TABLE OF CONTENTS
PAGE
----
Item 5. Other Events.......................................................... 3
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits:
(c) Exhibits.......................................................... 8
Item 9. Regulation FD Disclosure.............................................. 8
Signatures.................................................................... 10
Exhibit Index................................................................. 11
2
PIONEER NATURAL RESOURCES COMPANY
ITEM 5. OTHER EVENTS
On April 24, 2002, Pioneer Natural Resources Company ("Pioneer" or the
"Company") announced financial and operating results for the quarter ended March
31, 2002.
FIRST QUARTER 2002 RESULTS
Pioneer reported a net loss of $2.0 million, or $0.02 per share, for
the first quarter of 2002. The first quarter net loss included a noncash $5.4
million, or $0.05 per share, charge for the remeasurement of the Argentine peso
denominated net monetary assets. Earnings as adjusted for the above items were
$3.4 million or $0.03 per share. For the same period last year, Pioneer reported
net income of $67.9 million, or $0.68 per diluted share, which included a gain
on the sale of assets of $7.3 million, or $0.07 per share, and an $8.8 million,
or $0.09 per share, mark-to-market charge related to derivatives not treated as
hedges. Cash flow from operations for the 2002 first quarter was $50.0 million
compared to $131.7 million for the first quarter of 2001.
On March 31, 2002, Pioneer had 104.3 million common shares outstanding.
Pioneer issued 11.5 million new shares of common stock on April 22, 2002 under a
public offering at $21.50 per share, resulting in approximately $236 million of
net proceeds to the Company.
On an oil equivalent basis, sales averaged 110,703 barrels per day
(BPD). First quarter oil sales averaged 34,541 BPD, natural gas liquid sales
averaged 21,539 BPD and gas sales averaged 328 million cubic feet per day
(MMcfpd). Realized prices (including the effects of commodity price hedges) for
oil and natural gas liquids for the first quarter were $23.17 and $10.73 per
barrel, respectively. The realized price for gas was $2.47 per Mcf.
First quarter production costs averaged $5.12 per barrel oil equivalent
(BOE), decreasing 8% from the prior year quarter, primarily due to lower field
fuel and production taxes that are directly related to commodity price changes.
Exploration and abandonment costs of $21 million for the quarter included $10
million of geologic and geophysical costs including seismic costs, $1 million of
noncash leasehold abandonments including expired leases, and $10 million of
exploration costs including $8.6 million related to the expensing of the
Turnberry well drilled during the first quarter of 2001.
For the same quarter last year, Pioneer reported oil sales of 35,140
BPD, natural gas liquid sales of 20,426 BPD and gas sales of 333 MMcfpd.
Realized prices for the 2001 first quarter were $25.03 per barrel for oil,
$22.71 per barrel for natural gas liquids and $4.58 per Mcf for gas.
OPERATIONS UPDATE
Development activities continue in the U.S., Canada and South Africa.
Pioneer's "Big 4" development projects are progressing toward first production
over the next 13 months as previously announced. Pioneer and its partner,
Mariner Energy, Inc., have selected El Paso Energy Partners, L.P. (NYSE:EPN) to
construct, install, own and operate the production platform and other facilities
associated with the Falcon field discovery in the western deepwater Gulf of
Mexico. Pioneer is the operator of the Falcon field with a 75 percent working
interest, and the new platform is scheduled to be completed for first production
during the first quarter of 2003. Pioneer is evaluating and preparing several
prospects on the 24 blocks it holds surrounding the Falcon field for potential
drilling later this year.
In the central deepwater Gulf of Mexico, an appraisal well is currently
being drilled on the Ozona Deep discovery drilled in 2001, and Pioneer plans to
drill the Triton prospect near the infrastructure planned for the Devils Tower
development during the summer of 2002. Pioneer also plans to drill two appraisal
wells on the Company's Olowi Block in Gabon beginning in early May.
Onshore Texas, Pioneer is running three rigs and plans to increase its
drilling activity in its Spraberry oil and gas field and West Panhandle gas
field. Pioneer completed 21 wells in Canada during the 2002 winter drilling
season, and daily production from the new wells is anticipated to be
approximately 12 Mmcfpd.
3
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(Unaudited)
March 31, December 31,
2002 2001
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 16,757 $ 14,334
Accounts receivable 88,862 82,211
Inventories 11,974 14,549
Deferred income taxes 6,400 6,400
Other current assets 43,248 138,149
------------ ------------
Total current assets 167,241 255,643
------------ ------------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful efforts
method of accounting 3,971,409 3,879,568
Accumulated depletion, depreciation and amortization (1,143,441) (1,095,310)
------------ ------------
2,827,968 2,784,258
------------ ------------
Deferred income taxes 84,319 84,319
Other assets, net 83,722 146,833
------------ ------------
$ 3,163,250 $ 3,271,053
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 100,127 $ 99,165
Interest payable 37,115 37,410
Other current liabilities 76,867 91,634
------------ ------------
Total current liabilities 214,109 228,209
------------ ------------
Long-term debt 1,587,853 1,577,304
Other noncurrent liabilities 163,844 166,383
Deferred income taxes 5,633 13,768
Stockholders' equity 1,191,811 1,285,389
------------ ------------
$ 3,163,250 $ 3,271,053
============ ============
4
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended
March 31,
----------------------------
2002 2001
------------ ------------
Revenues:
Oil and gas $ 165,539 $ 257,986
Interest and other 1,193 5,167
Gain (loss) on disposition of assets, net (74) 7,293
------------ ------------
166,658 270,446
------------ ------------
Costs and expenses:
Oil and gas production 51,018 55,802
Depletion, depreciation and amortization - oil and gas 48,237 48,045
Depletion, depreciation and amortization - other 2,151 4,116
Exploration and abandonments 21,120 22,883
General and administrative 11,918 10,448
Interest 26,317 35,616
Other 8,266 25,217
------------ ------------
169,027 202,127
------------ ------------
Income (loss) before income taxes (2,369) 68,319
Income tax (provision) benefit 410 (400)
------------ ------------
Net income (loss) $ (1,959) $ 67,919
============ ============
Net income (loss) per share:
Basic $ (.02) $ .69
============ ============
Diluted $ (.02) $ .68
============ ============
Weighted average basic shares outstanding:
Basic 104,055 98,379
============ ============
Diluted 104,055 99,708
============ ============
5
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended
March 31,
----------------------------
2002 2001
------------ ------------
Cash flows from operations:
Net income (loss) $ (1,959) $ 67,919
Depletion, depreciation and amortization 50,388 52,161
Exploration expenses, including dry holes 18,666 21,847
Deferred income taxes (684) (4,800)
(Gain) loss on disposition of assets, net 74 (7,293)
Interest related amortization (992) 2,998
Derivative mark-to-market 124 8,753
Other noncash items 12,860 1,806
Changes in operating assets and liabilities:
Accounts receivable (13,721) 26,449
Inventories 2,239 1,124
Other current assets (7) (5,954)
Accounts payable (14,456) (25,607)
Interest payable (295) 720
Other current liabilities (2,201) (8,389)
------------ ------------
Net cash provided by operating activities 50,036 131,734
Net cash used in investing activities (38,772) (88,801)
Net cash used in financing activities (8,065) (50,548)
------------ ------------
Net increase (decrease) in cash and cash equivalents 3,199 (7,615)
Effect of exchange rate changes on cash
and cash equivalents (776) (239)
Cash and cash equivalents, beginning
of period 14,334 26,159
------------ ------------
Cash and cash equivalents, end of period $ 16,757 $ 18,305
============ ============
6
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
Three months ended
March 31,
-----------------------
2002 2001
---------- ----------
Average Daily Production:
Oil (Bbls) - U.S. 24,305 24,651
Argentina 10,126 9,646
Canada 110 843
---------- ----------
Total 34,541 35,140
Natural gas liquids (Bbls) - U.S. 19,919 18,922
Argentina 642 516
Canada 978 988
---------- ----------
Total 21,539 20,426
Gas (Mcf) - U.S. 215,837 208,678
Argentina 65,119 80,035
Canada 46,780 43,973
---------- ----------
Total 327,736 332,686
Total Production:
Oil (MBbls) 3,109 3,163
Natural gas liquids (MBbls) 1,939 1,838
Gas (MMcf) 29,496 29,942
Equivalent barrels (MBOE) 9,963 9,991
Average Price*:
Oil (per Bbl) - U.S. $ 24.27 $ 25.25
Argentina $ 20.61 $ 24.59
Canada $ 17.55 $ 23.83
Average $ 23.17 $ 25.03
Natural gas liquids (per Bbl) - U.S. $ 10.70 $ 22.51
Argentina $ 8.97 $ 27.04
Canada $ 12.41 $ 24.33
Average $ 10.73 $ 22.71
Gas (per Mcf) - U.S. $ 3.05 $ 5.61
Argentina $ .68 $ 1.25
Canada $ 2.27 $ 5.81
Average $ 2.47 $ 4.58
----------
* Average prices include the effects of commodity hedges.
7
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
12.1 Ratio of Earnings to Fixed Charges and Earnings to Fixed
Charges and Preferred Stock Dividends
99.1 News Release dated April 23, 2002
99.2 News Release dated April 24, 2002
ITEM 9. REGULATION FD DISCLOSURE
The information in this document includes 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 (the "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, international operations and
associated international political and economic instability, 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 2001 Annual Report on Form 10-K that is available
from the Company or the Securities and Exchange Commission.
Within this Current Report on Form 8-K, the following oil and gas terms
have specific meanings: "Bbl" means a standard barrel of 42 United States
gallons; "MMBtu" means one million British thermal units and is an energy
equivalent measure of natural gas; "Mcf" means one thousand cubic feet and is a
measure of natural gas volume; and, "NYMEX" means The New York Mercantile
Exchange.
On April 23, 2002 and April 24, 2002, the Company issued news releases.
The news releases are attached hereto as exhibits 99.1 and 99.2 and provide the
following information:
o a news release dated April 23, 2002 announcing the
completion of the Company's public offering of 11.5 million
shares of its common stock at $21.50 per share, including
1.5 million shares sold pursuant to the exercise of the
underwriters' over-allotment option. The news release also
announced that the $236 million of net proceeds from the
sale of these shares will be principally used to fund the
acquisition of additional interests in the Falcon field and
associated assets in the deepwater Gulf of Mexico and for
the acquisition of additional working interests and a
gathering system in the West Panhandle gas field. Pending
these uses of the net proceeds of the shares issued, the
Company will pay down its bank line of credit.
o a news release dated April 24, 2002 announcing the Company's
financial and operating results for the quarter ended March
31, 2002 and the Company's second quarter 2002 outlook based
on current expectations.
The following table summarizes, as of April 23, 2002, the Company's (i)
open oil hedge positions, (ii) open gas hedge positions and (iii) deferred gains
and losses on terminated commodity hedges. Deferred gains and losses on
terminated commodity hedges will be recognized as increases or decreases to oil
and gas revenues during the periods in which the hedges were originally
scheduled to mature.
8
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL COMMODITY HEDGE INFORMATION
AS OF APRIL 23, 2002
Open Oil Hedge Positions
2002 2003
---------------------------------- --------
Second Third Fourth
Quarter Quarter Quarter
-------- --------- ---------
DAILY OIL PRODUCTION:
SWAPS:
Existing Volume (Bbl)............ 8,000 8,000 5,000 2,975
NYMEX price...................... $ 26.35 $ 24.76 $ 24.45 24.02
New Volume (Bbl)................. 6,341 13,000 14,000 10,000
NYMEX price...................... $ 24.59 $ 23.34 $ 23.46 $ 24.13
COLLARS:
Volume (Bbl)..................... 6,000 -- -- --
NYMEX price:
Ceiling....................... $ 28.61
Floor......................... $ 25.00
Open Gas Hedge Positions
2006
and
2002 2003 2004 2005 2007
---------------------------------- -------- ------- -------- --------
Second Third Fourth
Quarter Quarter Quarter
--------- --------- ---------
DAILY GAS PRODUCTION:
SWAPS:
Existing Volume (Mcf)............ 140,000 190,000 190,000 -- 55,000 30,000 --
NYMEX Price* (MMBtu)............. $ 4.35 $ 4.25 $ 4.25 -- $ 3.70 $ 3.70 --
New Volume (Mcf)................. - - - 150,000 50,000 50,000 10,000
NYMEX Price* (MMBtu)............. $ 3.70 $ 3.60 $ 3.70 $ 3.70
COLLARS:
Existing Volume (Mcf)............ 20,000 20,000 20,000 -- -- -- --
NYMEX Price* (MMBtu):
Ceiling....................... $ 6.00 $ 6.00 $ 6.00
Floor......................... $ 4.50 $ 4.50 $ 4.50
New Volume (Mcf)................. 50,000 83,152 100,000 -- -- -- --
NYMEX Price* (MMBtu):
Ceiling....................... $ 3.10 $ 3.20 $ 3.20
Floor......................... $ 2.45 $ 2.50 $ 2.50
Deferred Gains (Losses) on Terminated Commodity Hedges (in thousands)
2002 2003 2004 2005
-------------------------------------- ---------- ---------- ----------
Second Third Fourth
Quarter Quarter Quarter
---------- ---------- ----------
OIL** ........ $ 1,640 $ -- $ -- $ -- $ -- $ --
GAS** ........ (11,516) (11,643) (11,643) 72,546 43,230 1,220
---------- ---------- ---------- ---------- ---------- ----------
$ (9,876) $ (11,643) $ (11,643) $ 72,546 $ 43,230 $ 1,220
========== ========== ========== ========== ========== ==========
* Approximate, based on historical differentials to index prices.
** Cash has been paid on deferred hedge losses and received on deferred hedge
gains except for the following: (i) a $1.6 million receivable for the 2002
oil hedge gains, (ii) a $6.6 million payable for certain 2002 gas hedge
losses and (iii) a $1.3 million receivable for certain of the 2003 gas
hedge gains.
9
PIONEER NATURAL RESOURCES COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PIONEER NATURAL RESOURCES COMPANY
Date: April 25, 2002 By: /s/ RICH DEALY
--------------------------------------------
Rich Dealy
Vice President and Chief Accounting Officer
10
PIONEER NATURAL RESOURCES COMPANY
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
12.1* Ratio of Earnings to Fixed Charges and Earnings to
Fixed Charges and Preferred Stock Dividends
99.1* News Release dated April 23, 2002
99.2* News Release dated April 24, 2002
----------
* filed herewith
11