ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 75-2702753 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5205 N. O'Connor Blvd., Suite 200, Irving, Texas | 75039 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
Page | ||
• | "Bbl" means a standard barrel containing 42 United States gallons. |
• | "BOE" means a barrel of oil equivalent and is a standard convention used to express oil and gas volumes on a comparable oil equivalent basis. Gas equivalents are determined under the relative energy content method by using the ratio of six thousand cubic feet of gas to one Bbl of oil or natural gas liquid. |
• | "BOEPD" means BOE per day. |
• | "Btu" means British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit. |
• | "Conway" means the daily average natural gas liquids components as priced in Oil Price Information Service ("OPIS") in the table "U.S. and Canada LP – Gas Weekly Averages" at Conway, Kansas. |
• | "DD&A" means depletion, depreciation and amortization. |
• | "GAAP" means accounting principles that are generally accepted in the United States of America. |
• | "LIBOR" means London Interbank Offered Rate, which is a market rate of interest. |
• | "Mcf" means one thousand cubic feet and is a measure of gas volume. |
• | "MMBtu" means one million Btus. |
• | "Mont Belvieu" means the daily average natural gas liquids components as priced in OPIS in the table "U.S. and Canada LP – Gas Weekly Averages" at Mont Belvieu, Texas. |
• | "NGL" means natural gas liquid. |
• | "NYMEX" means the New York Mercantile Exchange. |
• | "Pioneer" or the "Company" means Pioneer Natural Resources Company and its subsidiaries. |
• | "Proved reserves" mean the quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. |
• | "U.S." means United States. |
• | With respect to information on the working interest in wells, drilling locations and acreage, "net" wells, drilling locations and acres are determined by multiplying "gross" wells, drilling locations and acres by the Company's working interest in such wells, drilling locations or acres. Unless otherwise specified, wells, drilling locations and acreage statistics quoted herein represent gross wells, drilling locations or acres. |
• | Unless otherwise indicated, all currency amounts are expressed in U.S. dollars. |
September 30, 2017 | December 31, 2016 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 636 | $ | 1,118 | ||||
Short-term investments | 1,357 | 1,441 | ||||||
Accounts receivable: | ||||||||
Trade, net | 649 | 517 | ||||||
Due from affiliates | — | 1 | ||||||
Income taxes receivable | 1 | 3 | ||||||
Inventories | 187 | 181 | ||||||
Derivatives | 43 | 14 | ||||||
Other | 28 | 23 | ||||||
Total current assets | 2,901 | 3,298 | ||||||
Property, plant and equipment, at cost: | ||||||||
Oil and gas properties, using the successful efforts method of accounting: | ||||||||
Proved properties | 19,630 | 18,566 | ||||||
Unproved properties | 558 | 486 | ||||||
Accumulated depletion, depreciation and amortization | (8,841 | ) | (8,211 | ) | ||||
Total property, plant and equipment | 11,347 | 10,841 | ||||||
Long-term investments | 151 | 420 | ||||||
Goodwill | 270 | 272 | ||||||
Other property and equipment, net | 1,683 | 1,529 | ||||||
Derivatives | 7 | — | ||||||
Other assets, net | 106 | 99 | ||||||
$ | 16,465 | $ | 16,459 |
September 30, 2017 | December 31, 2016 | |||||||
(Unaudited) | ||||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable: | ||||||||
Trade | $ | 1,015 | $ | 741 | ||||
Due to affiliates | 90 | 134 | ||||||
Interest payable | 38 | 68 | ||||||
Current portion of long-term debt | 449 | 485 | ||||||
Derivatives | 17 | 77 | ||||||
Other | 106 | 61 | ||||||
Total current liabilities | 1,715 | 1,566 | ||||||
Long-term debt | 2,282 | 2,728 | ||||||
Derivatives | 12 | 7 | ||||||
Deferred income taxes | 1,475 | 1,397 | ||||||
Other liabilities | 384 | 350 | ||||||
Equity: | ||||||||
Common stock, $.01 par value; 500,000,000 shares authorized; 173,794,108 and 173,221,845 shares issued as of September 30, 2017 and December 31, 2016, respectively | 2 | 2 | ||||||
Additional paid-in capital | 8,957 | 8,892 | ||||||
Treasury stock at cost: 3,628,843 and 3,497,742 shares as of September 30, 2017 and December 31, 2016, respectively | (250 | ) | (218 | ) | ||||
Retained earnings | 1,882 | 1,728 | ||||||
Total equity attributable to common stockholders | 10,591 | 10,404 | ||||||
Noncontrolling interests in consolidated subsidiaries | 6 | 7 | ||||||
Total equity | 10,597 | 10,411 | ||||||
Commitments and contingencies | ||||||||
$ | 16,465 | $ | 16,459 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues and other income: | ||||||||||||||||
Oil and gas | $ | 855 | $ | 643 | $ | 2,433 | $ | 1,665 | ||||||||
Sales of purchased oil and gas | 721 | 444 | 1,722 | 1,062 | ||||||||||||
Interest and other | 17 | 7 | 44 | 21 | ||||||||||||
Derivative gains (losses), net | (133 | ) | 91 | 153 | (95 | ) | ||||||||||
Gain on disposition of assets, net | — | 1 | 205 | 4 | ||||||||||||
1,460 | 1,186 | 4,557 | 2,657 | |||||||||||||
Costs and expenses: | ||||||||||||||||
Oil and gas production | 152 | 141 | 440 | 438 | ||||||||||||
Production and ad valorem taxes | 53 | 32 | 152 | 97 | ||||||||||||
Depletion, depreciation and amortization | 355 | 386 | 1,033 | 1,123 | ||||||||||||
Purchased oil and gas | 735 | 458 | 1,769 | 1,113 | ||||||||||||
Impairment of oil and gas properties | — | — | 285 | 32 | ||||||||||||
Exploration and abandonments | 18 | 19 | 78 | 96 | ||||||||||||
General and administrative | 81 | 82 | 245 | 235 | ||||||||||||
Accretion of discount on asset retirement obligations | 5 | 5 | 14 | 14 | ||||||||||||
Interest | 37 | 50 | 118 | 161 | ||||||||||||
Other | 58 | 69 | 176 | 223 | ||||||||||||
1,494 | 1,242 | 4,310 | 3,532 | |||||||||||||
Income (loss) before income taxes | (34 | ) | (56 | ) | 247 | (875 | ) | |||||||||
Income tax benefit (provision) | 11 | 78 | (79 | ) | 362 | |||||||||||
Net income (loss) attributable to common stockholders | $ | (23 | ) | $ | 22 | $ | 168 | $ | (513 | ) | ||||||
Basic and diluted net income (loss) per share attributable to common stockholders | $ | (0.13 | ) | $ | 0.13 | $ | 0.98 | $ | (3.10 | ) | ||||||
Basic and diluted weighted average shares outstanding | 170 | 170 | 170 | 165 | ||||||||||||
Dividends declared per share | $ | 0.04 | $ | 0.04 | $ | 0.08 | $ | 0.08 |
Equity Attributable To Common Stockholders | |||||||||||||||||||||||||||
Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Noncontrolling Interests | Total Equity | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Balance as of December 31, 2016 | 169,724 | $ | 2 | $ | 8,892 | $ | (218 | ) | $ | 1,728 | $ | 7 | $ | 10,411 | |||||||||||||
Dividends declared ($0.08 per share) | — | — | — | — | (14 | ) | — | (14 | ) | ||||||||||||||||||
Exercise of long-term incentive stock options and employee stock purchases | 60 | — | 3 | 4 | — | — | 7 | ||||||||||||||||||||
Purchases of treasury stock | (191 | ) | — | — | (36 | ) | — | — | (36 | ) | |||||||||||||||||
Compensation costs: | |||||||||||||||||||||||||||
Vested compensation awards | 572 | — | — | — | — | — | — | ||||||||||||||||||||
Compensation costs included in net income | — | — | 61 | — | — | — | 61 | ||||||||||||||||||||
Purchase of noncontrolling interest | — | — | 1 | — | — | (1 | ) | — | |||||||||||||||||||
Net income | — | — | — | — | 168 | — | 168 | ||||||||||||||||||||
Balance as of September 30, 2017 | 170,165 | $ | 2 | $ | 8,957 | $ | (250 | ) | $ | 1,882 | $ | 6 | $ | 10,597 |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 168 | $ | (513 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depletion, depreciation and amortization | 1,033 | 1,123 | ||||||
Impairment of oil and gas properties | 285 | 32 | ||||||
Impairment of inventory and other property and equipment | 1 | 6 | ||||||
Exploration expenses, including dry holes | 19 | 41 | ||||||
Deferred income taxes | 79 | (340 | ) | |||||
Gain on disposition of assets, net | (205 | ) | (4 | ) | ||||
Accretion of discount on asset retirement obligations | 14 | 14 | ||||||
Interest expense | 4 | 11 | ||||||
Derivative related activity | (91 | ) | 628 | |||||
Amortization of stock-based compensation | 61 | 66 | ||||||
Other | 48 | 50 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | (131 | ) | (64 | ) | ||||
Income taxes receivable | 2 | 17 | ||||||
Inventories | (9 | ) | (7 | ) | ||||
Derivatives | — | (24 | ) | |||||
Investments | 5 | — | ||||||
Other current assets | (4 | ) | (3 | ) | ||||
Accounts payable | 82 | (8 | ) | |||||
Interest payable | (30 | ) | (26 | ) | ||||
Income taxes payable | — | (2 | ) | |||||
Other current liabilities | (33 | ) | (38 | ) | ||||
Net cash provided by operating activities | 1,298 | 959 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from disposition of assets, net of cash sold | 347 | 503 | ||||||
Payments for acquisitions | — | (429 | ) | |||||
Proceeds from investments | 1,194 | 255 | ||||||
Purchase of investments | (845 | ) | (2,300 | ) | ||||
Additions to oil and gas properties | (1,703 | ) | (1,387 | ) | ||||
Additions to other assets and other property and equipment, net | (252 | ) | (156 | ) | ||||
Net cash used in investing activities | (1,259 | ) | (3,514 | ) | ||||
Cash flows from financing activities: | ||||||||
Principal payments on long-term debt | (485 | ) | (455 | ) | ||||
Proceeds from issuance of common stock, net of issuance costs | — | 2,534 | ||||||
Exercise of long-term incentive plan stock options and employee stock purchases | 7 | 7 | ||||||
Purchases of treasury stock | (36 | ) | (24 | ) | ||||
Dividends paid | (7 | ) | (7 | ) | ||||
Net cash provided by (used in) financing activities | (521 | ) | 2,055 | |||||
Net decrease in cash and cash equivalents | (482 | ) | (500 | ) | ||||
Cash and cash equivalents, beginning of period | 1,118 | 1,391 | ||||||
Cash and cash equivalents, end of period | $ | 636 | $ | 891 |
Assets acquired: | |||
Proved properties | $ | 79 | |
Unproved properties | 347 | ||
Other property and equipment | 5 | ||
Liabilities assumed: | |||
Asset retirement obligations | (2 | ) | |
Other liabilities | (1 | ) | |
Net assets acquired | $ | 428 |
• | Level 1 – quoted prices for identical assets or liabilities in active markets. |
• | Level 2 – quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 – unobservable inputs for the asset or liability. |
Fair Value Measurement as of September 30, 2017 Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value as of September 30, 2017 | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Commodity derivatives | $ | — | $ | 45 | $ | — | $ | 45 | |||||||
Interest rate derivatives | — | 5 | — | 5 | |||||||||||
Deferred compensation plan assets | 90 | — | — | 90 | |||||||||||
Total assets | 90 | 50 | — | 140 | |||||||||||
Liabilities: | |||||||||||||||
Commodity derivatives | — | 29 | — | 29 | |||||||||||
Total liabilities | — | 29 | — | 29 | |||||||||||
Total recurring fair value measurements | $ | 90 | $ | 21 | $ | — | $ | 111 |
Fair Value Measurement as of December 31, 2016 Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair value as of December 31, 2016 | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Commodity derivatives | $ | — | $ | 8 | $ | — | $ | 8 | |||||||
Interest rate derivatives | — | 6 | — | 6 | |||||||||||
Deferred compensation plan assets | 83 | — | — | 83 | |||||||||||
Total assets | 83 | 14 | — | 97 | |||||||||||
Liabilities: | |||||||||||||||
Commodity derivatives | — | 84 | — | 84 | |||||||||||
Total liabilities | — | 84 | — | 84 | |||||||||||
Total recurring fair value measurements | $ | 83 | $ | (70 | ) | $ | — | $ | 13 |
Management's Price Outlooks | |||||||||||||||||
Impairment Date | Fair Value | Fair Value Adjustment | Oil | Gas | |||||||||||||
Raton | March 2017 | $ | 186 | $ | (285 | ) | $ | 53.65 | $ | 3.00 | |||||||
West Panhandle | March 2016 | $ | 33 | $ | (32 | ) | $ | 49.77 | $ | 3.24 |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(in millions) | |||||||||||||||
Commercial paper, corporate bonds and time deposits | $ | 1,508 | $ | 1,506 | $ | 1,906 | $ | 1,901 | |||||||
Current portion of long-term debt | $ | 449 | $ | 462 | $ | 485 | $ | 490 | |||||||
Long-term debt | $ | 2,282 | $ | 2,495 | $ | 2,728 | $ | 2,956 |
September 30, 2017 | ||||||||||||||||||||
Consolidated Balance Sheet Location | Cash | Commercial Paper | Corporate Bonds | Time Deposits | Total | |||||||||||||||
(in millions) | ||||||||||||||||||||
Cash and cash equivalents | $ | 539 | $ | — | $ | — | $ | 97 | $ | 636 | ||||||||||
Short-term investments | — | 124 | 741 | 492 | 1,357 | |||||||||||||||
Long-term investments | — | — | 151 | — | 151 | |||||||||||||||
$ | 539 | $ | 124 | $ | 892 | $ | 589 | $ | 2,144 |
December 31, 2016 | ||||||||||||||||||||
Consolidated Balance Sheet Location | Cash | Commercial Paper | Corporate Bonds | Time Deposits | Total | |||||||||||||||
(in millions) | ||||||||||||||||||||
Cash and cash equivalents | $ | 873 | $ | 45 | $ | — | $ | 200 | $ | 1,118 | ||||||||||
Short-term investments | — | 368 | 691 | 382 | 1,441 | |||||||||||||||
Long-term investments | — | — | 420 | — | 420 | |||||||||||||||
$ | 873 | $ | 413 | $ | 1,111 | $ | 582 | $ | 2,979 |
2017 | Year Ending December 31, 2018 | ||||||
Fourth Quarter | |||||||
Collar contracts (a): | |||||||
Volume (Bbl) | 6,000 | — | |||||
Price per Bbl: | |||||||
Ceiling | $ | 70.40 | $ | — | |||
Floor | $ | 50.00 | $ | — | |||
Collar contracts with short puts (b): | |||||||
Volume (Bbl) | 155,000 | 150,781 | |||||
Price per Bbl: | |||||||
Ceiling | $ | 62.12 | $ | 57.70 | |||
Floor | $ | 49.82 | $ | 47.39 | |||
Short put | $ | 41.02 | $ | 37.35 | |||
Basis swap contracts: | |||||||
Midland-Cushing index swap volume (Bbl) | 6,630 | — | |||||
Price differential ($/Bbl) (c) | $ | (1.09 | ) | $ | — |
(a) | Subsequent to September 30, 2017, the Company entered into additional collar contracts for 3,000 Bbls per day of 2018 production with a ceiling price of $58.05 per Bbl and a floor price of $45.00 per Bbl. |
(b) | Subsequent to September 30, 2017, the Company entered into additional collar contracts with short puts for 2,000 Bbls per day of 2018 production with a ceiling price of $59.25 per Bbl, a floor price of $45.00 per Bbl and a short put price of $35.00 per Bbl. |
(c) | Represents the basis differential between Midland, Texas oil prices and WTI oil prices at Cushing, Oklahoma. |
2017 | Year Ending December 31, | ||||||||||
Fourth Quarter | 2018 | 2019 | |||||||||
Ethane collar contracts (a): | |||||||||||
Volume (Bbl) | 3,000 | — | — | ||||||||
Price per Bbl: | |||||||||||
Ceiling | $ | 11.83 | $ | — | $ | — | |||||
Floor | $ | 8.68 | $ | — | $ | — | |||||
Ethane basis swap contracts (b): | |||||||||||
Volume (MMBtu) | 6,920 | 6,920 | 6,920 | ||||||||
Price differential ($/MMBtu) | $ | 1.60 | $ | 1.60 | $ | 1.60 |
(a) | Represent collar contracts that reduce the price volatility of ethane forecasted for sale by the Company at Mont Belvieu, Texas-posted prices. |
(b) | Represent basis swap contracts that reduce the price volatility of ethane forecasted for sale by the Company at Mont Belvieu, Texas-posted prices. The basis swap contracts fix the basis differential on a NYMEX Henry Hub ("HH") MMBtu equivalent basis. The Company will receive the HH price plus the price differential on 6,920 MMBtu per day, which is equivalent to 2,500 Bbls per day of ethane. |
2017 | Year Ending December 31, | ||||||||||
Fourth Quarter | 2018 | 2019 | |||||||||
Swap contracts: | |||||||||||
Volume (MMBtu) (a) | — | 30,000 | — | ||||||||
Price per MMBtu | $ | — | $ | 3.08 | $ | — | |||||
Collar contracts with short puts: | |||||||||||
Volume (MMBtu) | 300,000 | 62,329 | — | ||||||||
Price per MMBtu: | |||||||||||
Ceiling | $ | 3.60 | $ | 3.56 | $ | — | |||||
Floor | $ | 2.96 | $ | 2.91 | $ | — | |||||
Short put | $ | 2.47 | $ | 2.37 | $ | — | |||||
Basis swap contracts: | |||||||||||
Mid-Continent index swap volume (MMBtu) (b) | 45,000 | — | — | ||||||||
Price differential ($/MMBtu) | $ | (0.32 | ) | $ | — | $ | — | ||||
Permian Basin index swap volume (MMBtu) (c) | 26,522 | 51,671 | 70,000 | ||||||||
Price differential ($/MMBtu) | $ | 0.30 | $ | 0.30 | $ | 0.30 |
(a) | Subsequent to September 30, 2017, the Company entered into additional swap contracts for 70,000 MMBtu per day of April through December 2018 production with a price of $3.00 per MMBtu. |
(b) | Represent swap contracts that fix the basis differentials between the index price at which the Company sells its Mid-Continent gas and the HH index price used in collar contracts with short puts. |
(c) | Represent swap contracts that fix the basis differentials between Permian Basin index prices and southern California index prices for Permian Basin gas forecasted for sale in southern California. Subsequent to September 30, 2017, the Company entered into additional basis swap contracts for (i) 20,000 MMBtu per day of November 2017 through March 2018 production with a price of $0.49 per MMBtu and (ii) 10,000 MMBtu per day of 2019 production with a price of $0.32 per MMBtu. |
Fair Value of Derivative Instruments as of September 30, 2017 | ||||||||||||||
Type | Consolidated Balance Sheet Location | Fair Value | Gross Amounts Offset in the Consolidated Balance Sheet | Net Fair Value Presented in the Consolidated Balance Sheet | ||||||||||
(in millions) | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||
Asset Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 50 | $ | (12 | ) | $ | 38 | ||||||
Interest rate derivatives | Derivatives - current | $ | 5 | $ | — | 5 | ||||||||
Commodity price derivatives | Derivatives - noncurrent | $ | 10 | $ | (3 | ) | 7 | |||||||
$ | 50 | |||||||||||||
Liability Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 29 | $ | (12 | ) | $ | 17 | ||||||
Commodity price derivatives | Derivatives - noncurrent | $ | 15 | $ | (3 | ) | 12 | |||||||
$ | 29 |
Fair Value of Derivative Instruments as of December 31, 2016 | ||||||||||||||
Type | Consolidated Balance Sheet Location | Fair Value | Gross Amounts Offset in the Consolidated Balance Sheet | Net Fair Value Presented in the Consolidated Balance Sheet | ||||||||||
(in millions) | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||
Asset Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 33 | $ | (25 | ) | $ | 8 | ||||||
Interest rate derivatives | Derivatives - current | $ | 6 | $ | — | 6 | ||||||||
$ | 14 | |||||||||||||
Liability Derivatives: | ||||||||||||||
Commodity price derivatives | Derivatives - current | $ | 102 | $ | (25 | ) | $ | 77 | ||||||
Commodity price derivatives | Derivatives - noncurrent | $ | 7 | $ | — | 7 | ||||||||
$ | 84 |
Derivatives Not Designated as | Location of Gain / (Loss) Recognized in Earnings | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Hedging Instruments | on Derivatives | 2017 | 2016 | 2017 | 2016 | |||||||||||||
(in millions) | ||||||||||||||||||
Commodity price derivatives | Derivative gains (losses), net | $ | (133 | ) | $ | 91 | $ | 154 | $ | (87 | ) | |||||||
Interest rate derivatives | Derivative gains (losses), net | — | — | (1 | ) | (8 | ) | |||||||||||
Total | $ | (133 | ) | $ | 91 | $ | 153 | $ | (95 | ) |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | ||||||
(in millions) | |||||||
Beginning capitalized exploratory well costs | $ | 443 | $ | 323 | |||
Additions to exploratory well costs pending the determination of proved reserves | 474 | 1,369 | |||||
Reclassification due to determination of proved reserves | (482 | ) | (1,247 | ) | |||
Exploratory well costs charged to exploration and abandonment expense | (1 | ) | (11 | ) | |||
Ending capitalized exploratory well costs | $ | 434 | $ | 434 |
September 30, 2017 | December 31, 2016 | ||||||
(in millions, except well counts) | |||||||
Capitalized exploratory well costs that have been suspended: | |||||||
One year or less | $ | 422 | $ | 318 | |||
More than one year | 12 | 5 | |||||
$ | 434 | $ | 323 | ||||
Number of wells or projects with exploratory well costs that have been suspended for a period greater than one year | 7 | 3 |
Restricted Stock Equity Awards | Restricted Stock Liability Awards | Performance Units | ||||||
Outstanding as of December 31, 2016 | 1,077,227 | 290,552 | 178,556 | |||||
Awards granted | 332,635 | 118,003 | 59,044 | |||||
Awards forfeited | (31,426 | ) | (15,956 | ) | — | |||
Awards vested | (454,898 | ) | (134,381 | ) | — | |||
Outstanding as of September 30, 2017 | 923,538 | 258,218 | 237,600 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in millions) | |||||||||||||||
Beginning asset retirement obligations | $ | 294 | $ | 281 | $ | 297 | $ | 285 | |||||||
Liabilities assumed in acquisitions | — | 3 | — | 3 | |||||||||||
New wells placed on production | — | — | 2 | — | |||||||||||
Changes in estimates | — | — | 7 | — | |||||||||||
Dispositions | — | — | (7 | ) | — | ||||||||||
Liabilities settled | (7 | ) | (8 | ) | (21 | ) | (21 | ) | |||||||
Accretion of discount | 5 | 5 | 14 | 14 | |||||||||||
Ending asset retirement obligations | $ | 292 | $ | 281 | $ | 292 | $ | 281 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in millions) | |||||||||||||||
Interest income | $ | 9 | $ | 5 | $ | 25 | $ | 14 | |||||||
Severance and sales tax refunds | 5 | — | 13 | — | |||||||||||
Deferred compensation plan income | 1 | — | 3 | 2 | |||||||||||
Other income | 2 | 2 | 3 | 5 | |||||||||||
Total interest and other income | $ | 17 | $ | 7 | $ | 44 | $ | 21 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in millions) | |||||||||||||||
Transportation commitment charges (a) | $ | 45 | $ | 27 | $ | 127 | $ | 77 | |||||||
Loss from vertical integration services (b) | — | 17 | 11 | 46 | |||||||||||
Idle drilling and well service equipment charges (c) | — | 10 | — | 57 | |||||||||||
Other | 13 | 15 | 38 | 43 | |||||||||||
Total other expense | $ | 58 | $ | 69 | $ | 176 | $ | 223 |
(a) | Primarily represents firm transportation payments on excess pipeline capacity commitments. |
(b) | Loss from vertical integration services primarily represents net margins (attributable to third party working interest owners) that result from Company-provided fracture stimulation and well service operations, which are ancillary to and supportive of the Company's oil and gas joint operating activities, and do not represent intercompany transactions. For the three and nine months ended September 30, 2017, these vertical integration net margins included $42 million and $84 million, respectively, of revenues and $42 million and $95 million, respectively, of costs and expenses. For the same respective periods in 2016, these vertical integration net margins included $19 million and $144 million of revenues and $36 million and $190 million of costs and expenses. |
(c) | Primarily represents expenses attributable to idle drilling rig fees that are not chargeable to joint operations and charges to terminate rig contracts that were not required to meet planned drilling activities. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in millions) | |||||||||||||||
Current tax benefit | $ | — | $ | 22 | $ | — | $ | 22 | |||||||
Deferred tax benefit (provision) | 11 | 56 | (79 | ) | 340 | ||||||||||
Income tax benefit (provision) | $ | 11 | $ | 78 | $ | (79 | ) | $ | 362 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in millions) | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (23 | ) | $ | 22 | $ | 168 | $ | (513 | ) | |||||
Participating share-based earnings | — | — | (1 | ) | — | ||||||||||
Basic and diluted net income (loss) attributable to common stockholders | $ | (23 | ) | $ | 22 | $ | 167 | $ | (513 | ) |
• | Net loss attributable to common stockholders for the three months ended September 30, 2017 was $23 million ($0.13 per diluted share), as compared to net income of $22 million ($0.13 per diluted share) for the same period in 2016. The primary components of the decrease in net income attributable to common stockholders include: |
• | a $224 million decrease in net derivative gains, primarily as a result of changes in forward commodity prices and the Company's portfolio of derivatives; |
• | a $67 million decrease in the Company's income tax benefit, primarily as a result of the tax credits recognized during the three months ended September 30, 2016 associated with research and experimental expenditures related to horizontal drilling and completions innovations; and |
• | a $32 million increase in total oil and gas production costs and production and ad valorem taxes as a result of a 15 percent increase in sales volumes and a 15 percent increase in average realized commodity prices per BOE; offset by |
• | a $212 million increase in oil and gas revenues, primarily due to the aforementioned increase in sales volumes and commodity prices; |
• | a $31 million decrease in DD&A expense, primarily attributable to (i) commodity price increases and the Company's cost reduction initiatives, both of which had the effect of adding proved reserves by lengthening the economic lives of the Company's producing wells and (ii) additions to proved reserves attributable to the Company's successful Spraberry/Wolfcamp horizontal drilling program; and |
• | a $13 million decrease in interest expense, primarily due to the repayment of both the Company's 6.65% senior notes, which matured in March 2017, and the Company's 5.875% senior notes, which matured in July 2016. |
• | During the three months ended September 30, 2017, average daily sales volumes increased by 15 percent to 275,711 BOEPD, as compared to 238,878 BOEPD during the same period in 2016. The increase in average daily sales volumes for the three months ended September 30, 2017, as compared to the same period in 2016, is primarily due to the Company's successful Spraberry/Wolfcamp horizontal drilling program. |
• | Average oil, NGL and gas prices increased during the three months ended September 30, 2017 to $45.35 per Bbl, $18.96 per Bbl and $2.58 per Mcf, respectively, as compared to $41.44 per Bbl, $12.46 per Bbl and $2.43 per Mcf, respectively, for the same period in 2016. |
• | Net cash provided by operating activities increased to $455 million for the three months ended September 30, 2017, as compared to $441 million for the same period in 2016. The $14 million increase in net cash provided by operating activities for the three months ended September 30, 2017, as compared to the same period in 2016, is primarily due to increases in the Company's oil and gas revenues as a result of increases in commodity prices and sales volumes, partially offset by a $156 million reduction in cash provided by commodity derivatives. |
• | As of September 30, 2017, the Company's net debt to book capitalization was five percent, as compared to two percent at December 31, 2016. |
Oil (Bbls) | NGLs (Bbls) | Gas (Mcf) | Total (BOE) | |||||||||
Permian Basin | 141,428 | 42,168 | 188,587 | 215,027 | ||||||||
South Texas - Eagle Ford Shale | 7,033 | 6,758 | 41,776 | 20,753 | ||||||||
Raton Basin | — | — | 89,220 | 14,870 | ||||||||
West Panhandle | 1,743 | 3,391 | 6,197 | 6,167 | ||||||||
South Texas - Other | 1,230 | 201 | 18,370 | 4,493 | ||||||||
Other | 4 | 1 | 56 | 15 | ||||||||
Total | 151,438 | 52,519 | 344,206 | 261,325 |
Acquisition Costs | Exploration Costs | Development Costs | Total | |||||||||||||||||
Proved | Unproved | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Permian Basin | $ | 7 | $ | 125 | $ | 1,349 | $ | 403 | $ | 1,884 | ||||||||||
South Texas - Eagle Ford Shale | — | — | 67 | 26 | 93 | |||||||||||||||
Raton Basin | — | — | — | 2 | 2 | |||||||||||||||
West Panhandle | — | — | 1 | 6 | 7 | |||||||||||||||
South Texas - Other | — | — | — | 5 | 5 | |||||||||||||||
Other | — | — | 4 | — | 4 | |||||||||||||||
Total | $ | 7 | $ | 125 | $ | 1,421 | $ | 442 | $ | 1,995 |
Development Drilling | ||||||||||||
Beginning Wells in Progress | Wells Spud | Successful Wells | Ending Wells in Progress | |||||||||
Permian Basin | 8 | 15 | 6 | 17 | ||||||||
South Texas - Eagle Ford Shale | 4 | 1 | 5 | — | ||||||||
South Texas - Other | — | 2 | — | 2 | ||||||||
Total | 12 | 18 | 11 | 19 |
Exploration/Extension Drilling | |||||||||||||||
Beginning Wells in Progress | Wells Spud | Successful Wells | Unsuccessful Wells | Ending Wells in Progress | |||||||||||
Permian Basin | 119 | 163 | 150 | 1 | 131 | ||||||||||
South Texas - Eagle Ford Shale | 14 | 10 | 6 | 1 | 17 | ||||||||||
Total | 133 | 173 | 156 | 2 | 148 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Oil (Bbls) | 161,634 | 134,240 | 151,438 | 130,602 | ||||||||
NGLs (Bbls) | 57,346 | 49,235 | 52,519 | 43,252 | ||||||||
Gas (Mcf) | 340,384 | 332,415 | 344,206 | 343,828 | ||||||||
Total (BOEs) | 275,711 | 238,878 | 261,325 | 231,158 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Oil (per Bbl) | $ | 45.35 | $ | 41.44 | $ | 46.41 | $ | 37.27 | ||||||||
NGL (per Bbl) | $ | 18.96 | $ | 12.46 | $ | 18.38 | $ | 12.37 | ||||||||
Gas (per Mcf) | $ | 2.58 | $ | 2.43 | $ | 2.66 | $ | 1.96 | ||||||||
Total (per BOE) | $ | 33.72 | $ | 29.24 | $ | 34.10 | $ | 26.29 |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | |||||||||||||||||
Net cash receipts (payments) | Price impact | Net cash receipts (payments) | Price impact | |||||||||||||||
(in millions) | (in millions) | |||||||||||||||||
Oil derivative receipts | $ | 29 | $ | 1.94 | per Bbl | $ | 61 | $ | 1.48 | per Bbl | ||||||||
NGL derivative payments | (2 | ) | $ | (0.27 | ) | per Bbl | (1 | ) | $ | (0.08 | ) | per Bbl | ||||||
Gas derivative receipts | 1 | $ | 0.04 | per Mcf | 1 | $ | 0.01 | per Mcf | ||||||||||
Total net commodity derivative receipts | $ | 28 | $ | 61 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | |||||||||||||||||
Net cash receipts | Price impact | Net cash receipts | Price impact | |||||||||||||||
(in millions) | (in millions) | |||||||||||||||||
Oil derivative receipts | $ | 168 | $ | 13.59 | per Bbl | $ | 471 | $ | 13.16 | per Bbl | ||||||||
NGL derivative receipts | 2 | $ | 0.40 | per Bbl | 6 | $ | 0.54 | per Bbl | ||||||||||
Gas derivative receipts | 14 | $ | 0.48 | per Mcf | 56 | $ | 0.59 | per Mcf | ||||||||||
Total net commodity derivative receipts | $ | 184 | $ | 533 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Lease operating expenses | $ | 4.48 | $ | 4.72 | $ | 4.74 | $ | 5.03 | ||||||||
Third-party transportation charges | 0.80 | 1.31 | 0.87 | 1.51 | ||||||||||||
Net natural gas plant (income) charges | (0.29 | ) | 0.02 | (0.25 | ) | 0.07 | ||||||||||
Workover costs | 1.02 | 0.37 | 0.80 | 0.30 | ||||||||||||
Total production costs | $ | 6.01 | $ | 6.42 | $ | 6.16 | $ | 6.91 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Production taxes | $ | 1.54 | $ | 1.07 | $ | 1.52 | $ | 1.03 | ||||||||
Ad valorem taxes | 0.56 | 0.36 | 0.61 | 0.50 | ||||||||||||
Total production and ad valorem taxes | $ | 2.10 | $ | 1.43 | $ | 2.13 | $ | 1.53 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in millions) | ||||||||||||||||
Geological and geophysical | $ | 17 | $ | 18 | $ | 59 | $ | 55 | ||||||||
Exploratory well costs | 1 | 1 | 11 | 1 | ||||||||||||
Leasehold abandonments and other | — | — | 8 | 40 | ||||||||||||
$ | 18 | $ | 19 | $ | 78 | $ | 96 |
Derivative Contract Net Assets | ||||||||||||
Commodities | Interest Rates | Total | ||||||||||
(in millions) | ||||||||||||
Fair value of contracts outstanding as of December 31, 2016 | $ | (76 | ) | $ | 6 | $ | (70 | ) | ||||
Changes in contract fair value | 154 | (1 | ) | 153 | ||||||||
Contract maturity receipts | (60 | ) | — | (60 | ) | |||||||
Contract termination receipts | (2 | ) | — | (2 | ) | |||||||
Fair value of contracts outstanding as of September 30, 2017 | $ | 16 | $ | 5 | $ | 21 |
Three Months Ending December 31, | Year Ending December 31, | Asset (Liability) Fair Value at September 30, | |||||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | 2017 | ||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||||
Total Debt: | |||||||||||||||||||||||||||||||
Fixed rate principal maturities (a) | $ | — | $ | 450 | $ | — | $ | 450 | $ | 500 | $ | 1,350 | $ | 2,750 | $ | (2,957 | ) | ||||||||||||||
Weighted average fixed interest rate | 5.31 | % | 5.11 | % | 5.00 | % | 4.42 | % | 4.72 | % | 5.49 | % | |||||||||||||||||||
Average variable interest rate | 3.01 | % | 3.28 | % | 3.55 | % | 3.71 | % | |||||||||||||||||||||||
Interest Rate Swaps: | |||||||||||||||||||||||||||||||
Notional debt amount (b) | $ | 100 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 5 | |||||||||||||||||
Fixed rate payable (%) | 1.81 | % |
(a) | Represents maturities of principal amounts, excluding debt issuance costs and debt issuance discounts. |
(b) | As of September 30, 2017, the Company was party to interest rate derivative contracts whereby the Company will receive the three-month LIBOR rate for the 10-year period from December 2017 through December 2027 in exchange for paying a fixed interest rate of 1.81 percent on a notional amount of $100 million on December 15, 2017. Subsequent to September 30, 2017, the Company liquidated its interest rate derivative contracts for cash proceeds of $5 million. |
2017 | Year Ending December 31, | Asset (Liability) Fair Value at September 30, 2017 (a) | |||||||||||||
Fourth Quarter | 2018 | 2019 | |||||||||||||
(in millions) | |||||||||||||||
Oil Derivatives: | |||||||||||||||
Average daily notional Bbl volumes: | |||||||||||||||
Collar contracts (b) | 6,000 | — | — | $ | 1 | ||||||||||
Weighted average ceiling price per Bbl | $ | 70.40 | $ | — | $ | — | |||||||||
Weighted average floor price per Bbl | $ | 50.00 | $ | — | $ | — | |||||||||
Collar contracts with short puts (c) | 155,000 | 150,781 | — | $ | 14 | ||||||||||
Weighted average ceiling price per Bbl | $ | 62.12 | $ | 57.70 | $ | — | |||||||||
Weighted average floor price per Bbl | $ | 49.82 | $ | 47.39 | $ | — | |||||||||
Weighted average short put price per Bbl | $ | 41.02 | $ | 37.35 | $ | — | |||||||||
Average forward NYMEX oil prices (d) | $ | 54.15 | $ | 53.98 | $ | — | |||||||||
Midland-Cushing index swap contracts (e) | 6,630 | — | — | — | |||||||||||
Weighted average price differential per Bbl | $ | (1.09 | ) | $ | — | $ | — | ||||||||
Average forward basis differential prices (f) | $ | 0.44 | $ | — | $ | — | |||||||||
NGL Derivatives (g): | |||||||||||||||
Ethane collar contracts (Bbl) (h) | 3,000 | — | — | $ | — | ||||||||||
Weighted average ceiling price per Bbl | $ | 11.83 | $ | — | $ | — | |||||||||
Weighted average floor price per Bbl | $ | 8.68 | $ | — | $ | — | |||||||||
Average forward ethane prices (d) | $ | 11.55 | $ | — | $ | — | |||||||||
Ethane basis swap contracts (MMBtu) (i) | 6,920 | 6,920 | 6,920 | $ | — | ||||||||||
Weighted average price differential per MMBtu | $ | 1.60 | $ | 1.60 | $ | 1.60 | |||||||||
Average forward NYMEX gas prices (d) | $ | 2.97 | $ | 3.00 | $ | 2.91 | |||||||||
Gas Derivatives: | |||||||||||||||
Average daily notional MMBtu volumes: | |||||||||||||||
Swap contracts (j) | — | 30,000 | — | $ | — | ||||||||||
Weighted average fixed price per MMBtu | $ | — | $ | 3.08 | $ | — | |||||||||
Collar contracts with short puts | 300,000 | 62,329 | — | $ | 2 | ||||||||||
Weighted average ceiling price per MMBtu | $ | 3.60 | $ | 3.56 | $ | — | |||||||||
Weighted average floor price per MMBtu | $ | 2.96 | $ | 2.91 | $ | — | |||||||||
Weighted average short put price per MMBtu | $ | 2.47 | $ | 2.37 | $ | — | |||||||||
Average forward NYMEX gas prices (d) | $ | 2.97 | $ | 3.00 | $ | — | |||||||||
Basis swap contracts: | $ | (1 | ) | ||||||||||||
Mid-Continent index swap contracts (k) | 45,000 | — | — | ||||||||||||
Weighted average fixed price per MMBtu | $ | (0.32 | ) | $ | — | $ | — | ||||||||
Average forward basis differential prices (l) | $ | (0.25 | ) | $ | — | $ | — | ||||||||
Permian Basin index swap contracts (m) | 26,522 | 51,671 | 70,000 | ||||||||||||
Weighted average fixed price per MMBtu | $ | 0.30 | $ | 0.30 | $ | 0.30 | |||||||||
Average forward basis differential prices (n) | $ | 0.63 | $ | 0.38 | $ | 0.38 |
(a) | In accordance with Financial Accounting Standards Board ASC 210-20 and ASC 815-10, the Company classifies the fair value amounts of derivative assets and liabilities executed under master netting arrangements as net derivative assets or net derivative liabilities, as the case may be. The net asset and liability amounts shown above have been provided on a commodity contract-type basis, which may differ from their master netting arrangements classifications. |
(b) | Subsequent to September 30, 2017, the Company entered into additional collar contracts for 3,000 Bbls per day of 2018 production with a ceiling price of $58.05 per Bbl and a floor price of $45.00 per Bbl. |
(c) | Subsequent to September 30, 2017, the Company entered into additional collar contracts with short puts for 2,000 Bbls per day of 2018 production with a ceiling price of $59.25 per Bbl, a floor price of $45.00 per Bbl and a short put price of $35.00 per Bbl. |
(d) | The average forward NYMEX oil, ethane and gas prices are based on October 30, 2017 market quotes. |
(e) | Represents swap contracts that fix the basis differential between Midland, Texas oil prices and WTI oil prices at Cushing, Oklahoma. |
(f) | The average forward basis differential prices are based on October 30, 2017 market quotes for basis differentials between Midland, Texas oil prices and WTI prices at Cushing, Oklahoma. |
(g) | Subsequent to September 30, 2017, the Company entered into propane swap contracts for 2,500 Bbls per day of November and December 2017 production with a fixed price of $37.80 per Bbl. |
(h) | Represent collar contracts that reduce the price volatility of ethane forecasted for sale by the Company at Mont Belvieu, Texas-posted prices. |
(i) | Represent basis swap contracts that reduce the price volatility of ethane forecasted for sale by the Company at Mont Belvieu, Texas-posted prices. The basis swap contracts fix the basis differential on a HH MMBtu equivalent basis. The Company will receive the HH price plus the price differential on 6,920 MMBtu per day, which is equivalent to 2,500 Bbls per day of ethane. |
(j) | Subsequent to September 30, 2017, the Company entered into additional swap contracts for 70,000 MMBtu per day of April through December 2018 production with a price of $3.00 per MMBtu. |
(k) | Represent swap contracts that fix the basis differentials between the index prices at which the Company sells its Mid-Continent gas and the HH index price used in collar contracts with short puts. |
(l) | The average forward basis differential prices are based on October 30, 2017 market quotes for basis differentials between the Mid-Continent index prices and the NYMEX-quoted forward prices. |
(m) | Represent swap contracts that fix the basis differentials between Permian Basin index prices and southern California index prices for Permian Basin gas forecasted for sale in southern California. Subsequent to September 30, 2017, the Company entered into additional basis swap contracts for (i) 20,000 MMBtu per day of November 2017 through March 2018 production with a price of $0.49 per MMBtu and (ii) 10,000 MMBtu per day of 2019 production with a price of $0.32 per MMBtu. |
(n) | The average forward basis differential prices are based on October 30, 2017 market quotes for basis differentials between Permian Basin index prices and southern California index prices. |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | Approximate Dollar Amount of Shares that May Yet Be Purchased under Plans or Programs | ||||||||||
July 2017 | 225 | $ | 161.75 | — | ||||||||||
August 2017 | 2,216 | $ | 133.79 | — | ||||||||||
September 2017 | 139 | $ | 131.78 | — | ||||||||||
Total | 2,580 | $ | 136.12 | — | $ | — |
(a) | Consists of shares purchased from employees in order for the employee to satisfy tax withholding payments related to share-based awards that vested during the period. |
Exhibit Number | Description | |||
10.1 | (a) — | |||
12.1 | (a) — | |||
31.1 | (a) — | |||
31.2 | (a) — | |||
32.1 | (b) — | |||
32.2 | (b) — | |||
95.1 | (a) — | |||
101.INS | (a) — | XBRL Instance Document. | ||
101.SCH | (a) — | XBRL Taxonomy Extension Schema. | ||
101.CAL | (a) — | XBRL Taxonomy Extension Calculation Linkbase Document. | ||
101.DEF | (a) — | XBRL Taxonomy Extension Definition Linkbase Document. | ||
101.LAB | (a) — | XBRL Taxonomy Extension Label Linkbase Document. | ||
101.PRE | (a) — | XBRL Taxonomy Extension Presentation Linkbase Document. |
(a) | Filed herewith. |
(b) | Furnished herewith. |
PIONEER NATURAL RESOURCES COMPANY | ||||
Date: November 3, 2017 | By: | /s/ RICHARD P. DEALY | ||
Richard P. Dealy, | ||||
Executive Vice President and Chief Financial Officer | ||||
Date: November 3, 2017 | By: | /s/ MARGARET M. MONTEMAYOR | ||
Margaret M. Montemayor, | ||||
Vice President and Chief Accounting Officer |
PIONEER NATURAL RESOURCES USA, INC. | ||
By: | /s/ Teresa A. Fairbrook | |
Name: | Teresa A. Fairbook | |
Title: | Vice President and Chief Human | |
Resources Officer |
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS |
Nine Months Ended | Year ended December 31, | |||||||||||
September 30, 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||
Ratio of earnings to fixed charges (a) | 2.95 | (b) | (c) | 9.45 | (d) | 4.52 | ||||||
Ratio of earnings to fixed charges and preferred stock dividends (e) | 2.95 | (b) | (c) | 9.45 | (d) | 4.52 |
(a) | The ratio has been computed by dividing earnings by fixed charges. For purposes of computing the ratio: |
- earnings consist of income from continuing operations before income taxes, cumulative effect of change in accounting principle, adjustments for net income or loss attributable to the noncontrolling interest and the Company's share of investee's income or loss accounted for under the equity method, and adjustment for capitalized interest, plus fixed charges and the Company's share of distributed income from investees accounted for under the equity method; and | |
- fixed charges consist of interest expense, capitalized interest and the portion of rental expense deemed to be representative of the interest component of rental expense. | |
(b) | The ratio indicates a less than one-to-one coverage because the earnings are inadequate to cover the fixed charges during the year ended December 31, 2016 by $963 million. |
(c) | The ratio indicates a less than one-to-one coverage because the earnings are inadequate to cover the fixed charges during the year ended December 31, 2015 by $432 million. |
(d) | The ratio indicates a less than one-to-one coverage because the earnings are inadequate to cover the fixed charges during the year ended December 31, 2013 by $606 million. |
(e) | The ratio has been computed by dividing earnings by fixed charges and preferred stock dividends. For purposes of computing the ratio: |
- earnings consist of income from continuing operations before income taxes, cumulative effect of change in accounting principle, adjustments for net income or loss attributable to the noncontrolling interest and the Company's share of investee's income or loss accounted for under the equity method, and adjustment for capitalized interest, plus fixed charges, the Company's share of distributed income from investees accounted for under the equity method and preferred stock dividends, net of preferred stock dividends of a consolidated subsidiary; and | |
- fixed charges and preferred stock dividends consist of interest expense, capitalized interest and the portion of rental expense deemed to be representative of the interest component of rental expense, preferred stock dividends of a consolidated subsidiary and preferred stock dividends. | |
1. | I have reviewed this quarterly report on Form 10-Q of Pioneer Natural Resources Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Timothy L. Dove |
Timothy L. Dove, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Pioneer Natural Resources Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Richard P. Dealy |
Richard P. Dealy, Executive Vice President |
and Chief Financial Officer |
/s/ Timothy L. Dove | ||
Name: | Timothy L. Dove, President and | |
Chief Executive Officer | ||
Date: | Date: November 3, 2017 |
/s/ Richard P. Dealy | ||
Name: | Richard P. Dealy, Executive Vice | |
President and Chief Financial Officer | ||
Date: | Date: November 3, 2017 |
Mine/MSHA Identification Number(1) | Section 104 S&S Citations | Section 104(b) Orders | Section 104(d) Citations and Orders | Section 110(b)(2) Violations | Section 107(a) Orders | Total Dollar Value of Proposed Assessments | Mining Related Fatalities | Received Notice of Pattern of Violations under Section 104(e) (yes/no) | Received Notice of Potential to have Pattern under Section 104(e) (yes/no) | Legal Actions Pending as of Last Day of Period | Legal Actions Initiated During Period | Legal Actions Resolved During Period | |||||||||||||||||||||||
Colorado Springs Operation / 0503295 | 3 | — | — | — | — | $ | 663 | — | No | No | — | — | — | ||||||||||||||||||||||
Millwood Operation / 3301355 | — | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||||||||||||||
Voca Pit and Plant / 4101003 | — | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||||||||||||||
Brady Plant / 4101371 | 4 | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||||||||||||||
Voca West / 4103618 | — | — | — | — | — | $ | 743 | — | No | No | — | — | — |
(1 | ) | The definition of mine under section three of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools and minerals preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine. MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities such as preparation facilities. |
Document And Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2017 |
Oct. 30, 2017 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PXD | |
Entity Registrant Name | PIONEER NATURAL RESOURCES CO | |
Entity Central Index Key | 0001038357 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 170,165,265 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 173,794,108 | 173,221,845 |
Treasury stock, shares | 3,628,843 | 3,497,742 |
Consolidated Statement Of Equity (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (usd per share) | $ 0.04 | $ 0.04 | $ 0.08 | $ 0.08 |
Organization And Nature Of Operations |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization And Nature Of Operations | Organization and Nature of Operations Pioneer Natural Resources Company ("Pioneer" or the "Company") is a Delaware corporation whose common stock is listed and traded on the New York Stock Exchange. The Company is a large independent oil and gas exploration and production company that explores for, develops and produces oil, natural gas liquids ("NGLs") and gas within the United States, with operations primarily in the Permian Basin in West Texas, the Eagle Ford Shale play in South Texas, the Raton field in southeast Colorado and the West Panhandle field in the Texas Panhandle. |
Basis of Presentation |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Presentation. In the opinion of management, the consolidated financial statements of the Company as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") have been condensed in or omitted from this report pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016. Certain reclassifications have been made to the 2016 financial statement and footnote amounts in order to conform to the 2017 presentation. Issuance of common stock. During the first and second quarters of 2016, the Company issued 13.8 million and 6.0 million shares of common stock, respectively, and received cash proceeds of $1.6 billion and $937 million, respectively, net of associated underwriter discounts and offering expenses. New accounting pronouncements. In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, "Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as certain classification changes in the statement of cash flows. The Company adopted this standard on January 1, 2017. See Note M for discussion on the impact of the adoption to the Company's income tax provision. In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases and makes certain changes to the accounting for lease expenses. This update is effective for fiscal years beginning after December 15, 2018 and for interim periods beginning the following year. This update should be applied using a modified retrospective approach, and early adoption is permitted. The Company anticipates that the adoption of ASU 2016-02 for its leasing arrangements will likely (i) increase the Company's recorded assets and liabilities, (ii) increase depreciation, depletion and amortization expense, (iii) increase interest expense and (iv) decrease lease/rental expense. The Company is currently evaluating each of its lease arrangements and has not determined the aggregate amount of change expected for each category. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition requirements in Accounting Standards Codification ("ASC") Topic 605, "Revenue Recognition," and most industry-specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for one year to fiscal years beginning after December 15, 2017. Early adoption is permitted for fiscal years beginning after December 15, 2016. In addition, in May 2016, the FASB issued ASU 2016-11, which rescinds guidance from the SEC on accounting for gas balancing arrangements and will eliminate the use of the entitlements method. The Company has been working through a project plan for the implementation of Topic 606 and has identified the following revenue streams: oil, NGL and gas sales and sales of purchased oil and gas. The Company's analysis of contracts with customers in accordance with the requirements of Topic 606 is largely complete. The Company has not identified any changes to the timing of revenue recognition based upon the requirements of Topic 606 that would have a material impact on the Company's consolidated financial statements. The Company plans to utilize the modified approach to adopt the new standards upon their effective dates with a cumulative effect adjustment, if any, recorded to retained earnings as of January 1, 2018. The Company's evaluation of the new disclosure requirements is ongoing. |
Acquisitions and Divestitures |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions and Divestitures Permian Basin Acquisition. In August 2016, the Company acquired approximately 28,000 net acres in the Permian Basin, with net production of approximately 1,400 barrels of oil equivalent per day ("BOEPD"), from an unaffiliated third party for $428 million, including normal closing adjustments. The acquisition was accounted for using the acquisition method under ASC 805, "Business Combinations," which requires acquired assets and liabilities to be recorded at fair value as of the acquisition date. The following table represents the allocation of the acquisition price to the assets acquired and the liabilities assumed based on their fair value at the acquisition date (in millions):
The fair value measurements of the net assets acquired are based on inputs that are not observable in the market and, therefore, represent Level 3 inputs in the fair value hierarchy (see Note D for a description of the input levels in the fair value hierarchy). The Company calculated the fair values of the acquired proved properties and asset retirement obligations using a discounted future cash flow model that utilizes management's estimates of (i) proved reserves, (ii) forecasted production rates, (iii) future operating, development and plugging and abandonment costs, (iv) future commodity prices and (v) a discount rate of 10 percent for proved properties and seven percent for asset retirement obligations. The Company calculated the fair values of the acquired unproved properties based on the average price per acre in comparable market transactions. The operating results attributable to the acquired assets and liabilities assumed are included in the Company's accompanying consolidated statements of operations since the date of acquisition. Divestitures. For the three and nine months ended September 30, 2017, the Company recorded net gains on the disposition of assets of nil and $205 million, respectively. For the three and nine months ended September 30, 2016, the Company recorded net gains on the disposition of assets of $1 million and $4 million, respectively. In April 2017, the Company completed the sale of approximately 20,500 acres in the Martin County region of the Permian Basin, with net production of approximately 1,500 BOEPD, to an unaffiliated third party for cash proceeds of $266 million, before normal closing adjustments. The sale resulted in a gain of $194 million. In conjunction with the divestiture, the Company reduced the carrying value of goodwill by $2 million, reflecting the portion of the Company's goodwill related to the assets sold. During the nine months ended September 30, 2017, the Company also completed the sales of other nonstrategic proved and unproved properties in the Permian Basin for cash proceeds of $78 million, which resulted in a gain of $12 million. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The three input levels of the fair value hierarchy are as follows:
Assets and liabilities measured at fair value on a recurring basis. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 for each of the fair value hierarchy levels:
Commodity derivatives. The Company's commodity derivatives represent oil, NGL and gas swap contracts, collar contracts and collar contracts with short puts. The asset and liability measurements for these derivative contracts represent Level 2 inputs in the hierarchy. The Company utilizes discounted cash flow and option-pricing models for valuing its commodity derivatives. The asset and liability values attributable to the Company's commodity derivatives were determined based on inputs that include (i) the contracted notional volumes, (ii) independent active market price quotes, (iii) the applicable estimated credit-adjusted risk-free rate yield curve and (iv) the implied rate of volatility inherent in the collar contracts and collar contracts with short puts, which is based on active and independent market-quoted volatility factors. Deferred compensation plan assets. The Company's deferred compensation plan assets represent investments in equity and mutual fund securities that are actively traded on major exchanges. These investments are measured based on observable prices on major exchanges. As of September 30, 2017, the significant inputs to these asset values represented Level 1 independent active exchange market price inputs. Interest rate derivatives. The Company's interest rate derivative assets represent interest rate swap contracts. The Company utilizes discounted cash flow models for valuing its interest rate derivatives. The derivative values attributable to the Company's interest rate derivative contracts are based on (i) the contracted notional amounts, (ii) forward active market-quoted London Interbank Offered Rates ("LIBOR") and (iii) the applicable credit-adjusted risk-free rate yield curve. The Company's interest rate derivative fair value measurements represent Level 2 inputs in the hierarchy. Assets and liabilities measured at fair value on a nonrecurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. These assets and liabilities can include inventory, proved and unproved oil and gas properties and other long-lived assets or liabilities that are acquired or written down to fair value when they are impaired or held for sale. See Note C for information on the fair value of assets and liabilities acquired in the Permian Basin acquisition. Proved oil and gas properties. As a result of the Company's proved property impairment assessments, the Company recognized noncash impairment charges to reduce the carrying values of the Raton and West Panhandle fields during the three months ended March 31, 2017 and 2016, respectively, to their estimated fair values. The Company calculated the fair values of the Raton and West Panhandle fields using a discounted future cash flow model. Significant Level 3 assumptions associated with the calculations included management's longer-term commodity price outlooks ("Management's Price Outlooks") and management's outlooks for (i) production, (ii) production costs, (iii) capital expenditures and (iv) estimated proved reserves and risk-adjusted probable reserves. Management's Price Outlooks are developed based on third-party longer-term commodity futures price outlooks as of each measurement date. The expected future net cash flows were discounted using an annual rate of 10 percent to determine fair value. The following table presents the fair value and fair value adjustments (in millions) for the Company's 2017 and 2016 proved property impairments, as well as the average oil price per barrel ("Bbl") and gas price per British thermal unit ("MMBtu") utilized in the respective Management's Price Outlooks:
It is reasonably possible that the estimate of undiscounted future net cash flows attributable to these or other properties may change in the future resulting in the need to impair their carrying values. The primary factors that may affect estimates of future cash flows are (i) future adjustments, both positive and negative, to proved and risk-adjusted probable and possible oil and gas reserves, (ii) results of future drilling activities, (iii) Management's Price Outlooks and (iv) increases or decreases in production and capital costs associated with these reserves. Unproved oil and gas properties. During March 2016, the Company recorded an impairment charge of $32 million to write-off the carrying value of its unproved royalty acreage in Alaska (reported in exploration and abandonments in the accompanying consolidated statements of operations) as a result of the operator curtailing operations in the area and Management's Price Outlooks. Financial instruments not carried at fair value. Carrying values and fair values of financial instruments that are not carried at fair value in the accompanying consolidated balance sheets as of September 30, 2017 and December 31, 2016 are as follows:
Commercial paper, corporate bonds and time deposits. Periodically, the Company invests in commercial paper and corporate bonds with investment grade rated entities. The Company also periodically enters into time deposits with financial institutions. The investments are carried at amortized cost and classified as held-to-maturity as the Company has the intent and ability to hold them until they mature. The carrying values of held-to-maturity investments are adjusted for amortization of premiums and accretion of discounts over the remaining life of the investment. Income related to these investments is recorded in interest and other income in the Company's consolidated statements of operations. The Company's investments in corporate bonds represent Level 1 inputs in the hierarchy, while other investments represent Level 2 inputs in the hierarchy. Commercial paper and time deposits are included in cash and cash equivalents if they have maturity dates that are less than 90 days at the date of purchase; otherwise, investments are reflected in short-term investments or long-term investments in the accompanying consolidated balance sheets based on their maturity dates. The following table provides the components of the Company's cash and cash equivalents and investments as of September 30, 2017 and December 31, 2016:
Debt obligations. The Company's debt obligations are composed of its credit facility and senior notes. The fair value of the Company's debt obligations is determined utilizing inputs that are Level 2 measurements in the fair value hierarchy. The fair value of the Company's credit facility is calculated using a discounted cash flow model based on (i) forecasted contractual interest and fee payments, (ii) forward active market-quoted United States Treasury Bill rates and (iii) the applicable credit-adjustments. The Company's senior notes represent debt securities that are not actively traded on major exchanges. The fair values of the Company's senior notes are based on their periodic values as quoted on the major exchanges. The Company has other financial instruments consisting primarily of receivables, payables and other current assets and liabilities that approximate fair value due to the nature of the instrument and their relatively short maturities. Non-financial assets and liabilities initially measured at fair value include assets acquired and liabilities assumed in a business combination, goodwill and asset retirement obligations. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company utilizes commodity swap contracts, collar contracts and collar contracts with short puts to (i) reduce the effect of price volatility on the commodities the Company produces and sells or consumes, (ii) support the Company's annual capital budgeting and expenditure plans and (iii) reduce commodity price risk associated with certain capital projects. The Company also, from time to time, utilizes interest rate contracts to reduce the effect of interest rate volatility on the Company's indebtedness. Periodically, the Company may pay a premium to enter into commodity contracts. Premiums paid, if any, have been nominal in relation to the value of the underlying asset in the contract. The Company recognizes the nominal premium payments as an increase to the value of derivative assets when paid. All derivatives are adjusted to fair value as of each balance sheet date. Oil production derivative activities. All material physical sales contracts governing the Company's oil production are tied directly to, or are highly correlated with, New York Mercantile Exchange ("NYMEX") West Texas Intermediate ("WTI") oil prices. The Company uses derivative contracts to manage oil price volatility and basis swap contracts to reduce basis risk between NYMEX prices and the actual index prices at which the oil is sold. The following table sets forth the volumes per day associated with the Company's outstanding oil derivative contracts as of September 30, 2017 and the weighted average oil prices for those contracts:
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NGL production derivative activities. All material physical sales contracts governing the Company's NGL production are tied directly or indirectly to either Mont Belvieu, Texas or Conway, Kansas NGL component product prices. The Company uses derivative contracts to manage NGL component price volatility. The following table sets forth the volumes per day associated with the Company's outstanding NGL derivative contracts as of September 30, 2017 and the weighted average NGL prices for those contracts:
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Subsequent to September 30, 2017, the Company entered into propane swap contracts for 2,500 Bbls per day of November and December 2017 production with a fixed price of $37.80 per Bbl. Gas production derivative activities. All material physical sales contracts governing the Company's gas production are tied directly or indirectly to HH gas prices or regional index prices where the gas is sold. The Company uses derivative contracts to manage gas price volatility and basis swap contracts to reduce basis risk between HH prices and actual index prices at which the gas is sold. The following table sets forth the volumes per day associated with the Company's outstanding gas derivative contracts as of September 30, 2017 and the weighted average gas prices for those contracts:
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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 swaps that mitigate price risk. As of September 30, 2017, the Company was party to (i) oil index swap contracts for 10,000 Bbls per day of November and December 2017 transportation commitments with a price differential of $4.18 per Bbl between NYMEX WTI and Louisiana Light Sweet oil ("LLS") and (ii) oil index swap contracts for 10,000 Bbls per day of January through August 2018 transportation commitments with a price differential of $3.18 per Bbl between NYMEX WTI and LLS. Interest rate derivative activities. As of September 30, 2017, the Company was party to interest rate derivative contracts whereby the Company will receive the three-month LIBOR rate for the 10-year period from December 2017 through December 2027 in exchange for paying a fixed interest rate of 1.81 percent on a notional amount of $100 million on December 15, 2017. Subsequent to September 30, 2017, the Company liquidated its interest rate derivative contracts for cash proceeds of $5 million. Tabular disclosure of derivative financial instruments. All of the Company's derivatives are accounted for as non-hedge derivatives as of September 30, 2017 and December 31, 2016, and therefore all changes in the fair values of its derivative contracts are recognized as gains or losses in the earnings of the periods in which they occur. The Company classifies the fair value amounts of derivative assets and liabilities as net current or noncurrent derivative assets or net current or noncurrent derivative liabilities, whichever the case may be, by commodity and counterparty. The Company enters into derivatives under master netting arrangements, which, in an event of default, allows the Company to offset payables to and receivables from the defaulting counterparty. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type and counterparty, including the classification between current and noncurrent assets and liabilities, consists of the following:
The Company uses credit and other financial criteria to evaluate the credit standing of, and to select, counterparties to its derivative instruments. Although the Company does not obtain collateral or otherwise secure the fair value of its derivative instruments, associated credit risk is mitigated by the Company's credit risk policies and procedures. The following table details the location of gains and losses recognized on the Company's derivative contracts in the accompanying consolidated statements of operations:
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Exploratory Costs |
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Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exploratory Costs | Exploratory Costs The Company capitalizes exploratory well and project costs until a determination is made that the well or project has either found proved reserves, is impaired or is sold. The Company's capitalized exploratory well and project costs are presented in proved properties in the accompanying consolidated balance sheets. If the exploratory well or project is determined to be impaired, the impaired costs are charged to exploration and abandonments expense. The following table reflects the Company's capitalized exploratory well and project activity during the three and nine months ended September 30, 2017:
The following table provides an aging as of September 30, 2017 and December 31, 2016 of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year, based on the date drilling was completed:
The seven wells that were suspended for a period greater than one year as of September 30, 2017 are in the Eagle Ford Shale area. The Company expects to complete all seven of these wells in 2018. |
Long-term Debt |
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Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Credit facility. The Company's long-term debt consists of senior notes, a revolving corporate credit facility (the "Credit Facility") and the effects of issuance costs and discounts. The Credit Facility is maintained with a syndicate of financial institutions and has aggregate loan commitments of $1.5 billion that expire in August 2020. As of September 30, 2017, the Company had no outstanding borrowings under the Credit Facility and was in compliance with its debt covenants. Senior notes. The Company's 6.65% senior notes (the "6.65% Senior Notes") and 5.875% senior notes (the "5.875% Senior Notes") matured and were repaid in March 2017 and July 2016, respectively. The Company funded both the $485 million repayment of the 6.65% Senior Notes and the $455 million repayment of the 5.875% Senior Notes with cash on hand. The Company's 6.875% senior notes (the "6.875% Senior Notes"), with an outstanding debt principal balance of $450 million, will mature in May 2018. The 6.875% Senior Notes are classified as current in the accompanying consolidated balance sheets as of September 30, 2017. |
Incentive Plans |
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Compensation Related Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plans | Incentive Plans Stock-based compensation. For the three and nine months ended September 30, 2017, the Company recorded $21 million and $78 million, respectively, of stock-based compensation expense for all plans, as compared to $31 million and $84 million for the same respective periods in 2016. As of September 30, 2017, there was $113 million of unrecognized stock-based compensation expense related to unvested share-based compensation plans, including $24 million attributable to stock-based awards that are expected to be settled on their vesting date in cash, rather than in equity shares ("Liability Awards"). The unrecognized compensation expense will be recognized on a straight-line basis over the remaining vesting periods of the awards, which is a period of less than three years on a weighted average basis. As of September 30, 2017 and December 31, 2016, accounts payable – due to affiliates included $13 million and $22 million, respectively, of liabilities attributable to Liability Awards. The following table summarizes the activity that occurred during the nine months ended September 30, 2017 for restricted stock awards and performance units issued by Pioneer:
As of September 30, 2017 and December 31, 2016, the Company also had 159,378 stock options outstanding and exercisable. There were no stock options exercised during the nine months ended September 30, 2017. |
Asset Retirement Obligations |
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Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations The Company's asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. The following table summarizes the Company's asset retirement obligation activity during the three and nine months ended September 30, 2017 and 2016:
The Company records the current and noncurrent portions of asset retirement obligations in other current liabilities and other liabilities, respectively, in the accompanying consolidated balance sheets. As of September 30, 2017 and December 31, 2016, the current portion of the Company's asset retirement obligations was $42 million and $39 million, respectively. |
Commitments and Contingencies |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In addition to the legal action described below, the Company is a party to other proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to such proceedings and claims will not have a material adverse effect on the Company's financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company records reserves for contingencies when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated. U.S. Environmental Protection Agency ("EPA") potential enforcement action. The Company has been advised by the EPA that the agency is considering an enforcement action against the Company and may seek monetary sanctions for alleged failures to prevent emissions occurring at the Company's Fain gas plant in the West Panhandle region of Texas on five separate occasions. The Company has asserted defenses to the EPA's allegations and is in discussions with the EPA regarding these matters. Although the Company cannot predict the outcome of these discussions with any certainty, the Company believes such monetary sanctions will not exceed $45,000 for any single event, but could exceed $100,000 in the aggregate. Obligations following divestitures. In connection with its divestiture transactions, the Company may retain certain liabilities and provide the purchaser certain indemnifications, subject to defined limitations, which may apply to identified pre-closing matters, including matters of litigation, environmental contingencies, royalty obligations and income taxes. The Company does not believe these obligations are probable of having a material impact on its liquidity, financial position or future results of operations. Lease agreements. In June 2017, the Company entered into a 20-year operating lease for the Company's new corporate headquarters that is currently being constructed in Irving, Texas. Annual base rent is expected to be $33 million and lease payments are expected to commence once the building is complete, which is anticipated to occur during the second half of 2019. The Company has a variable equity interest in the entity that is constructing the building. The Company is not the primary beneficiary of the variable interest entity and only has a profit sharing interest after certain economic returns are achieved. The Company has no exposure to the variable interest entity's losses or future liabilities, if any. The Company is the deemed owner of the building (for accounting purposes) during the construction period and is following the build-to-suit accounting guidance. Accordingly, as of September 30, 2017, the Company has capitalized $36 million of construction costs within other property and equipment and has recognized a corresponding build-to-suit lease liability. The recording of these assets and liabilities are considered noncash investing and financing items, respectively, for purposes of the consolidated statements of cash flows. |
Interest and Other Income |
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Interest and Other Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Other Income | Interest and Other Income The following table provides the components of the Company's interest and other income for the three and nine months ended September 30, 2017 and 2016:
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Other Expense |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense | Other Expense The following table provides the components of the Company's other expense for the three and nine months ended September 30, 2017 and 2016:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company's income tax benefit (provision) consisted of the following for the three and nine months ended September 30, 2017 and 2016:
For the three and nine months ended September 30, 2017, the Company's effective tax rate, excluding income attributable to noncontrolling interests, was 34 percent and 32 percent, respectively, as compared to an effective rate of 140 percent and 41 percent for the same respective periods in 2016. The Company's effective tax rate for the nine months ended September 30, 2017 differs from the U.S. statutory rate of 35 percent primarily due to recognizing excess tax benefits of $8 million associated with the adoption of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which requires excess tax benefits or deficiencies associated with the vesting of long-term incentive awards to be recorded as income tax expense or benefit in the statement of operations rather than as an adjustment to additional paid-in capital in the balance sheet. The Company's effective tax rates for the three and nine months ended September 30, 2016 differ from the U.S. statutory rate of 35 percent primarily due to recognizing research and experimental expenditure credits of $59 million during the three months ended September 30, 2016. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based upon the technical merits of the position. As of September 30, 2017 and December 31, 2016, the Company had unrecognized tax benefits of $123 million and $112 million, respectively, resulting from research and experimental expenditures related to horizontal drilling and completions innovations. If all or a portion of the unrecognized tax benefit is sustained upon examination by the taxing authorities, the tax benefit will be recognized as a reduction to the Company's deferred tax liability and will affect the Company's effective tax rate in the period it is recognized. The Company expects to substantially resolve the uncertainties associated with the unrecognized tax benefit by December 2018. The Company files income tax returns in the U.S. federal and various state and foreign jurisdictions. The Internal Revenue Service has closed examinations of the 2012 and prior tax years and, with few exceptions, the Company believes that it is no longer subject to examinations by state and foreign tax authorities for years before 2011. As of September 30, 2017, no adjustments had been proposed in any jurisdiction that would have a significant effect on the Company's liquidity, future results of operations or financial position. |
Net Income (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) Per Share | Net Income (Loss) Per Share The following table reconciles the Company's net income (loss) attributable to common stockholders to basic and diluted net income (loss) attributable to common stockholders for the three and nine months ended September 30, 2017 and 2016:
Basic and diluted weighted average common shares outstanding were 170 million for both the three and nine months ended September 30, 2017, as compared to 170 million and 165 million for the same respective periods in 2016. |
Basis of Presentation (Policies) |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Presentation | Presentation. In the opinion of management, the consolidated financial statements of the Company as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") have been condensed in or omitted from this report pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016. Certain reclassifications have been made to the 2016 financial statement and footnote amounts in order to conform to the 2017 presentation. |
New accounting pronouncements | New accounting pronouncements. In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, "Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as certain classification changes in the statement of cash flows. The Company adopted this standard on January 1, 2017. See Note M for discussion on the impact of the adoption to the Company's income tax provision. In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases and makes certain changes to the accounting for lease expenses. This update is effective for fiscal years beginning after December 15, 2018 and for interim periods beginning the following year. This update should be applied using a modified retrospective approach, and early adoption is permitted. The Company anticipates that the adoption of ASU 2016-02 for its leasing arrangements will likely (i) increase the Company's recorded assets and liabilities, (ii) increase depreciation, depletion and amortization expense, (iii) increase interest expense and (iv) decrease lease/rental expense. The Company is currently evaluating each of its lease arrangements and has not determined the aggregate amount of change expected for each category. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition requirements in Accounting Standards Codification ("ASC") Topic 605, "Revenue Recognition," and most industry-specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for one year to fiscal years beginning after December 15, 2017. Early adoption is permitted for fiscal years beginning after December 15, 2016. In addition, in May 2016, the FASB issued ASU 2016-11, which rescinds guidance from the SEC on accounting for gas balancing arrangements and will eliminate the use of the entitlements method. The Company has been working through a project plan for the implementation of Topic 606 and has identified the following revenue streams: oil, NGL and gas sales and sales of purchased oil and gas. The Company's analysis of contracts with customers in accordance with the requirements of Topic 606 is largely complete. The Company has not identified any changes to the timing of revenue recognition based upon the requirements of Topic 606 that would have a material impact on the Company's consolidated financial statements. The Company plans to utilize the modified approach to adopt the new standards upon their effective dates with a cumulative effect adjustment, if any, recorded to retained earnings as of January 1, 2018. The Company's evaluation of the new disclosure requirements is ongoing. |
Acquisitions and Divestitures (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of allocation of the acquisition price | The following table represents the allocation of the acquisition price to the assets acquired and the liabilities assumed based on their fair value at the acquisition date (in millions):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 for each of the fair value hierarchy levels:
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Fair value and fair value adjustments | The following table presents the fair value and fair value adjustments (in millions) for the Company's 2017 and 2016 proved property impairments, as well as the average oil price per barrel ("Bbl") and gas price per British thermal unit ("MMBtu") utilized in the respective Management's Price Outlooks:
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Schedule of carrying values and financial instruments not carried at fair value | Carrying values and fair values of financial instruments that are not carried at fair value in the accompanying consolidated balance sheets as of September 30, 2017 and December 31, 2016 are as follows:
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Cash and cash equivalents and investments | The following table provides the components of the Company's cash and cash equivalents and investments as of September 30, 2017 and December 31, 2016:
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of oil derivative contracts volume and weighted average price | The following table sets forth the volumes per day associated with the Company's outstanding oil derivative contracts as of September 30, 2017 and the weighted average oil prices for those contracts:
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Schedule of NGL derivative volumes and weighted average prices | The following table sets forth the volumes per day associated with the Company's outstanding NGL derivative contracts as of September 30, 2017 and the weighted average NGL prices for those contracts:
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Schedule of gas derivative volume and weighted average prices | The following table sets forth the volumes per day associated with the Company's outstanding gas derivative contracts as of September 30, 2017 and the weighted average gas prices for those contracts:
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Offsetting asset and liability | The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type and counterparty, including the classification between current and noncurrent assets and liabilities, consists of the following:
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Schedule of derivative gains and losses recognized on statement of operations | The following table details the location of gains and losses recognized on the Company's derivative contracts in the accompanying consolidated statements of operations:
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Exploratory Costs (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized exploratory well and project activity | The following table reflects the Company's capitalized exploratory well and project activity during the three and nine months ended September 30, 2017:
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Capitalized exploratory costs and the number of projects for which exploratory costs have been capitalized | The following table provides an aging as of September 30, 2017 and December 31, 2016 of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year, based on the date drilling was completed:
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Incentive Plans (Tables) |
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Compensation Related Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share based incentive award activity | The following table summarizes the activity that occurred during the nine months ended September 30, 2017 for restricted stock awards and performance units issued by Pioneer:
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Asset Retirement Obligations (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of asset retirement obligations | The following table summarizes the Company's asset retirement obligation activity during the three and nine months ended September 30, 2017 and 2016:
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Interest and Other Income (Tables) |
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Interest and Other Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of interest and other income | The following table provides the components of the Company's interest and other income for the three and nine months ended September 30, 2017 and 2016:
|
Other Expense (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other expense | The following table provides the components of the Company's other expense for the three and nine months ended September 30, 2017 and 2016:
____________________
|
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (provisions) benefits attributable to income from continuing operations | The Company's income tax benefit (provision) consisted of the following for the three and nine months ended September 30, 2017 and 2016:
|
Net Income (Loss) Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of earnings attributable to common stockholders, basic and diluted | The following table reconciles the Company's net income (loss) attributable to common stockholders to basic and diluted net income (loss) attributable to common stockholders for the three and nine months ended September 30, 2017 and 2016:
|
Basis of Presentation (Narrative) (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Common stock issued, shares | 6.0 | 13.8 | ||
Proceeds from issuance of common stock, net of issuance costs | $ 937 | $ 1,600 | $ 0 | $ 2,534 |
Acquisitions and Divestitures (Permian Basin Acquisition) (Details) a in Thousands, $ in Millions |
1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016
USD ($)
Boe
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Aug. 31, 2017
a
|
|
Business Acquisition [Line Items] | ||||
Payments for acquisitions | $ 0 | $ 429 | ||
Permian Basin | ||||
Business Acquisition [Line Items] | ||||
Net acres acquired | a | 28 | |||
Net production in barrels | Boe | 1,400 | |||
Payments for acquisitions | $ 428 | |||
Permian Basin | Proved properties | ||||
Business Acquisition [Line Items] | ||||
Discount rate | 10.00% | |||
Permian Basin | Asset retirement obligations | ||||
Business Acquisition [Line Items] | ||||
Discount rate | 7.00% |
Acquisitions and Divestitures (Schedule of Allocation of the Acquisition Price) (Details) - Permian Basin $ in Millions |
Aug. 31, 2017
USD ($)
|
---|---|
Assets acquired: | |
Proved properties | $ 79 |
Unproved properties | 347 |
Other property and equipment | 5 |
Liabilities assumed: | |
Asset retirement obligations | 2 |
Other liabilities | 1 |
Net assets acquired | $ 428 |
Acquisitions and Divestitures (Divestitures) (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2017
USD ($)
a
Boe
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on disposition of assets, net | $ 0 | $ 1 | $ 205 | $ 4 | |
Cash proceeds | 347 | $ 503 | |||
Martin County | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on disposition of assets, net | $ 194 | ||||
Acres sold | a | 20,500 | ||||
Net production in barrels | Boe | 1,500 | ||||
Cash proceeds | $ 266 | ||||
Goodwill sold | $ 2 | ||||
Permian Basin | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on disposition of assets, net | 12 | ||||
Cash proceeds | $ 78 |
Fair Value Measurements (Schedule Of Carrying Values And Financial Instruments Not Carried At Fair Value) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt | $ 449 | $ 485 |
Long-term debt | 2,282 | 2,728 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial paper, corporate bonds and time deposits | 1,508 | 1,906 |
Current portion of long-term debt | 449 | 485 |
Long-term debt | 2,282 | 2,728 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial paper, corporate bonds and time deposits | 1,506 | 1,901 |
Current portion of long-term debt | 462 | 490 |
Long-term debt | $ 2,495 | $ 2,956 |
Derivative Financial Instruments (Schedule Of Derivative Obligations Under Terminated Hedge Arrangements) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative [Line Items] | ||||
Derivative gains (losses), net | $ (133) | $ 91 | $ 153 | $ (95) |
Derivative gains (losses), net | Commodity price derivatives | ||||
Derivative [Line Items] | ||||
Derivative gains (losses), net | (133) | 91 | 154 | (87) |
Derivative gains (losses), net | Interest rate derivatives | ||||
Derivative [Line Items] | ||||
Derivative gains (losses), net | $ 0 | $ 0 | $ (1) | $ (8) |
Exploratory Costs (Schedule Of Capitalized Exploratory Well And Project Activity) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Increase (Decrease) in Capitalized Exploratory Well Costs that are Pending Determination of Proved Reserves [Roll Forward] | ||
Beginning capitalized exploratory well costs | $ 443 | $ 323 |
Additions to exploratory well costs pending the determination of proved reserves | 474 | 1,369 |
Reclassification due to determination of proved reserves | (482) | (1,247) |
Exploratory well costs charged to exploration and abandonment expense | (1) | (11) |
Ending capitalized exploratory well costs | $ 434 | $ 434 |
Exploratory Costs (Capitalized Exploratory Costs And the Number Of Projects For Which Exploratory Costs Have Been Capitalized) (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
---|---|---|---|
Capitalized exploratory well costs that have been suspended: | |||
One year or less | $ 422 | $ 318 | |
More than one year | 12 | 5 | |
Total | $ 434 | $ 443 | $ 323 |
Number of wells or projects with exploratory well costs that have been suspended for a period greater than one year | 7 | 3 |
Long-term Debt (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Debt Instrument [Line Items] | |||
Aggregate loan commitments | $ 1,500,000,000 | ||
Outstanding borrowing | 0 | ||
Repayments | $ 485,000,000 | $ 455,000,000 | |
6.65% Senior notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.65% | ||
Repayments | $ 485,000,000 | ||
5.875% Senior notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.875% | ||
Repayments | $ 455,000,000 | ||
6.875% Senior notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.875% | ||
Outstanding debt principal balance | $ 450,000,000 |
Incentive Plans Incentive Plans (Stock-based compensation) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Compensation Related Costs [Abstract] | |||||
Stock-based compensation expense | $ 21 | $ 31 | $ 78 | $ 84 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | 113 | $ 113 | |||
Remaining vesting period | 3 years | ||||
Restricted Stock Liability Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | 24 | $ 24 | |||
Affiliates | Restricted Stock Liability Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Due to affiliates | $ 13 | $ 13 | $ 22 |
Asset Retirement Obligations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||||
Beginning asset retirement obligations | $ 294 | $ 281 | $ 297 | $ 285 | |
Liabilities assumed in acquisitions | 0 | 3 | 0 | 3 | |
New wells placed on production | 0 | 0 | 2 | 0 | |
Changes in estimates | 0 | 0 | 7 | 0 | |
Dispositions | 0 | 0 | (7) | 0 | |
Liabilities settled | (7) | (8) | (21) | (21) | |
Accretion of discount | 5 | 5 | 14 | 14 | |
Ending asset retirement obligations | 292 | $ 281 | 292 | $ 281 | |
Asset retirement obligations, current portions | $ 42 | $ 42 | $ 39 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2017 |
Sep. 30, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Individual monetary sanctions | $ 45 | |
Aggregate monetary sanctions | 100 | |
Operating lease term | 20 years | |
Annual base rent | 33,000 | |
Capitalized construction costs | $ 36,000 |
Interest and Other Income (Components Of Interest And Other Income) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Interest and Other Income [Abstract] | ||||
Interest income | $ 9 | $ 5 | $ 25 | $ 14 |
Severance and sales tax refunds | 5 | 0 | 13 | 0 |
Deferred compensation plan income | 1 | 0 | 3 | 2 |
Other income | 2 | 2 | 3 | 5 |
Total interest and other income | $ 17 | $ 7 | $ 44 | $ 21 |
Other Expense (Schedule Of Components Of Other Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Other Income and Expenses [Abstract] | ||||
Transportation commitment charges | $ 45 | $ 27 | $ 127 | $ 77 |
Loss from vertical integration services | 0 | 17 | 11 | 46 |
Idle drilling and well service equipment charges | 0 | 10 | 0 | 57 |
Other | 13 | 15 | 38 | 43 |
Total other expense | 58 | 69 | 176 | 223 |
Vertical integration net margins, revenue | 42 | 19 | 84 | 144 |
Vertical integration net margins, costs and expenses | $ 42 | $ 36 | $ 95 | $ 190 |
Income Taxes (Income tax (provisions) benefits attributable to income from continuing operations) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Current tax benefit | $ 0 | $ (22) | $ 0 | $ (22) |
Deferred income taxes | (11) | (56) | 79 | (340) |
Income tax benefit (provision) | $ (11) | $ (78) | $ 79 | $ (362) |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 34.00% | 140.00% | 32.00% | 41.00% | |
U.S. statutory rate | 35.00% | 35.00% | 35.00% | ||
Recognizing excess tax benefits associated with the adoption of ASU 2016-09 | $ 8 | ||||
Recognizing research and experimental expenditure credits | $ 59 | ||||
Unrecognized Tax Benefits | $ 123 | $ 123 | $ 112 |
Net Income (Loss) Per Share (Reconciliation Of Earnings Attributable To Common Stockholders, Basic And Diluted) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to common stockholders | $ (23,000) | $ 22,000 | $ 168,000 | $ (513,000) |
Participating share-based earnings | 0 | 0 | (1,000) | 0 |
Basic income (loss) from continuing operations attributable to common stockholders | (23,000) | 22,000 | 167,000 | (513,000) |
Diluted income (loss) from continuing operations attributable to common stockholders | $ (23,000) | $ 22,000 | $ 167,000 | $ (513,000) |
Net Income (Loss) Per Share (Narrative) (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Basic and diluted weighted average common shares outstanding | 170 | 170 | 170 | 165 |
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