Pioneer Reports Says 4Q05 Net Income Up by 38%
Pioneer Natural Resources Company (NYSE: PXD) reports financial and operating results for the quarter and year ended December 31, 2005.
For the fourth quarter of 2005, Pioneer reported net income of $141 million, or $1.08 per diluted share, an increase of 38% over net income for the same period last year of $102 million, or $.69 per diluted share. Income from continuing operations was $140 million, or $1.07 per diluted share, compared to income from continuing operations of $98 million, or $.66 per diluted share, for the same period in 2004.
Cash flow from operations for the fourth quarter was $372 million compared to $337 million for the same period in 2004. The increase in operating cash flow is attributable to higher prices for oil, gas and natural gas liquids partially offset by cost increases.
During 2005, Pioneer repurchased 20 million shares under announced share repurchase programs for $940 million, including $641 million of the $650 million share repurchase program announced on September 1 for execution during 2005. A $300 million repurchase program was concluded earlier in the year. An additional $350 million share repurchase program is expected to be initiated if the divestitures of Argentina and deepwater Gulf of Mexico assets are successful.
Fourth quarter oil and gas sales averaged 170,619 barrels oil equivalent per day (BOEPD). Fourth quarter oil sales averaged 44,609 barrels per day (BPD) and natural gas liquids sales averaged 21,421 BPD. Gas sales in the fourth quarter averaged 628 million cubic feet per day (MMcfpd). Fourth quarter reported prices for oil and natural gas liquids were $39.15 and $37.41 per barrel, respectively. The worldwide reported price for gas was $6.72 per thousand cubic feet (Mcf). North American reported gas prices averaged $8.37 per Mcf.
Fourth quarter production costs averaged $7.55 per barrel of oil equivalent (BOE). Exploration and abandonment costs were $83 million for the quarter and included $23 million of dry hole and abandonments associated primarily with an unsuccessful well in the Falcon area of the deepwater Gulf of Mexico and unsuccessful wells in Argentina, $28 million of geologic and geophysical expenses including seismic costs and $32 million of delay rentals, unproved acreage abandonments and other related costs.
For the same quarter last year, adjusted to exclude discontinued operations from asset sales, Pioneer reported oil and gas sales of 185,420 BOEPD, including oil sales of 47,459 BPD, natural gas liquids sales of 21,287 BPD and gas sales of 700 MMcfpd. Reported prices for fourth quarter 2004 were $35.96 per barrel for oil, $30.68 per barrel for natural gas liquids and $4.42 per Mcf for gas. North American gas prices averaged $5.24 per Mcf.
For the twelve months ended December 31, 2005, net income was $535 million, or $3.80 per diluted share, compared to $313 million, or $2.46 per diluted share for the prior year. Income from continuing operations was $424 million, or $3.02 per diluted share, compared to income from continuing operations of $299 million, or $2.35 per diluted share, for the same period in 2004. Cash flow from operations for 2005 was a record $1.3 billion compared to $1.1 billion in 2004.
Full year 2005 oil and gas sales averaged 175,571 BOEPD, including oil sales of 44,087 BPD, natural gas liquids sales of 19,729 BPD and gas sales of 671 MMcfpd. Reported prices for 2005 were $37.22 per barrel for oil, $32.22 per barrel for natural gas liquids and $5.66 per Mcf for gas, while North American gas prices averaged $6.88 per Mcf.
Full year 2004 oil and gas sales averaged 177,223 BOEPD, including oil sales of 44,982 BPD, natural gas liquids sales of 21,649 BPD and gas sales of 664 MMcfpd. Reported prices for 2004 were $31.60 per barrel for oil, $25.54 per barrel for natural gas liquids and $4.30 per Mcf for gas, while North American gas prices averaged $5.12 per Mcf.
Pioneer's financial results and oil and gas hedges are outlined on the attached schedules. The Company will defer providing guidance ranges for future oil and gas production and operating and other costs until the results of the Gulf of Mexico asset divestiture are known.
During 2005, Pioneer drilled a total of 820 wells, 87% of which were in North America, and had 157 successful wells in the process of being completed and brought on production at the end of the year.
In 2006, Pioneer will significantly increase its drilling
activities onshore North America. Most of the onshore program targets
resource plays in the U.S. and Canada and includes development of
existing fields as well as several pilots to test new plays. The
Company will also be active throughout 2006 on two longer-term
development projects approved over the last five months, the South
Coast gas project offshore South Africa and the Oooguruk oil field
development offshore the North Slope of Alaska. Exploration wells are
currently drilling in Alaska and offshore Nigeria, and Pioneer also
expects increased activity on its acreage in Tunisia this year.
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