Pioneer Natural Reso
Delayed Nyse - 09/21 10:03:40 pm

PIONEER NATURAL RESOURCES CO : Results of Operations and Financial Condition, Regulation FD Disclosure (form 8-K)

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04/17/2018 | 02:04 pm

Item 2.02. Results of Operations and Financial Condition

Explanatory note: Pioneer Natural Resources Company and its subsidiaries
("Pioneer" or the "Company") presents in this Item 2.02 certain information
regarding the impact of changes in the fair values of derivative instruments on
its results of operations for the three months ended March 31, 2018 and certain
other information regarding its derivative instruments.

The following table summarizes the net derivative losses that the Company
expects to report in its earnings for the three months ended March 31, 2018:

(in millions)
Three Months Ended March 31,

Noncash changes in fair value:

Oil derivative losses $ (126 )
NGL derivative gains 1
Gas derivative losses (16 )
Marketing derivative gains 5
Total noncash derivative losses, net (136 )

Net cash payments on settled derivative instruments:

Oil derivative payments (74 )
Gas derivative receipts 2
Total cash derivative payments on settled derivative
instruments, net (72 )
Total derivative losses, net $ (208 )


Item 7.01 Regulation FD Disclosure

Oil, NGL and gas price derivatives. The following table presents the Company's
open commodity oil, NGL and gas derivative positions as of April 16, 2018:

Second Third Fourth Year Ending
Quarter Quarter Quarter December 31, 2019
Average Daily Oil Production Associated with
Derivatives (Bbl):
Collar contracts:
Volume 3,000 3,000 3,000 -
NYMEX price:
Ceiling $ 58.05 $ 58.05 $ 58.05 $ -
Floor $ 45.00 $ 45.00 $ 45.00 $ -
Collar contracts with short puts:
Volume 149,000 154,000 159,000 65,000
NYMEX price:
Ceiling $ 57.79 $ 57.70 $ 57.62 $ 60.74
Floor $ 47.42 $ 47.34 $ 47.26 $ 52.69
Short put $ 37.38 $ 37.31 $ 37.23 $ 42.69
Average Daily NGL Production Associated with
Ethane basis swap contracts (a):
Volume (MMBtu) 6,920 6,920 6,920 6,920
Price differential ($/MMBtu) $ 1.60 $ 1.60 $ 1.60 $ 1.60
Average Daily Gas Production Associated with
Derivatives (MMBtu):
Swap contracts:
Volume 100,000 100,000 100,000 -
NYMEX price $ 3.00 $ 3.00 $ 3.00 $ -
Collar contracts with short puts:
Volume 50,000 50,000 50,000 -
NYMEX price:
Ceiling $ 3.40 $ 3.40 $ 3.40 $ -
Floor $ 2.75 $ 2.75 $ 2.75 $ -
Short put $ 2.25 $ 2.25 $ 2.25 $ -
Basis swap contracts:
Permian Basin index swap volume (b) - 50,000 50,000 37,397
Price differential ($/MMBtu) $ - $ (1.50 ) $

(1.50 ) $ (1.50 )
Southern California index swap volume (c) 40,000 80,000 66,522

Price differential ($/MMBtu) $ 0.30 $ 0.30 $

0.50 $ 0.33


(a) The ethane basis swap contracts reduce the price volatility of ethane

forecasted for sale by the Company at Mont Belvieu, Texas-posted prices.

The ethane basis swaps fix the basis differential on a NYMEX Henry Hub
("HH") MMBtu equivalent basis. The Company will receive the NYMEX Henry
Hub price plus the price differential on 6,920 MMBtu per day, which is
equivalent to 2,500 Bbls per day of ethane.

(b) The referenced basis swap contracts fix the basis differentials between

the index price at which the Company sells its Permian Basin gas and the
NYMEX HH index price used in swap contracts and collar contracts with
short puts.

(c) The referenced basis swap contracts fix the basis differentials between

Permian Basin index prices and southern California index prices for
Permian Basin gas forecasted for sale in southern California.


Marketing derivatives. Periodically, the Company enters into buy and sell
marketing arrangements to fulfill firm pipeline transportation commitments.
Associated with these marketing arrangements, the Company may enter into index
swap contracts to mitigate price risk.

The following table presents the Company's open marketing derivative positions
as of April 16, 2018:
Second Third
Quarter Quarter
Average Daily Oil Transportation Commitments Associated with
Derivatives (Bbl):
Basis swap contracts:
Louisiana Light Sweet index swap volume (a) 10,000


Price differential ($/Bbl) $ 3.18 $ 3.18
Magellan East Houston index swap volume (a) 8,659 2,022
Price differential ($/Bbl) $ 3.29 $ 3.30


(a) The referenced basis swap contracts fix the basis differentials between

NYMEX WTI and Louisiana Light Sweet or Magellan East Houston oil prices

for Permian Basin oil forecasted for sale in the Gulf Coast region.

Cautionary Statement Concerning Forward-Looking Statements

Except for historical information contained herein, the statements in this
Current Report on Form 8-K 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 the Company are
subject to a number of risks and uncertainties that 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 commodity prices, product supply and demand, competition, the
ability to obtain environmental and other permits and the timing thereof, other
government regulation or action, the ability to obtain approvals from third
parties and negotiate agreements with third parties on mutually acceptable
terms, completion of planned divestitures, litigation, the costs and results of
drilling and operations, availability of equipment, services, resources and
personnel required to perform the Company's drilling and operating activities,
access to and availability of transportation, processing, fractionation,
refining and export facilities, Pioneer's ability to replace reserves, implement
its business plans or complete its development activities as scheduled, access
to and cost of capital, the financial strength of counterparties to Pioneer's
credit facility, investment instruments and derivative contracts and the
purchasers of Pioneer's oil, NGL and gas production, uncertainties about
estimates of reserves and resource potential, identification of drilling
locations and the ability to add proved reserves in the future, the assumptions
underlying production forecasts, quality of technical data, environmental and
weather risks, including the possible impacts of climate change, cybersecurity
risks, ability to implement planned stock repurchases, the risks associated with
the ownership and operation of the Company's industrial sand mining and oilfield
services businesses and acts of war or terrorism. These and other risks are
described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and other filings with the Securities and Exchange Commission. In addition,
the Company may be subject to currently unforeseen risks that may have a
materially adverse impact on it. Accordingly, no assurances can be given that
the actual events and results will not be materially different than the
anticipated results described in the forward-looking statements. The Company
undertakes no duty to publicly update these statements except as required by


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