Parsley Energy — Q3 2020 Earnings Presentation
30 slides from Parsley Energy's earnings presentation, Nov 4, 2020
Slide 1: Q3 2020 Earnings
Q3 2020 EARNINGS November 5, 2020 Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 Except for historical information contained herein, the statements in this presentation are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the busines
Slide 3: Certain Notices
Certain Notices Additional Information and Where to Find It This communication may be deemed to be solicitation material in respect of the proposed transaction between Pioneer and Parsley. The proposed transaction will be submitted to Pioneer’s stockholders and Parsley’s stockholders for their consi
Slide 4: Creating Differentiated Value
Creating Differentiated Value 1) Free cash flow (FCF) and return on capital employed (ROCE) are non-GAAP financial measures; see supplemental slides. 2) Q3 2020 free cash flow was $202 MM before cash restructuring charges of $71 MM. 3) See slide 6 for detail. 4) Source: Rystad Energy research and an
Slide 5: Solid Execution Drives Strong Third Quarter Results
Solid Execution Drives Strong Third Quarter Results 1) Q3 2020 free cash flow was $202 MM before cash restructuring charges of $71 MM. Free cash flow is a non-GAAP financial measure; see supplemental slides. 2) Net debt to trailing twelve months EBITDAX. EBITDAX is a non-GAAP financial measure; see
Slide 6: Low Controllable Cash Costs
Low Controllable Cash Costs 1) Represent Permian horizontal LOE; cash G&A and cash interest represents costs divided by total production volumes. 2) YTD 2020 reflects Q1 through Q3 actuals. Controllable Cash Costs1 per BOE $5.81 ~25% Reduction $4.44 2 $0.41 $0.66
Slide 7: Best-in-Class G&A
Best-in-Class G&A 1) Peers: APA, CLR, CXO, DVN, EOG, HES, MRO and PE. Excludes full-cost peers. Source: FactSet Q2 2020 actuals and 3 stream BOE production. Pioneer reflects Q3 2020 actuals. Pioneer
Slide 8: Improving 2020 Plan
Improving 2020 Plan Consistent with prior average activity guidance, currently operating: 8 drilling rigs (1 rig in the joint venture area and 1 DrillCo rig) 4 frac fleets Future activity levels will be determined by macro-economic and commodity price outlooks Production deferrals driven by well-lev
Slide 9: Preserving a Strong Balance Sheet
Preserving a Strong Balance Sheet 1) Source: FactSet Consensus 10/27/2020. Peers: APA, CLR, COP, CVX, CXO, DVN, EOG, FANG, HES, MRO, MUR, OVV, OXY, PE, WPX, XEC and XOM. EBITDAX is a non-GAAP financial measure; see supplemental slides. Pioneer’s top-tier balance sheet allows for accelerated return o
Slide 10: Operations Update
Operations Update Completed Feet/Day Drilled Feet/Day Reduced well costs by ~$2.0 MM year-to-date through increased efficiencies and service cost deflation Expect ~60% of well cost savings to be sustainable Optimized development strategy unchanged
Slide 11: Delivering Best-in-Class Oil Production
Delivering Best-in-Class Oil Production 1) Source: Enverus.com; average Permian Basin oil mix for gross production between January 2016 and January 2020. 2) Peers: APA, COP, CVX, CXO, DVN, EOG, FANG, MRO, MTDR, NBL, OXY, PE, WPX, XEC and XOM. 3) Source: Enverus.com; average Permian Basin gross produ
Slide 12: Unmatched Portfolio of Top-Tier Permian Acreage
Location Count Unmatched Portfolio of Top-Tier Permian Acreage A – Rated Inventory1 (Breakeven pricing <$30 WTI and <$2.00 HH) Unmatched inventory in all of U.S. shale Pioneer + Parsley 1) Source: Wells Fargo, June 2020. Inventory quality is based on breakeven pricing: A-Rated, <$30/bbl WTI, <$2/MCF
Slide 13: Transaction Enhances Investment Thesis
Transaction Enhances Investment Thesis 1) Strip pricing and stock price as of 10/15/2020. Dividends are authorized and determined by the Company’s board of directors in its sole discretion. 2) Future reinvestment rate subject to a number of factors, including commodity prices and economic outlook. C
Slide 14: Improving Free Cash Flow Profile
Improving Free Cash Flow Profile 1) Based on strip pricing as of 10/15/2020 and market capitalization as of 10/19/2020. Reflects pre-dividend free cash flow. Free cash flow is a non-GAAP financial measure; see supplemental slides. Free Cash Flow ($MM)1 Transaction is highly accretive to free cash fl
Slide 15: Providing Low-Emission Barrels
Providing Low-Emission Barrels 1) The foregoing information was obtained from The Edge, a product of Wood Mackenzie.
Slide 16: Strong Focus on ESG
Strong Focus on ESG 1) Source: Rystad Energy research and analysis, Rystad Energy ShaleWellCube October 2020. Peers: APA, BP, COP, CPE, CVX, CXO, DVN, EOG, FANG, MRO, OXY, OVV, PDCE, SM, WPX, XEC and XOM. Q2 2020 Flaring Intensity1 Pioneer + Parsley 0.6% Peer Average 1.7% Focus on maintaining very l
Slide 17: Enhancing Shareholder Value
Enhancing Shareholder Value Protecting the Dividend >10 BBOE Resource Potential 0.5x Net Debt to TTM EBITDA1 Low-cost, high-return Permian Basin wells drive strong corporate returns Disciplined reinvestment rate underpins compelling investment framework Free cash flow generation supports return of c
Slide 18: Supplemental Slides
PIONEER NATURAL RESOURCES SUPPLEMENTAL SLIDES
Slide 19: 0.35 0.07 (0.01) 0.17 1) Represents employee-related charges associated with the Company's 2020 corporate
0.35 0.07 (0.01) 0.17 1) Represents employee-related charges associated with the Company's 2020 corporate restructuring, including $3 million of noncash stock based compensation expense related to accelerated vesting of certain equity awards. 2) As a result of changes to the Company's drilling plans
Slide 20: Q4 2020 Guidance
Q4 2020 Guidance Production (MBOEPD) Oil Production (MBOPD) Production Costs ($/BOE) DD&A ($/BOE) Exploration & Abandonment ($ MM) G&A ($ MM) Interest Expense ($ MM) Other Expense ($ MM) Accretion of Discount on ARO ($ MM) Cash Flow Impact from FT ($ MM) Current Income Taxes ($ MM) Effective Tax Rat
Slide 21: Price Realizations
Price Realizations 1) NGL NYMEX calendar month average reflects oil NYMEX calendar month average. Oil ($/BBL) NGL ($/BBL)1 Gas ($/MCF) NYMEX calendar month average NYMEX differential Realized prices 56.45 (39.64) 16.81 56.96 (38.36) 18.60 40.93 (24.00) 16.93 56.45 (2.52) 53.93 56.96 (0.95) 56.01 46.
Slide 22: Production Costs (Per BOE)
$6.89 $9.70 $8.48 $7.31 Production Costs (Per BOE) Q3 2020 compared to Q2 2020: Increase in production costs primarily attributable to: Increases in production taxes resulting from higher oil, NGL and gas price realizations Workovers Production and Ad Valorem Taxes Gathering, Processing and Transpor
Slide 23: Production by Commodity and Cash Margin
Q3 ‘19 Production By Commodity Q3 2020 Cash Margin ($/BOE) Realized Price (ex-derivatives) Cash Margins $28.22 $21.33 Total Permian Basin Other Assets Total Operations Oil (BOPD) NGL (BOEPD) Gas (MCFPD) Total (BOEPD) Oil (BOPD) NGL (BOEPD) Gas (MCFPD) Total (BOEPD) Oil (BOPD) NGL (BOEPD) Gas (MCFPD)
Slide 24: Liquidity Position
Liquidity Position 1) Maturities as of 9/30/2020; excludes issuance costs and issuance discounts of $260 MM. 2) Trailing twelve months EBITDAX. EBITDAX is a non-GAAP financial measure; see supplemental slides. Net debt at the end of Q3 2020 (reflects unrestricted cash on hand of $1.3 B) Unsecured cr
Slide 25: Supplemental Earnings Per Share Information
Supplemental Earnings Per Share Information The Company uses the two-class method of calculating basic and diluted earnings per share. Under the two-class method of calculating earnings per share, generally acceptable accounting principles ("GAAP") provide that share-based awards with guaranteed div
Slide 26: Supplemental Non-GAAP Financial Measures
Supplemental Non-GAAP Financial Measures 1) "EBITDAX" represents earnings before depletion, depreciation and amortization expense; exploration and abandonments; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; income t
Slide 27: Supplemental Non-GAAP Financial Measures
Supplemental Non-GAAP Financial Measures Adjusted loss attributable to common stockholders excluding noncash mark-to-market ("MTM") adjustments and adjusted income attributable to common stockholders excluding noncash MTM adjustment and unusual items are presented in this earnings release and reconc
Slide 28: Supplemental Non-GAAP Financial Measures
Supplemental Non-GAAP Financial Measures Free cash flow ("FCF") is a non-GAAP financial measure. As used by the Company, FCF is defined as net cash provided by operating activities, adjusted for changes in operating assets and liabilities, less capital expenditures. The Company believes this non-GAA
Slide 29: Certain Reserve Information
Certain Reserve Information Cautionary Note to U.S. Investors – The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than "reserves," as that term is defined by the SEC. In this presentation, Pioneer includes estimates of qua
Slide 30: Additional Information
Additional Information EBITDAX represents earnings before depletion, depreciation and amortization expense; exploration and abandonments; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; income taxes; net gain on the d