Pioneer Natural Resources To Cut Permian Basin Rig Count in Half

DALLAS, TX – As of March 15, 2020 Pioneer Natural Resources Company has announced that it is taking decisive action in response to lower oil prices and global macroeconomic uncertainty.

Pioneer is reducing its 2020 drilling, completion and facilities capital budget by approximately 45% and expects it to range between $1.6 billion to $1.8 billion. Additionally, Pioneer is reducing its budgeted water infrastructure spending to approximately $100 million, resulting in a total 2020 capital budget1 range of $1.7 billion to $1.9 billion. The Company expects its revised capital program to be fully funded from forecasted cash flow2 of approximately $2.3 billion and generate free cash flow3 of approximately $500 million (at the midpoint of capital guidance), assuming WTI oil prices average $35 per barrel for the remainder of 2020.

As a result, Pioneer plans to take immediate action in response to current commodity prices and will reduce its operated rig count from 22 currently to 11 operated rigs within the next two months. In addition, the Company plans to reduce its contracted completion crews from six currently to two or three completion crews during the same time period. 

In addition to the Company’s strong balance sheet, Pioneer recently enhanced its derivative position to provide additional downside protection. For the remainder of 2020, Pioneer has derivative coverage for approximately 90% of its revised 2020 oil production estimate. In addition, the Company has increased its derivative coverage for 2021 to include approximately 94 MBOPD.

President and CEO Scott D. Sheffield stated, “As they have in the past, global headwinds and macroeconomic factors are impacting commodity prices. After successfully managing through the previous five cycles, it is apparent to me companies that maintain strong balance sheets and low leverage during these difficult times will prosper when economies eventually rebound and commodity prices recover."

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States. For more information, visit www.pxd.com.