Pioneer Natural Resources Company
04/24/2024 | Press release | Distributed by Public on 04/24/2024 14:44
Results of Operations and Financial Condition - Form 8-K
Item 2.02 Results of Operations and Financial Condition
Explanatory note: Pioneer Natural Resources Company and its subsidiaries ("Pioneer" or the "Company") presents in this Item 2.02 certain information for the three months ended March 31, 2024 regarding (i) the impact to results of operations related to changes in the fair value of derivative instruments and certain other information regarding its derivative instruments, (ii) the impact to results of operations from the change in fair value of the Company's investment in affiliate, (iii) the net effect of third party purchases and sales of commodities on its results of operations and (iv) the weighted average basic and diluted shares outstanding.
Derivative Activity
The following table summarizes the net derivative results that the Company expects to report in its earnings for the three months ended March 31, 2024:
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Three Months Ended March 31, 2024
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| (in millions) | ||
| Noncash changes in fair value: | ||
| Convertible debt conversion option derivative loss, net | $ | (3) |
| Marketing derivative loss | (95) | |
| Total noncash derivative loss, net | (98) | |
| Cash payments on settled derivative instruments: | ||
| Convertible debt conversion option derivative payments, net | (4) | |
| Marketing derivative payments | (20) | |
| Total cash payments on settled derivative instruments, net | (24) | |
| Total derivative loss, net | $ | (122) |
Investment in Affiliate
The Company owns 16.6 million shares of ProPetro Holding Corp. ("ProPetro"), which is measured on a recurring basis at fair value. The Company expects to report a noncash loss of $5 million on its investment in ProPetro for the three months ended March 31, 2024.
Sales of Purchased Commodities
The Company enters into pipeline capacity commitments in order to secure available oil, NGL and gas transportation capacity from the Company's areas of production. The Company also enters into purchase transactions with third parties and separate sale transactions with third parties to diversify a portion of the Company's oil and gas sales to (i) Gulf Coast refineries, (ii) Gulf Coast and West Coast gas markets and (iii) international oil markets, and to satisfy unused gas pipeline capacity commitments. The Company expects the net earnings effect of third party purchases and sales of commodities for the three months ended March 31, 2024 to result in a loss of $32 million.
Weighted Average Basic and Diluted Shares Outstanding
The components of basic and diluted weighted average shares outstanding for the three months ended March 31, 2024 are as follows:
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Three Months Ended March 31, 2024
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|
| (in millions) | |
| Basic weighted average shares outstanding | 234 |
| Convertible notes dilution (a) | 5 |
| Diluted weighted average shares outstanding | 239 |
(a)Represents the dilutive effect had the Company's convertible notes been converted as of the beginning of the three months ended March 31, 2024. If converted by the holder, the Company may settle in cash, shares of the Company's common stock or a combination thereof, at the Company's election.