PIONEER NATURAL RESOURCES COMPANY 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 regarding shares repurchased under the Company's common stock repurchase program during the fourth quarter of 2021. Stock Repurchase Program InDecember 2018 , the Company's board of directors authorized a$2 billion common stock repurchase program. Under this stock repurchase program, the Company may repurchase shares at management's discretion in accordance with applicable securities laws. In addition, the Company may repurchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Act of 1934, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company's insider trading policy. The stock repurchase program has no time limit and may be modified, suspended or terminated at any time by the board of directors. All share repurchases for the year endedDecember 31, 2021 were completed during the fourth quarter. Expenditures to acquire shares under the stock repurchase program are as follows: Three Months Ended Year Ended December December 31, 2021 31, 2021 (in millions) Share repurchases (a) $ 250 $ 250 ______________________
(a)The Company repurchased 1,379,634 shares during the three and twelve months
ended
As of
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Item 7.01 Regulation FD Disclosure
During the fourth quarter of 2021, the Company either (i) terminated certain of
its 2022 derivative positions or (ii) entered into equal and offsetting
derivative trades, which had the net effect of eliminating certain of its 2022
derivative positions. The Company expects the cash settlement of its terminated
or offsetting derivative positions to result in the following quarterly cash
payments:
2021 2022
Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter
(in millions)Cash payments $ 180 $ 78 $ 83 $ 83 $ 84 The quarterly cash payments in 2022 related to the derivatives with offsetting positions will be reflected as a change in operating assets and liabilities. As a result, the Company's quarterly free cash flow will not be impacted by the payment of such quarterly obligations.
As of
2022
First Quarter Second Quarter Third Quarter Fourth Quarter
Average daily oil production associated with derivatives (Bbl):
Midland/WTI basis swap contracts:
Volume (a) 26,000 26,000 26,000 26,000
Price differential $ 0.50 $ 0.50 $ 0.50 $ 0.50
Average daily gas production associated with derivatives (MMBtu):
Dutch TTF swap contracts:
Volume 30,000 30,000 30,000 30,000
Price $ 12.14 $ 7.80 $ 7.80 $ 7.80
WAHA swap contracts:
Volume 20,000 - - -
Price $ 2.46 $ - $ - $ -
NYMEX collar contracts:
Volume 7,000 - - -
Price:
Ceiling $ 3.45 $ - $ - $ -
Floor $ 2.75 $ - $ - $ -
WAHA/NYMEX basis swap contracts:
Volume (b) 7,000 - - -
Price differential $ (0.39) $ - $ - $ -
____________________
(a)The referenced basis swap contracts fix the basis differentials between the
index price at which the Company sells a portion of its Permian Basin oil and
the WTI index price.
(b)The referenced basis swap contracts fix the basis differentials between the
index price at which the Company sells a portion of its Permian Basin gas and
the NYMEX index price used in collar contracts.
On January 5, 2021 , Pioneer Natural Resources Company (the "Company") will post
an Investor Presentation titled "January 2022 Investor Presentation" on the
Company's website, www.pxd.com. A copy of the presentation can be reviewed at
the website by first selecting "Investors," then "Investor Presentations."
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Cautionary Statement Concerning Forward-Looking Statements
Except for historical information contained herein, the statements in this
Current Report on Form 8-K 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 business prospects of the Company are
subject to a number of risks and uncertainties that may cause the Company's
actual results in future periods to differ materially from the forward-looking
statements. 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; the effect of future regulatory or
legislative actions on Pioneer or the industry in which it operates, including
the risk of new restrictions with respect to development activities; the ability
to obtain approvals from third parties and negotiate agreements with third
parties on mutually acceptable terms; potential liability resulting from pending
or future 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; the Company's ability to
achieve its emissions reduction, flaring and other ESG goals; the risk that the
Company will not be able to fully or timely realize the expected synergies and
accretion metrics from the Parsley Energy, Inc. and Double Eagle III Midco 1 LLC
acquisitions; the assumptions underlying forecasts, including forecasts of
production, cash flow, capital expenditures, expenses and cash flow from
purchases and sales of oil and gas, net of firm transportation commitments;
sources of funding; tax rates; 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; quality
of technical data; environmental and weather risks, including the possible
impacts of climate change; cybersecurity risks; the risks associated with the
ownership and operation of the Company's water services business and acts of war
or terrorism. These and other risks are described in the Company's Annual Report
on Form 10-K for the year ended December 31, 2020 , 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. 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. The Company undertakes no duty to publicly update
these statements except as required by law.
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