falsedesktopPXD2020-09-30000103835720000070{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☒\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage\nCautionary Statement Concerning Forward-Looking Statements\t\t3\nDefinitions of Certain Terms and Conventions Used Herein\t\t4\nPART I. FINANCIAL INFORMATION\t\t\nItem 1.\tFinancial Statements\t\n\tConsolidated Balance Sheets as of September 30 2020 and December 31 2019\t6\n\tConsolidated Statements of Operations for the three and nine months ended September 30 2020 and 2019\t8\n\tConsolidated Statements of Equity for the three and nine months ended September 30 2020 and 2019\t9\n\tConsolidated Statements of Cash Flows for the nine months ended September 30 2020 and 2019\t11\n\tNotes to Consolidated Financial Statements\t12\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t33\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t45\nItem 4.\tControls and Procedures\t47\nPART II. OTHER INFORMATION\t\t\nItem 1.\tLegal Proceedings\t48\nItem 1A.\tRisk Factors\t48\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t52\nItem 6.\tExhibits\t53\nSignatures\t\t54\n", "q10k_tbl_2": "\tSeptember 30 2020\tDecember 31 2019\n\t(Unaudited)\t\nASSETS\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t1325\t631\nRestricted cash\t66\t74\nAccounts receivable:\t\t\nTrade net\t662\t1032\nDue from affiliates\t0\t3\nIncome taxes receivable\t22\t7\nInventories\t191\t205\nDerivatives\t49\t32\nInvestment in affiliate\t67\t187\nOther\t38\t20\nTotal current assets\t2420\t2191\nOil and gas properties using the successful efforts method of accounting:\t\t\nProved properties\t23498\t22444\nUnproved properties\t572\t584\nAccumulated depletion depreciation and amortization\t(9719)\t(8583)\nTotal oil and gas properties net\t14351\t14445\nOther property and equipment net\t1603\t1632\nOperating lease right-of-use assets\t198\t280\nGoodwill\t261\t261\nOther assets\t144\t258\n\t18977\t19067\n", "q10k_tbl_3": "\tSeptember 30 2020\tDecember 31 2019\n\t(Unaudited)\t\nLIABILITIES AND EQUITY\t\t\nCurrent liabilities:\t\t\nAccounts payable:\t\t\nTrade\t871\t1221\nDue to affiliates\t137\t190\nInterest payable\t17\t53\nIncome taxes payable\t2\t3\nCurrent portion of long-term debt\t140\t450\nDerivatives\t51\t12\nOperating leases\t99\t136\nOther\t371\t431\nTotal current liabilities\t1688\t2496\nLong-term debt\t3148\t1839\nDerivatives\t14\t8\nDeferred income taxes\t1406\t1389\nOperating leases\t113\t170\nOther liabilities\t954\t1046\nEquity:\t\t\nCommon stock $0.01 par value; 500000000 shares authorized; 175462969 and 175057889 shares issued as of September 30 2020 and December 31 2019 respectively\t2\t2\nAdditional paid-in capital\t9305\t9161\nTreasury stock at cost: 11059909 and 9511248 shares as of September 30 2020 and December 31 2019 respectively\t(1235)\t(1069)\nRetained earnings\t3582\t4025\nTotal equity\t11654\t12119\nCommitments and contingencies\t\t\n\t18977\t19067\n", "q10k_tbl_4": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenues and other income:\t\t\t\t\nOil and gas\t922\t1235\t2617\t3567\nSales of purchased oil and gas\t935\t1171\t2391\t3463\nInterest and other income (loss) net\t13\t(222)\t(145)\t(42)\nDerivative gain (loss) net\t(57)\t121\t60\t150\nGain (loss) on disposition of assets net\t2\t20\t7\t(477)\n\t1815\t2325\t4930\t6661\nCosts and expenses:\t\t\t\t\nOil and gas production\t163\t227\t506\t667\nProduction and ad valorem taxes\t63\t86\t182\t223\nDepletion depreciation and amortization\t393\t438\t1243\t1271\nPurchased oil and gas\t998\t1125\t2598\t3184\nExploration and abandonments\t16\t11\t35\t46\nGeneral and administrative\t64\t72\t180\t246\nAccretion of discount on asset retirement obligations\t2\t2\t7\t7\nInterest\t34\t29\t94\t88\nOther\t98\t32\t273\t390\n\t1831\t2022\t5118\t6122\nIncome (loss) before income taxes\t(16)\t303\t(188)\t539\nIncome tax benefit (provision)\t(4)\t(72)\t18\t(127)\nNet income (loss) attributable to common stockholders\t(20)\t231\t(170)\t412\nBasic and diluted net income (loss) per share attributable to common stockholders\t(0.12)\t1.38\t(1.03)\t2.44\nBasic and diluted weighted average shares outstanding\t165\t167\t165\t168\nDividends declared per share\t0.55\t0.44\t1.65\t0.76\n", "q10k_tbl_5": "\tShares Outstanding\tCommon Stock\tAdditional Paid-in Capital\tTreasury Stock\tRetained Earnings\tTotal Equity\n\t(in thousands)\t\t\t\t\t\nBalance as of December 31 2019\t165547\t2\t9161\t(1069)\t4025\t12119\nDividends declared ($0.55 per share)\t0\t0\t0\t0\t(91)\t(91)\nExercise of long-term incentive stock options\t8\t0\t(1)\t1\t0\t0\nPurchases of treasury stock\t(1007)\t0\t0\t(122)\t0\t(122)\nStock-based compensation costs:\t\t\t\t\t\t\nIssued awards\t316\t0\t0\t0\t0\t0\nCompensation costs included in net income\t0\t0\t16\t0\t0\t16\nNet income\t0\t0\t0\t0\t289\t289\nBalance as of March 31 2020\t164864\t2\t9176\t(1190)\t4223\t12211\nDividends declared ($0.55 per share)\t0\t0\t0\t0\t(91)\t(91)\nConvertible senior notes:\t\t\t\t\t\t\nEquity component\t0\t0\t230\t0\t0\t230\nCapped call\t0\t0\t(113)\t0\t0\t(113)\nDeferred tax provision\t0\t0\t(25)\t0\t0\t(25)\nPurchases of treasury stock\t(592)\t0\t0\t(50)\t0\t(50)\nStock-based compensation costs:\t\t\t\t\t\t\nIssued awards\t4\t0\t0\t0\t0\t0\nCompensation costs included in net loss\t0\t0\t17\t0\t0\t17\nNet loss\t0\t0\t0\t0\t(439)\t(439)\nBalance as of June 30 2020\t164276\t2\t9285\t(1240)\t3693\t11740\nDividends declared ($0.55 per share)\t0\t0\t0\t0\t(91)\t(91)\nExercise of employee stock purchases\t62\t0\t(1)\t7\t0\t6\nPurchases of treasury stock\t(19)\t0\t0\t(2)\t0\t(2)\nStock-based compensation costs:\t\t\t\t\t\t\nIssued awards\t84\t0\t0\t0\t0\t0\nCompensation costs included in net loss\t0\t0\t21\t0\t0\t21\nNet loss\t0\t0\t0\t0\t(20)\t(20)\nBalance as of September 30 2020\t164403\t2\t9305\t(1235)\t3582\t11654\n", "q10k_tbl_6": "\tShares Outstanding\tCommon Stock\tAdditional Paid-in Capital\tTreasury Stock\tRetained Earnings\tTotal Equity\n\t(in thousands)\t\t\t\t\t\nBalance as of December 31 2018\t169499\t2\t9062\t(423)\t3470\t12111\nDividends declared ($0.32 per share)\t0\t0\t0\t0\t(54)\t(54)\nExercise of long-term incentive stock options\t10\t0\t(1)\t1\t0\t0\nPurchases of treasury stock\t(1594)\t0\t0\t(222)\t0\t(222)\nStock-based compensation costs:\t\t\t\t\t\t\nIssued awards\t507\t0\t0\t0\t0\t0\nCompensation costs included in net income\t0\t0\t24\t0\t0\t24\nNet income\t0\t0\t0\t0\t350\t350\nBalance as of March 31 2019\t168422\t2\t9085\t(644)\t3766\t12209\nPurchases of treasury stock\t(1349)\t0\t0\t(202)\t0\t(202)\nStock-based compensation costs:\t\t\t\t\t\t\nIssued awards\t49\t0\t0\t0\t0\t0\nCompensation costs included in net loss\t0\t0\t38\t0\t0\t38\nNet loss\t0\t0\t0\t0\t(169)\t(169)\nBalance as of June 30 2019\t167122\t2\t9123\t(846)\t3597\t11876\nDividends declared ($0.44 per share)\t0\t0\t0\t0\t(73)\t(73)\nExercise of long-term incentive stock options and employee stock purchases\t54\t0\t0\t6\t0\t6\nPurchases of treasury stock\t(1619)\t0\t0\t(203)\t0\t(203)\nStock-based compensation costs:\t\t\t\t\t\t\nIssued awards\t86\t0\t0\t0\t0\t0\nCompensation costs included in net income\t0\t0\t19\t0\t0\t19\nNet income\t0\t0\t0\t0\t231\t231\nBalance as of September 30 2019\t165643\t2\t9142\t(1043)\t3755\t11856\n", "q10k_tbl_7": "\tNine Months Ended September 30\t\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet income (loss)\t(170)\t412\nAdjustments to reconcile net income (loss) to net cash provided by operating activities:\t\t\nDepletion depreciation and amortization\t1243\t1271\nImpairment of inventory and other property and equipment\t2\t34\nExploration expenses including dry holes\t8\t6\nDeferred income taxes\t(8)\t127\n(Gain) loss on disposition of assets net\t(7)\t477\nLoss on early extinguishment of debt\t27\t0\nAccretion of discount on asset retirement obligations\t7\t7\nInterest expense\t34\t4\nDerivative-related activity\t28\t(116)\nAmortization of stock-based compensation\t54\t81\nInvestment in affiliate valuation adjustment\t119\t22\nSouth Texas contingent consideration valuation adjustment\t42\t61\nSouth Texas deficiency fee obligation\t69\t0\nOther\t94\t96\nChange in operating assets and liabilities:\t\t\nAccounts receivable\t371\t(47)\nInventories\t13\t(55)\nOther assets\t22\t(15)\nAccounts payable\t(164)\t1\nInterest payable\t(37)\t(29)\nOther liabilities\t(201)\t(50)\nNet cash provided by operating activities\t1546\t2287\nCash flows from investing activities:\t\t\nProceeds from disposition of assets\t58\t82\nProceeds from investments\t0\t568\nPurchase of investments\t(1)\t0\nAdditions to oil and gas properties\t(1297)\t(2380)\nAdditions to other assets and other property and equipment\t(102)\t(184)\nNet cash used in investing activities\t(1342)\t(1914)\nCash flows from financing activities:\t\t\nProceeds from issuance of senior notes net of discount\t1091\t0\nProceeds from issuance of convertible senior notes\t1323\t0\nPurchase of derivatives related to issuance of convertible senior notes\t(113)\t0\nBorrowing under credit facility\t800\t0\nRepayment of credit facility\t(800)\t0\nRepayment of senior notes including tender offer premiums\t(1198)\t0\nPayments of other liabilities\t(162)\t(10)\nPayments of financing fees net\t(36)\t0\nPurchases of treasury stock\t(174)\t(627)\nExercise of long-term incentive plan stock options and employee stock purchases\t6\t6\nDividends paid\t(255)\t(54)\nNet cash provided by (used in) financing activities\t482\t(685)\nNet increase (decrease) in cash cash equivalents and restricted cash\t686\t(312)\nCash cash equivalents and restricted cash beginning of period\t705\t825\nCash cash equivalents and restricted cash end of period\t1391\t513\n", "q10k_tbl_8": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t(in millions)\t\nBeginning employee-related obligations\t6\t27\nAdditions (a)\t72\t133\nCash payments\t(7)\t(154)\nEnding employee-related obligations\t71\t6\n", "q10k_tbl_9": "\tAs of September 30 2020\t\t\t\n\tFair Value Measurement\t\t\t\n\tQuoted Prices in Active Markets for Identical Assets (Level 1)\tSignificant Other Observable Inputs (Level 2)\tSignificant Unobservable Inputs (Level 3)\tTotal\n\t(in millions)\t\t\t\nAssets:\t\t\t\t\nCommodity price derivatives\t0\t49\t0\t49\nDeferred compensation plan assets\t68\t0\t0\t68\nInvestment in affiliate\t67\t0\t0\t67\nTotal assets\t135\t49\t0\t184\nLiabilities:\t\t\t\t\nCommodity price derivatives\t0\t65\t0\t65\n\t135\t(16)\t0\t119\n", "q10k_tbl_10": "\tAs of December 31 2019\t\t\t\n\tFair Value Measurement\t\t\t\n\tQuoted Prices in Active Markets for Identical Assets (Level 1)\tSignificant Other Observable Inputs (Level 2)\tSignificant Unobservable Inputs (Level 3)\tTotal\n\t(in millions)\t\t\t\nAssets:\t\t\t\t\nCommodity price derivatives\t0\t32\t0\t32\nDeferred compensation plan assets\t85\t0\t0\t85\nInvestment in affiliate\t187\t0\t0\t187\nContingent consideration\t0\t91\t0\t91\nTotal assets\t272\t123\t0\t395\nLiabilities:\t\t\t\t\nCommodity price derivatives\t0\t20\t0\t20\n\t272\t103\t0\t375\n", "q10k_tbl_11": "\tAs of September 30 2020\t\tAs of December 31 2019\t\n\tCarrying Value\tFair Value\tCarrying Value\tFair Value\n\t(in millions)\t\t\t\nAssets:\t\t\t\t\nCash and cash equivalents (a)\t1325\t1325\t631\t631\nRestricted cash (a)\t66\t66\t74\t74\nLiabilities:\t\t\t\t\nCurrent portion of long-term debt:\t\t\t\t\nSenior notes (b)\t140\t140\t450\t451\nLong-term debt:\t\t\t\t\nConvertible senior notes (b)\t1088\t1456\t0\t0\nSenior notes (b)\t2060\t2168\t1839\t1995\n", "q10k_tbl_12": "\t2020\tYear Ending December 31 2021\n\tFourth Quarter\t\nBrent collar contracts with short puts: (a)\t\t\nVolume per day (Bbl)\t115500\t0\nPrice per Bbl:\t\t\nCeiling\t69.78\t0\nFloor\t62.06\t0\nShort put\t53.56\t0\nBrent swap contracts:\t\t\nVolume per day (Bbl)\t155200\t0\nPrice per Bbl\t36.47\t0\nBrent call contracts sold:\t\t\nVolume per Bbl (b)\t0\t20000\nPrice per Bbl\t0\t69.74\nBrent collar contracts with short puts:\t\t\nVolume per day (Bbl) (c)\t30000\t96000\nPrice per Bbl:\t\t\nCeiling\t43.09\t50.61\nFloor\t34.83\t44.79\nShort put\t24.83\t34.88\n", "q10k_tbl_13": "\t2020\tYear Ending December 31 2021\n\tFourth Quarter\t\nNYMEX swap contracts:\t\t\nVolume per day (MMBtu)\t16739\t152466\nPrice per MMBtu\t2.43\t2.66\nNYMEX collar contracts:\t\t\nVolume per day (MMBtu)\t0\t150000\nPrice per MMBtu:\t\t\nCeiling\t0\t3.15\nFloor\t0\t2.50\nBasis swap contracts:\t\t\nPermian Basin index swap volume per day (MMBtu) (a)\t16739\t2466\nPrice differential ($/MMBtu)\t(1.59)\t(1.46)\n", "q10k_tbl_14": "As of December 31 2019\t\t\t\t\nType\tConsolidated Balance Sheet Location\tFair Value\tGross Amounts Offset in the Consolidated Balance Sheet\tNet Fair Value Presented in the Consolidated Balance Sheet\n\t\t(in millions)\t\t\nAssets:\t\t\t\t\nCommodity price derivatives\tDerivatives - current\t32\t0\t32\nContingent consideration\tOther assets - noncurrent\t91\t0\t91\nLiabilities:\t\t\t\t\nCommodity price derivatives\tDerivatives - current\t12\t0\t12\nCommodity price derivatives\tDerivatives - noncurrent\t8\t0\t8\n", "q10k_tbl_15": "Derivatives Not Designated as Hedging Instruments\tLocation of Gain (Loss) Recognized in Earnings on Derivatives\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t\t(in millions)\t\t\t\nCommodity price derivatives\tDerivative gain (loss) net\t(57)\t121\t82\t150\nInterest rate derivatives\tDerivative gain (loss) net\t0\t0\t(22)\t0\nContingent consideration\tInterest and other income (loss) net\t22\t(48)\t(42)\t(61)\n", "q10k_tbl_16": "\tAs of September 30 2020\tAs of December 31 2019\n\t(in millions except well counts)\t\nCapitalized exploratory well costs that have been suspended:\t\t\nOne year or less\t501\t660\nMore than one year\t3\t0\n\t504\t660\nNumber of wells or projects with exploratory well costs that have been suspended for a period greater than one year (a)\t1\t0\n", "q10k_tbl_17": "\tAs of September 30 2020\tAs of December 31 2019\n\t(in millions)\t\nOutstanding debt principal balances:\t\t\n7.50% senior notes due 2020\t0\t450\n3.45% senior notes due 2021\t140\t500\n3.95% senior notes due 2022\t244\t600\n0.25% convertible senior notes due 2025\t1323\t0\n4.45% senior notes due 2026\t500\t500\n7.20% senior notes due 2028\t241\t250\n1.90% senior notes due 2030\t1100\t0\n\t3548\t2300\nIssuance costs and discounts\t(260)\t(11)\nTotal debt\t3288\t2289\nLess current portion of long-term debt\t(140)\t(450)\nLong-term debt\t3148\t1839\n", "q10k_tbl_18": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nContractual interest coupon\t1\t0\t1\t0\nAmortization of debt discount and issuance costs\t12\t0\t19\t0\n\t13\t0\t20\t0\n", "q10k_tbl_19": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nRestricted stock - Equity Awards\t15\t14\t37\t65\nRestricted stock - Liability Awards (a)\t4\t2\t7\t14\nPerformance unit awards\t6\t5\t15\t15\nEmployee stock purchase plan\t0\t0\t2\t1\n\t25\t21\t61\t95\n", "q10k_tbl_20": "\tNine Months Ended September 30 2020\t\t\t\n\tRestricted Stock Equity Awards\tRestricted Stock Liability Awards\tPerformance Units\tStock Options\nBeginning incentive compensation awards\t824193\t246851\t116215\t121953\nAwards granted\t383771\t135176\t132621\t0\nAwards forfeited\t(12438)\t(5257)\t0\t0\nAwards vested (a)\t(319203)\t(102588)\t(4735)\t0\nOptions exercised\t0\t0\t0\t(7728)\nEnding incentive compensation awards\t876323\t274182\t244101\t114225\n", "q10k_tbl_21": "\tNine Months Ended September 30 2020\n\t(in millions)\nBeginning asset retirement obligations\t191\nNew wells placed on production\t2\nChanges in estimates (a)\t(3)\nLiabilities settled\t(30)\nAccretion of discount\t7\nEnding asset retirement obligations\t167\nLess current portion of asset retirement obligations\t(32)\nAsset retirement obligations - noncurrent\t135\n", "q10k_tbl_22": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nPressure pumping and related services charges (a)\t21\t134\t163\t401\n", "q10k_tbl_23": "\tSix Months Ended June 30\t\n\t2020\t2019\n\t(in millions)\t\nRevenue - Service revenue\t501\t1076\nCost of services (exclusive of depreciation and amortization)\t369\t768\nNet income (loss)\t(34)\t106\n", "q10k_tbl_24": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nOil sales\t724\t1068\t2101\t3032\nNGL sales\t129\t116\t344\t373\nGas sales\t69\t51\t172\t162\nTotal oil and gas sales\t922\t1235\t2617\t3567\nSales of purchased oil\t934\t1166\t2373\t3455\nSales of purchased gas\t1\t5\t18\t8\nTotal sales of purchased oil and gas\t935\t1171\t2391\t3463\nTotal revenue from contracts with purchasers\t1857\t2406\t5008\t7030\n", "q10k_tbl_25": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nInterest income\t0\t3\t3\t15\nDeferred compensation plan income\t6\t4\t3\t10\nSeismic data sales\t0\t5\t2\t5\nSeverance and sales tax refunds\t0\t6\t0\t6\nContingent consideration fair value adjustment (Note 3 and Note 4)\t22\t(48)\t(42)\t(61)\nInvestment in affiliate fair value adjustment (Note 4)\t(18)\t(193)\t(119)\t(22)\nOther\t3\t1\t8\t5\n\t13\t(222)\t(145)\t(42)\n", "q10k_tbl_26": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nRestructuring charges (Note 3)\t74\t1\t75\t159\nSouth Texas deficiency fee obligation (Note 4)\t0\t0\t69\t0\nTermination and idle drilling and frac equipment charges (a)\t16\t5\t69\t18\nLoss on early extinguishment of debt (Note 7)\t0\t0\t27\t0\nTransportation commitment charges (b)\t4\t5\t12\t70\nLegal and environmental charges\t2\t4\t7\t12\nAsset impairment (Note 4)\t0\t4\t1\t34\nVertical integration services (income) loss net (c)\t(2)\t1\t(1)\t19\nAsset divestiture-related charges (Note 3)\t0\t4\t0\t28\nAccelerated depreciation (Note 3)\t0\t0\t0\t23\nOther\t4\t8\t14\t27\n\t98\t32\t273\t390\n", "q10k_tbl_27": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nGross revenues\t11\t25\t36\t89\nGross costs and expenses\t9\t26\t35\t108\n", "q10k_tbl_28": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\n\t2020\t\t2019\t2020\t2019\n\t(in millions)\t\t\t\t\nCurrent tax benefit (provision)\t(1)\t\t0\t10\t0\nDeferred tax benefit (provision)\t(3)\t\t(72)\t8\t(127)\nIncome tax benefit (provision)\t(4)\t\t(72)\t18\t(127)\nEffective tax rate\t(26\t%)\t24%\t10%\t24%\n", "q10k_tbl_29": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nNet income (loss) attributable to common stockholders\t(20)\t231\t(170)\t412\nParticipating share-based earnings\t0\t(1)\t0\t(2)\nBasic and diluted net income (loss) attributable to common stockholders\t(20)\t230\t(170)\t410\nBasic and diluted weighted average shares outstanding\t165\t167\t165\t168\n", "q10k_tbl_30": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t(in millions)\t\t\t\nShare repurchases (a)\t0\t200\t160\t600\n", "q10k_tbl_31": "\tThree Months Ending December 31 2020\n\tGuidance\n\t($ in millions except per BOE amounts)\nAverage daily production (MBOE)\t355 - 370\nAverage daily oil production (MBO)\t197 - 207\nProduction costs per BOE\t6.25 - $7.75\nDD&A per BOE\t11.75 - $13.75\nExploration and abandonments expense\t5 - $15\nGeneral and administrative expense\t56 - $66\nAccretion of discount on asset retirement obligations\t2 - $5\nInterest expense\t35 - $40\nOther expense\t20 - $30\nCash flow impact from firm transportation (a)\t(80) - $(40)\nCurrent income tax provision\t<5\nEffective tax rate\t<21%\n", "q10k_tbl_32": "\tNine Months Ended September 30 2020\nOil (Bbls)\t212718\nNGL (Bbls)\t85707\nGas (Mcf)\t418547\nTotal (BOE)\t368183\n", "q10k_tbl_33": "\tNine Months Ended September 30 2020\t\n\tDevelopment\tExploration/Extension\nBeginning wells in progress\t5\t234\nWells spud\t4\t170\nSuccessful wells\t(7)\t(191)\nEnding wells in progress\t2\t213\n", "q10k_tbl_34": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\t% Change\t\t2020\t2019\t% Change\nOil (Bbls)\t200670\t215204\t(7\t%)\t212718\t209666\t1%\nNGL (Bbls)\t82614\t74814\t10%\t\t85707\t69682\t23%\nGas (Mcf)\t430106\t364240\t18%\t\t418547\t360939\t16%\nTotal (BOEs)\t354968\t350725\t1%\t\t368183\t339504\t8%\n", "q10k_tbl_35": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t% Change\t\t2020\t2019\t% Change\t\t\t\t\t\t\t\nOil per Bbl\t39.22\t53.93\t(27\t%)\t36.05\t52.97\t(32\t%)\t\t\t\t\t\t\nNGL per Bbl\t16.93\t16.81\t1%\t\t14.64\t19.61\t(25\t%)\t\t\t\t\t\t\nGas per Mcf\t1.74\t1.54\t13%\t\t1.50\t1.64\t(9\t%)\t\t\t\t\t\t\nTotal per BOE\t28.22\t38.28\t(26\t%)\t25.94\t38.48\t(33\t%)\t\t\t\t\t\t\n", "q10k_tbl_36": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\n\t(in millions)\t\t\t\t\t\nSales of purchased oil and gas\t935\t1171\t(236)\t2391\t3463\t(1072)\nPurchased oil and gas\t998\t1125\t(127)\t2598\t3184\t(586)\nNet effect on earnings\t(63)\t46\t(109)\t(207)\t279\t(486)\n", "q10k_tbl_37": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\n\t(in millions)\t\t\t\t\t\nInterest and other income (loss) net\t13\t(222)\t235\t(145)\t(42)\t(103)\n", "q10k_tbl_38": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\n\t(in millions)\t\t\t\t\t\nNoncash derivative gain (loss) net\t24\t97\t(73)\t(28)\t116\t(144)\nCash receipts (payments) on settled derivative instruments net\t(81)\t24\t(105)\t88\t34\t54\nDerivative gain (loss) net\t(57)\t121\t(178)\t60\t150\t(90)\n", "q10k_tbl_39": "\tThree Months Ended September 30 2020\t\t\tNine Months Ended September 30 2020\t\t\n\tNet cash payments\tPrice impact\t\tNet cash receipts (payments)\tPrice impact\t\n\t(in millions)\t\t\t(in millions)\t\t\nOil derivative receipts (payments) (a)\t(36)\t(1.93)\tper Bbl\t124\t2.12\tper Bbl\nGas derivative payments\t(2)\t(0.04)\tper Mcf\t(2)\t(0.02)\tper Mcf\nTotal net commodity derivative receipts (payments)\t(38)\t\t\t122\t\t\n", "q10k_tbl_40": "\tThree Months Ended September 30 2019\t\t\tNine Months Ended September 30 2019\t\t\n\tNet cash receipts (payments)\tPrice impact\t\tNet cash receipts (payments)\tPrice impact\t\n\t(in millions)\t\t\t(in millions)\t\t\nOil derivative receipts\t32\t1.62\tper Bbl\t55\t0.96\tper Bbl\nGas derivative payments\t(8)\t(0.23)\tper Mcf\t(21)\t(0.21)\tper Mcf\nTotal net commodity derivative receipts\t24\t\t\t34\t\t\n", "q10k_tbl_41": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nGain (loss) on disposition of assets net\t2\t20\t(18)\t7\t(477)\t484\t\t\t\t\t\t\n", "q10k_tbl_42": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nOil and gas production costs\t163\t227\t(64)\t506\t667\t(161)\t\t\t\t\t\t\n", "q10k_tbl_43": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t% Change\t\t2020\t2019\t% Change\t\t\t\t\t\t\t\nLease operating expense per BOE (a)\t3.00\t4.49\t(33\t%)\t3.03\t4.84\t(37\t%)\t\t\t\t\t\t\nGathering processing and transportation expense per BOE (b)\t2.55\t2.17\t18%\t\t2.48\t2.14\t16%\t\t\t\t\t\t\t\nWorkover costs per BOE (a)\t0.19\t0.68\t(72\t%)\t0.24\t0.80\t(70\t%)\t\t\t\t\t\t\nNet natural gas plant income per BOE (c)\t(0.75)\t(0.31)\t142%\t\t(0.74)\t(0.59)\t25%\t\t\t\t\t\t\t\n\t4.99\t7.03\t(29\t%)\t5.01\t7.19\t(30\t%)\t\t\t\t\t\t\n", "q10k_tbl_44": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\n\t(in millions)\t\t\t\t\t\nProduction and ad valorem taxes\t63\t86\t(23)\t182\t223\t(41)\n", "q10k_tbl_45": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t% Change\t\t2020\t2019\t% Change\t\t\t\t\t\t\t\nProduction taxes per BOE\t1.20\t1.71\t(30\t%)\t1.11\t1.73\t(36\t%)\t\t\t\t\t\t\nAd valorem taxes per BOE\t0.70\t0.96\t(27\t%)\t0.69\t0.68\t1%\t\t\t\t\t\t\t\n\t1.90\t2.67\t(29\t%)\t1.80\t2.41\t(25\t%)\t\t\t\t\t\t\n", "q10k_tbl_46": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nDepletion depreciation and amortization\t393\t438\t(45)\t1243\t1271\t(28)\t\t\t\t\t\t\n", "q10k_tbl_47": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t% Change\t\t2020\t2019\t% Change\t\t\t\t\t\t\t\nDD&A per BOE\t12.04\t13.57\t(11\t%)\t12.32\t13.71\t(10\t%)\t\t\t\t\t\t\nDepletion expense per BOE\t11.38\t12.82\t(11\t%)\t11.68\t12.92\t(10\t%)\t\t\t\t\t\t\n", "q10k_tbl_48": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nGeological and geophysical\t10\t10\t0\t26\t41\t(15)\t\t\t\t\t\t\nExploratory/extension well costs\t0\t1\t(1)\t0\t4\t(4)\t\t\t\t\t\t\nLeasehold abandonments and other\t6\t0\t6\t9\t1\t8\t\t\t\t\t\t\n\t16\t11\t5\t35\t46\t(11)\t\t\t\t\t\t\n", "q10k_tbl_49": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nNoncash general and administrative expense\t15\t12\t3\t30\t41\t(11)\t\t\t\t\t\t\nCash general and administrative expense\t49\t60\t(11)\t150\t205\t(55)\t\t\t\t\t\t\n\t64\t72\t(8)\t180\t246\t(66)\t\t\t\t\t\t\n", "q10k_tbl_50": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t% Change\t\t2020\t2019\t% Change\t\nNoncash general and administrative expense per BOE\t0.47\t0.38\t24%\t\t0.30\t0.44\t(32\t%)\nCash general and administrative expense per BOE\t1.49\t1.86\t(20\t%)\t1.49\t2.22\t(33\t%)\n\t1.96\t2.24\t(13\t%)\t1.79\t2.66\t(33\t%)\n", "q10k_tbl_51": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nNoncash interest expense\t16\t1\t15\t34\t4\t30\t\t\t\t\t\t\nCash interest expense\t18\t28\t(10)\t60\t84\t(24)\t\t\t\t\t\t\n\t34\t29\t5\t94\t88\t6\t\t\t\t\t\t\n", "q10k_tbl_52": "\tThree Months Ended September 30\t\t\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\t2020\t2019\tChange\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\nOther expense\t98\t32\t66\t273\t390\t(117)\t\t\t\t\t\t\n", "q10k_tbl_53": "\tThree Months Ended September 30\t\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t\t2019\tChange\t\t2020\t2019\tChange\t\t\t\t\t\t\t\n\t(in millions)\t\t\t\t\t\t\t\t\nIncome tax benefit (provision)\t(4)\t\t(72)\t68\t\t18\t(127)\t145\t\t\t\t\t\t\t\nEffective tax rate\t(26\t%)\t24%\t(50\t%)\t10%\t24%\t(14\t%)\t\t\t\t\t\t\n", "q10k_tbl_54": "\tNine Months Ended September 30\t\t\n\t2020\t2019\tChange\n\t(in millions)\t\t\nNet cash provided by operating activities\t1546\t2287\t(741)\nNet cash used in investing activities\t(1342)\t(1914)\t(572)\nNet cash provided by (used in) financing activities\t482\t(685)\t(1167)\n", "q10k_tbl_55": "\t2020\tYear Ending December 31 2021\n\tFourth Quarter\t\nAverage forward Brent oil price per Bbl\t42.72\t44.83\nAverage forward NYMEX gas price per MMBtu\t2.82\t2.92\nPermian Basin gas index swap contracts:\t\t\nAverage forward basis differential price per MMBtu (a)\t(0.94)\t(0.31)\n", "q10k_tbl_56": "\t2020\tYear Ending December 31 2021\n\tFourth Quarter\t\nAverage forward Brent oil price per Bbl\t41.42\t43.46\nAverage forward NYMEX gas price per MMBtu\t3.05\t3.02\nPermian Basin gas index swap contracts:\t\t\nAverage forward basis differential price per MMBtu (a)\t(0.27)\t(0.23)\n", "q10k_tbl_57": "\tThree Months Ended September 30 2020\t\t\t\nPeriod\tTotal Number of Shares Purchased (a)\tAverage Price Paid per Share\tTotal Number of Shares Purchased As Part of Publicly Announced Plans or Programs\tApproximate Dollar Amount of Shares that May Yet Be Purchased under Plans or Programs (b)\nJuly 2020\t0\t0\t0\t1090693886\nAugust 2020\t18977\t102.16\t0\t1090693886\nSeptember 2020\t0\t0\t0\t1090693886\n\t18977\t\t0\t\n", "q10k_tbl_58": "Exhibit Number\tDescription\n2.1\tAgreement and Plan of Merger dated as of October 20 2020 by and among Pioneer Natural Resources Company Pearl First Merger Sub Inc. Pearl Second Merger Sub LLC Pearl Opco Merger Sub LLC Parsley Energy Inc. and Parsley Energy LLC (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K File No. 1-13245 filed with the SEC on October 21 2020).*\n4.1\tThird Supplemental Indenture dated August 11 2020 by and between Pioneer Natural Resources Company and Wells Fargo Bank National Association (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K File No. 1-13245 filed with the SEC on August 11 2020).\n10.1 (a)\tThird Amendment to Pioneer Natural Resources USA Inc. 401(k) and Matching Plan (Amended and Restated Effective as of January 1 2020) dated August 27 2020.\n10.2\tVoting and Support Agreement dated as of October 20 2020 by and between Q-Jagged Peak and Pioneer Natural Resources Company(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K File No. 1-13245 filed with the SEC on October 21 2020).\n10.3\tVoting and Support Agreement dated as of October 20 2020 by and between Bryan Sheffield and Pioneer Natural Resources Company (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K File No. 1-13245 filed with the SEC on October 21 2020).\n31.1 (a)\tChief Executive Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.\n31.2 (a)\tChief Financial Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.\n32.1 (b)\tChief Executive Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.\n32.2 (b)\tChief Financial Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.\n101.INS (a)\tInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH (a)\tInline XBRL Taxonomy Extension Schema Document.\n101.CAL (a)\tInline XBRL Taxonomy Extension Calculation Linkbase Document.\n101.DEF (a)\tInline XBRL Taxonomy Extension Definition Linkbase Document.\n101.LAB (a)\tInline XBRL Taxonomy Extension Label Linkbase Document.\n101.PRE (a)\tInline XBRL Taxonomy Extension Presentation Linkbase Document.\n104\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).\n"}{"bs": "q10k_tbl_3", "is": "q10k_tbl_4", "cf": "q10k_tbl_7"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 1-13245
______________________________
PIONEER NATURAL RESOURCES COMPANY
(Exact name of Registrant as specified in its charter)
______________________________
Delaware
75-2702753
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
777 Hidden Ridge
Irving, Texas75038
(Address of principal executive offices and zip code)
(972) 444-9001
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, par value $.01 per share
PXD
New York Stock Exchange
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
______________________________
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
Number of shares of Common Stock outstanding as of November 4, 2020 164,406,947
The information in this Quarterly Report on Form 10-Q (this "Report") contains forward-looking statements that involve risks and uncertainties. When used in this document, the words "believes," "plans," "expects," "anticipates," "forecasts," "intends," "continue," "may," "will," "could," "should," "future," "potential," "estimate" or the negative of such terms and similar expressions as they relate to Pioneer Natural Resources Company ("Pioneer" or the "Company") are intended to identify forward-looking statements, which are generally not historical in nature. The forward-looking statements are based on the Company's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company's control.
These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand; the impact of a widespread outbreak of an illness, such as the COVID-19 pandemic, on global and U.S. economic activity; competition; the ability to obtain environmental and other permits and the timing thereof; other government regulation or action; the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms; litigation; the costs and results of drilling and operations; availability of equipment, services, resources and personnel required to perform the Company's drilling and operating activities; access to and availability of transportation, processing, fractionation, refining, storage and export facilities; Pioneer's ability to replace reserves; implement its business plans or complete its development activities as scheduled; access to and cost of capital; the financial strength of counterparties to Pioneer's credit facility, investment instruments and derivative contracts and purchasers of Pioneer's oil, NGL and gas production; uncertainties about estimates of reserves; identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying forecasts, including forecasts of production, cash flow, well costs, capital expenditures, rates of return, expenses, cash flow from purchases and sales of oil and gas, net of firm transportation commitments; sources of funding; tax rates; quality of technical data; environmental and weather risks, including the possible impacts of climate change; cybersecurity risks; ability to implement stock repurchases; the risks associated with the ownership and operation of the Company's oilfield services businesses and acts of war or terrorism. These and other risks are described in Pioneer's Annual Report on Form 10-K for the year ended December 31, 2019, Quarterly Reports on Form 10-Q filed thereafter and other filings with the United States Securities and Exchange Commission. In addition, the Company may be subject to currently unforeseen risks that may have a materially adverse effect on it.
Additionally, the information in this Report contains forward-looking statements related to the recently announced merger transaction between the Company and Parsley Energy, Inc. ("Parsley"). Such forward-looking statements are subject to risks and uncertainties that are difficult to predict and, in many cases, beyond the Company's control. These risks and uncertainties include, among other things, the risk that the businesses of Pioneer and Parsley will not be integrated successfully; the cost savings, synergies and growth from the proposed transaction may not be fully realized or may take longer to realize than expected; management time may be diverted on transaction-related issues; the potential adverse effect of future regulatory or legislative actions on Pioneer and Parsley or the industries in which they operate, including the risk of new restrictions with respect to development activities on Pioneer's or Parsley's assets; the credit ratings of the combined company or its subsidiaries may be different from what Pioneer expects; Pioneer or Parsley may be unable to obtain governmental and regulatory approvals required for the proposed transaction, or that required governmental and regulatory approvals may delay the proposed transaction or result in the imposition of conditions that could reduce the anticipated benefits from the proposed transaction or cause the parties to abandon the proposed transaction; a condition to closing of the proposed transaction may not be satisfied; the length of time necessary to consummate the proposed transaction may be longer than anticipated for various reasons; potential liability resulting from litigation related to the proposed transaction; the potential impact of the announcement or consummation of the proposed transaction on relationships with customers, suppliers, and competitors; and transaction costs may be higher than anticipated.
Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. See "Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," "Part 1, Item 3. Quantitative and Qualitative Disclosures About Market Risk" and "Part II, Item 1A. Risk Factors" in this Report and "Part I, Item 1. Business — Competition, Markets and Regulations," "Part I, Item 1A. Risk Factors," "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 for a description of various factors that could materially affect the ability of Pioneer to achieve the anticipated results described in the forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Pioneer undertakes no duty to publicly update these statements except as required by law.
Definitions of Certain Terms and Conventions Used Herein
Within this Report, the following terms and conventions have specific meanings:
•"Bbl" means a standard barrel containing 42 United States gallons.
•"Bcf" means one billion cubic feet and is a measure of gas volume.
•"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.
•"Brent" means Brent oil price, a major trading classification of light sweet oil that serves as a benchmark price for oil worldwide.
•"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.
•"DD&A" means depletion, depreciation and amortization.
•"GAAP" means accounting principles generally accepted in the United States of America.
•"HH" means Henry Hub, a distribution hub in Louisiana that serves as the delivery location for gas futures contracts on the NYMEX.
•"MBbl" means one thousand Bbls.
•"MBOE" means one thousand BOEs.
•"Mcf" means one thousand cubic feet and is a measure of gas volume.
•"MMBtu" means one million Btus.
•"NGLs" means natural gas liquids, which are the heavier hydrocarbon liquids that are separated from the gas stream; such liquids include ethane, propane, isobutane, normal butane and natural gasoline.
•"NYMEX" means the New York Mercantile Exchange.
•"OPEC" means the Organization of Petroleum Exporting Countries.
•"Pioneer" or the "Company" means Pioneer Natural Resources Company and its subsidiaries.
•"Proved reserves" mean those quantities of oil and gas, which, by analysis of geosciences 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.
(i) The area of the reservoir considered as proved includes: (A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons ("LKH") as seen in a well penetration unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty.
(iii) Where direct observation from well penetrations has defined a highest known oil ("HKO") elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering or performance data and reliable technology establish the higher contact with reasonable certainty.
(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities.
(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month
within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.
•"SEC" means the United States Securities and Exchange Commission.
•"U.S." means United States.
•"WTI" means West Texas Intermediate, a light sweet blend of oil produced from fields in western Texas and is a grade of oil used as a benchmark in oil pricing.
•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.
•All currency amounts are expressed in U.S. dollars.
Common stock, $0.01 par value; 500,000,000 shares authorized; 175,462,969 and 175,057,889 shares issued as of September 30, 2020 and December 31, 2019, respectively
2
2
Additional paid-in capital
9,305
9,161
Treasury stock at cost: 11,059,909 and 9,511,248 shares as of September 30, 2020 and December 31, 2019, respectively
(1,235)
(1,069)
Retained earnings
3,582
4,025
Total equity
11,654
12,119
Commitments and contingencies
$
18,977
$
19,067
The financial information included as of September 30, 2020 has been prepared by management
without audit by independent registered public accountants.
The accompanying notes are an integral part of these consolidated financial statements.
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 in the Permian Basin in West Texas.
NOTE 2. Basis of Presentation
Presentation. In the opinion of management, the unaudited interim consolidated financial statements of the Company as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 include all adjustments and accruals, consisting only of normal, recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods in conformity with generally accepted accounting principles in the United States ("GAAP"). The operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of results for a full year.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These unaudited interim 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, 2019.
Use of estimates in the preparation of financial statements. Preparation of the Company's unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Depletion of oil and gas properties is calculated using estimates of proved oil and gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of goodwill and proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of proved, probable and possible reserves and commodity price outlooks. Actual results could differ from the estimates and assumptions utilized.
Impact of the COVID-19 Pandemic. A novel strain of the coronavirus ("COVID-19") surfaced in late 2019 and has spread around the world, including to the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The COVID-19 pandemic has significantly affected the global economy, disrupted global supply chains and created significant volatility in the financial markets. In addition, the COVID-19 pandemic has resulted in travel restrictions, business closures and other restrictions that have disrupted the demand for oil throughout the world and when combined with pressures on the global supply-demand balance for oil and related products, resulted in significant volatility in oil prices beginning in late February 2020. The length of this demand disruption is unknown, and there is significant uncertainty regarding the long-term impact of the effects of the COVID-19 pandemic to global oil demand, which has negatively impacted the Company's results of operations and led to a significant reduction in the Company's 2020 capital activities.
Adoption of new accounting standards. In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). Effective January 1, 2020, the Company adopted ASU 2016-13 prospectively. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. The impact of the adoption of ASU 2016-13 was not material.
The Company is exposed to credit losses primarily through sales of oil, NGLs, gas and purchased oil and gas. The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimated amount of accounts receivable that may not be collected is based on an aging of the accounts receivable balances and the financial condition of the Company's customers. The Company's
monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company has considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic in determining its estimate of expected credit losses.
New accounting pronouncements. In August 2020, the FASB issued ASU 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this ASU amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method will no longer be available. Entities may adopt this ASU using either a full or modified retrospective approach, and it is effective for interim and annual reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2020. This ASU is applicable to the Company’s 0.25% convertible senior notes due 2025. The Company is assessing the impact the adoption of this ASU will have on its consolidated financial statements.
NOTE 3. Divestitures, Decommissioning and Restructuring Activities
Divestitures
•In May 2020, the Company completed the sale of certain vertical wells and approximately 1,500 undeveloped acres in Upton County of the Permian Basin to an unaffiliated third party for net cash proceeds of $6 million. The Company recorded a gain of $6 million associated with the sale.
•In July 2019, the Company completed the sale of certain vertical wells and approximately 1,400 undeveloped acres in Martin County of the Permian Basin to an unaffiliated third party for net cash proceeds of $27 million. The Company recorded a gain of $26 million associated with the sale.
•In June 2019, the Company completed the sale of certain vertical wells and approximately 1,900 undeveloped acres in Martin County of the Permian Basin to an unaffiliated third party for net cash proceeds of $38 million. The Company recorded a gain of $31 million associated with the sale.
•In May 2019, the Company completed the sale of its Eagle Ford assets and other remaining assets in South Texas (the "South Texas Divestiture") to an unaffiliated third party in exchange for total consideration having an estimated fair value of $210 million. The fair value of the consideration included (i) net cash proceeds of $2 million, (ii) $136 million in contingent consideration and (iii) a $72 million receivable associated with estimated deficiency fees to be paid by the buyer. The Company recorded a loss of $525 million associated with the sale.
Contingent Consideration. Per the terms of the purchase and sale agreement, the Company was entitled to receive contingent consideration based on future annual oil and NGL prices during each of the five years from 2020 to 2024. The Company revalued the contingent consideration using an option pricing model each reporting period prior to the three months ended September 30, 2020. In July 2020, the Company received cash proceeds of $49 million to fully satisfy the South Texas Divestiture contingent consideration. The Company recorded a noncash mark-to-market ("MTM") gain of $22 million and a noncash MTM loss of $42 million to interest and other income to adjust the contingent consideration to its estimated fair value during the three and nine months ended September 30, 2020, respectively. See Note 4, Note 5and Note 13 for additional information.
Deficiency Fee Obligation. The Company transferred its long-term midstream agreements and associated minimum volume commitments ("MVC") to the buyer. However, the Company retained the obligation to pay 100 percent of any deficiency fees associated with the MVC from January 2019 through July 2022. The Company determines the fair value of the deficiency fee obligation using a probability weighted present value model. The deficiency fee obligation is included in current or noncurrent liabilities in the consolidated balance sheets, based on the estimated timing of payments. During the nine months ended September 30, 2020, the Company recorded a charge of $69 million in other expense to increase the Company's forecasted deficiency fee payments as a result of a reduction in planned drilling activities by the buyer of the assets. The estimated remaining deficiency fee obligation
was $321 million as of September 30, 2020. See Note 4,Note 10 and Note 14for additional information.
Deficiency Fee Receivable. The buyer is required to reimburse the Company for 18 percent of the deficiency fees paid under the transferred midstream agreements from January 2019 through July 2022. Such reimbursement will be paid by the buyer in installments beginning in 2023 through 2025. The Company determines the fair value of the deficiency fee receivable using a credit risk-adjusted valuation model. The deficiency fee receivable is included in noncurrent other assets in the consolidated balance sheets. See Note 4 for additional information.
Restricted Cash. As ofSeptember 30, 2020,the Company has $66 million deposited in an escrow account to be used to fund future deficiency fee payments. The escrow account balance is included in restricted cash in the consolidated balance sheets as of September 30, 2020. Beginning in 2021, the required escrow balance will decline to $50 million and, to the extent that there is any remaining balance after the payment of deficiency fees, the balance will become unrestricted and revert to the Company on March 31, 2023.
Decommissioning
In November 2018, the Company announced plans to close its sand mine located in Brady, Texas and transition its proppant supply requirements to West Texas sand sources. During the nine months ended September 30, 2019, the Company recorded $23 million of accelerated depreciation,$13 million of inventory and other property and equipmentimpairment charges and $12 million of sand mine closure-related costs. See Note 4 and Note 14for additional information.
Restructuring
During the third quarter of 2020, the Company announced a corporate restructuring to reduce its staffing levels to correspond with a planned reduction in future activity levels. The restructuring resulted in approximately 300 employees being involuntarily separated from the Company in October 2020. The Company recorded $74 million of employee-related charges, including $3 million of noncash stock-based compensation expense related to the accelerated vesting of certain equity awards, in other expense in the consolidated statements of operations during the three and nine months ended September 30, 2020. See Note 8 and Note 14 for additional information.
In June 2020, the Company implemented changes to its well services business, including a staffing reduction of approximately 50 employees. The changes were made to more closely align the well services cost structure and headcount with the Company's reduction in expected activity levels as a result of the COVID-19 pandemic's impact on oil prices.
During 2019, the Company implemented a corporate restructuring program to align its cost structure with the needs of a Permian Basin-focused company. The restructuring occurred in three phases (collectively, the "2019 Corporate Restructuring Program") as follows:
•In March 2019, the Company made certain changes to its leadership and organizational structure, which included the early retirement and departure of certain officers of the Company,
•In April 2019, the Company adopted a voluntary separation program ("VSP") for certain eligible employees, and
•In May 2019, the Company implemented an involuntary separation program ("ISP").
The employee-related costs associated with restructuring activities were primarily recorded in other expense in the consolidated statements of operations. Obligations associated with employee-related charges are included in accounts payable - due to affiliates in the consolidated balance sheets. See Note 14 for additional information.
The changes in the Company's total employee-related obligations are as follows:
Nine Months Ended September 30,
2020
2019
(in millions)
Beginning employee-related obligations
$
6
$
27
Additions (a)
72
133
Cash payments
(7)
(154)
Ending employee-related obligations
$
71
$
6
______________________
(a)Additions for the nine months ended September 30, 2020 primarily represent employee-related charges associated with the 2020 corporate restructuring of $74 million and the Company's staffing reduction in its well services business of $1 million. Additions for the nine months ended September 30, 2019 primarily represent employee-related charges associated with the 2019 Corporate Restructuring Program of $156 million. Additions exclude $3 million and $23 million of noncash stock based compensation expense for the nine months ended September 30, 2020 and September 30, 2019, respectively. See Note 14 for additional information.
NOTE 4. Fair Value Measurements
The Company determines fair value based on the price that would be received from selling an asset or 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 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 three input levels of the fair value hierarchy are as follows:
•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, typically reflecting management's estimate of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore, determined using model-based techniques, including discounted cash flow models.