Advertisement
Pioneer Southwest Energy Partners L.P. Reports Third Quarter 2009 Results
03 Nov, 2009 @ 05:21 pm EDT
TEXAS--(BUSINESS WIRE)--Pioneer Southwest Energy Partners L.P. (“Pioneer Southwest” or “the Partnership”) (NYSE:PSE) today announced financial and operating results for the quarter ended September 30, 2009. The Partnership acquired assets and liabilities from a subsidiary of Pioneer Natural Resources Company in August 2009, which represents a transaction between entities under common control under generally accepted accounting standards. As a result, the following financial and operating results of the Partnership for the third quarter and nine-month periods include the results of the acquired assets as if the Partnership had acquired the assets at the beginning of the periods presented.
Net income for the third quarter was $25 million, of which $29 million, or $.96 per common unit, was attributable to the Partnership, offset by a loss of $4 million attributable to the acquired assets prior to the acquisition date of August 31, 2009. Net income attributable to the Partnership included noncash mark-to-market derivative gains of $7 million. Without the effect of this item, adjusted income applicable to the Partnership for the third quarter would have been $22 million, or $.74 per common unit. Cash flow from operating activities for the period was $25 million.
Oil and gas sales for the third quarter averaged 5,853 barrels oil equivalent per day (BOEPD). Third quarter oil sales averaged 3,482 barrels per day (BPD), natural gas liquid (NGL) sales averaged 1,333 BPD, and gas sales averaged 6 million cubic feet per day (MMCFPD).
The third quarter average price for oil was $109.61 per barrel. The price for NGLs was $45.42 per barrel, and the price for gas was $5.05 per thousand cubic feet. The average prices reported for the third quarter benefitted from the Partnership’s attractive commodity derivative position.
The Partnership acquired Spraberry properties from a subsidiary of Pioneer Natural Resources Company on August 31, 2009 at a price of $171.2 million, before customary purchase price adjustments. The properties included proved reserves of 18.9 million barrels of oil equivalent (BOE), production of approximately 1,300 BOEPD, 170 forty-acre drilling locations and 250 twenty-acre locations. Also included in the acquisition were certain derivative positions.
The Partnership commenced a two-rig drilling program in early November and expects to drill 50 to 60 wells through 2010. As a result, 2010 production is forecasted to grow by more than 15% compared to 2009, with operating cash flow increasing by approximately 35% in 2010, resulting in an improved distribution coverage ratio. The drilling program is expected to generate internal rates of return of approximately 50%.
Current liquidity of $140 million under the Partnership’s credit facility is expected to be adequate to fund future growth through drilling and acquisitions.
Pioneer Southwest previously announced a cash distribution of $15 million, or $.50 per outstanding common unit, for the quarter ended September 30, 2009. The distribution is payable November 12, 2009 to holders of record at the close of business on November 5, 2009. Distribution sustainability and growth potential are supported by significant derivative positions through 2013 (derivative contracts cover approximately 85% through 2010, 75% in 2011 and 2012, and 60% in 2013 of the Partnership’s forecasted production for those periods).
Financial Outlook
Fourth quarter 2009 production is forecasted to average 5,600 BOEPD to 5,900 BOEPD. Fourth quarter production costs (including production and ad valorem taxes) are expected to average $20.00 to $23.00 per BOE based on current NYMEX strip prices for oil, NGLs and gas. Depreciation, depletion and amortization expense is expected to average $5.00 to $6.00 per BOE based on the new SEC reserve pricing methodology that is expected to be implemented during the fourth quarter of 2009.
General and administrative expense is expected to be $1 million to $2 million. Interest expense is expected to be $500,000 to $700,000. Accretion of discount on asset retirement obligations is forecasted to be nominal.
Pioneer Southwest’s fourth quarter cash taxes and effective income tax rate are expected to be approximately 1% as a result of Pioneer Southwest being subject to the Texas margin tax.
Earnings Conference Call
On Wednesday, November 4 at 11:00 a.m. Central Time, Pioneer Southwest will discuss its financial and operating results with an accompanying presentation. The call will be webcast on Pioneer Southwest’s website, www.pioneersouthwest.com. The presentation will be available on the website for preview in advance of the call. At the website, select ‘INVESTORS’ at the top of the page. For those who cannot listen to the live webcast, a replay will be available shortly thereafter. Or you may choose to dial (888) 378-4350 (confirmation code: 1552499) to listen by telephone and view the accompanying presentation at the website above. A telephone replay will be available by dialing (888) 203-1112 (confirmation code: 1552499).
Pioneer Southwest is a Delaware limited partnership headquartered in Dallas. Pioneer Natural Resources formed Pioneer Southwest to own and acquire oil and gas assets in its area of operations. This area includes onshore Texas and eight counties in the southeast region of New Mexico. For more information, visit Pioneer Southwest’s website at www.pioneersouthwest.com.
Except for historical information contained herein, the statements in this News Release 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 Pioneer Southwest are subject to a number of risks and uncertainties that may cause Pioneer Southwest’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, the effectiveness of Pioneer Southwest's commodity price derivative strategy, reliance on Pioneer Natural Resources Company and its subsidiaries to manage Pioneer Southwest's business and identify and evaluate acquisitions, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, access to and availability of drilling equipment and transportation, processing and refining facilities, Pioneer Southwest's ability to replace reserves, including through acquisitions, and implement its business plans or complete its development activities as scheduled, uncertainties associated with acquisitions, access to and cost of capital, the financial strength of counterparties to Pioneer Southwest’s credit facility and derivative contracts and the purchasers of Pioneer Southwest’s oil, NGL and gas production, uncertainties about estimates of reserves, the assumptions underlying production forecasts, quality of technical data and environmental and weather risks. These and other risks are described in Pioneer Southwest's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission. In addition, Pioneer Southwest may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer Southwest undertakes no duty to publicly update these statements except as required by law.
| PIONEER SOUTHWEST ENERGY PARTNERS L.P. | ||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||
| (in thousands) | ||||||||||
| September 30, | December 31, | |||||||||
| 2009 | 2008 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 6,032 | $ | 29,936 | ||||||
| Accounts receivable | 12,342 | 12,606 | ||||||||
| Inventories | 1,018 | 1,941 | ||||||||
| Prepaid expenses | 381 | 105 | ||||||||
| Derivatives | 27,167 | 51,261 | ||||||||
| Total current assets | 46,940 | 95,849 | ||||||||
| Property, plant and equipment, at cost: | ||||||||||
|
Oil and gas properties, using the successful efforts method of accounting |
305,688 | 305,075 | ||||||||
|
Accumulated depletion, depreciation and amortization |
(110,436 | ) | (100,370 | ) | ||||||
| Total property, plant and equipment | 195,252 | 204,705 | ||||||||
| Deferred income taxes | 1,806 | - | ||||||||
| Other assets: | ||||||||||
| Derivatives | 34,603 | 65,804 | ||||||||
| Other, net | 652 | 806 | ||||||||
| $ | 279,253 | $ | 367,164 | |||||||
| LIABILITIES AND PARTNERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable: | ||||||||||
| Trade | $ | 6,995 | $ | 5,824 | ||||||
| Due to affiliates | 2,042 | 5,968 | ||||||||
| Interest payable | 110 | - | ||||||||
| Income taxes payable to affiliate | 371 | 492 | ||||||||
| Deferred income taxes | 307 | 521 | ||||||||
| Derivatives | 951 | - | ||||||||
| Asset retirement obligations | 715 | 99 | ||||||||
| Total current liabilities | 11,491 | 12,904 | ||||||||
| Long-term debt | 135,000 | - | ||||||||
| Derivatives | 4,828 | - | ||||||||
|
Deferred income taxes |
- | 101 | ||||||||
| Asset retirement obligations | 5,337 | 6,328 | ||||||||
| Partners' equity | 122,597 | 347,831 | ||||||||
| $ | 279,253 | $ | 367,164 | |||||||
| PIONEER SOUTHWEST ENERGY PARTNERS L.P. | ||||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (in thousands, except for per unit data) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Oil | $ | 35,107 | $ | 41,472 | $ | 95,887 | $ | 120,177 | ||||||||||||
| Natural gas liquids | 5,571 | 7,091 | 15,399 | 19,904 | ||||||||||||||||
| Gas | 2,896 | 4,188 | 8,891 | 12,145 | ||||||||||||||||
| Interest and other | 35 | 24 | 209 | 33 | ||||||||||||||||
| 43,609 | 52,775 | 120,386 | 152,259 | |||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Oil and gas production | 8,754 | 10,619 | 25,262 | 29,130 | ||||||||||||||||
| Production and ad valorem taxes | 2,596 | 3,881 | 7,327 | 11,330 | ||||||||||||||||
| Depletion, depreciation and amortization | 2,885 | 2,882 | 10,066 | 8,108 | ||||||||||||||||
| General and administrative | 1,145 | 1,431 | 3,786 | 4,822 | ||||||||||||||||
| Accretion of discount on asset retirement obligations | 121 | 36 | 363 | 108 | ||||||||||||||||
| Interest | 348 | 193 | 728 | 429 | ||||||||||||||||
| Derivative loss, net | 2,461 | - | 34,921 | - | ||||||||||||||||
| Other, net | 252 | 291 | 252 | 291 | ||||||||||||||||
| 18,562 | 19,333 | 82,705 | 54,218 | |||||||||||||||||
| Income before taxes | 25,047 |
33,4
Next Article: Aspiranet Celebrates National Adoption Awareness Month, Adoption Day on Nov. 21 with Children and Families
For more information, go to www.businesswire.com
Post Your Comment  About IBT PR Center
 IBT PR Center is the leading provider of economically useful electronic real-time content and press releases. IBT PR Center gathers nearly 5,000 stories a day from more than 20 publisher partners to create a variety of news products, delivered to top portal sites. IBT PR Center receive select content from key sources which is further enhanced with stock tickers and an extended lexicon of relevant terms and tags. With a specialization in the financial news and content marketplace, IBT PR Center receives, enhances, combines and filters news and content received from national and international news agencies and publications.  Popular Tags
 © 2009 The Ibtimes Company. All Rights Reserved. Terms of service | Privacy Policy | Advertising | About Us | Contact Us | Archives | ||||||||||||||||||
