Dallas-based independent Pioneer Natural Resources Co.’s first quarter oil and natural gas sales hit a new record, with both oil and gas sales up 54% from the same period a year ago. However, net income plummeted, partly on an accounting change that benefited 1Q2002’s income.

First quarter oil and gas sales averaged 185,858 boe/d, with oil sales averaging 47,733 bbl/d, a 54% increase over a year ago, and natural gas liquids sales averaging 23,406 bbl/d. Gas sales averaged 688 MMcf/d, a 54% increase over 1Q2003. Realized prices for oil were $28.31/bbl, while gas liquids for the quarter were $22.21/bbl. The realized price for gas was $4.41/Mcf, and North American gas prices averaged $5.04/Mcf.

Quarterly production costs averaged $5.27/boe, and exploration and abandonment costs of $80.5 million included $21.8 million of geologic and geophysical expenses, including seismic costs and $4.2 million of noncash leasehold abandonments.

For the same quarter last year, Pioneer reported oil sales of 31,894 bbl/d, gas liquids sales of 22,033 bbl/d and gas sales of 447 MMcf/d. Realized prices for the 2003 first quarter were $25.82/bbl for oil, $22.00/bbl for gas liquids and $4.16/Mcf for gas.

Pioneer reported net income of $60.2 million (50 cents/diluted share), compared with $84.2 million (71 cents) in 1Q2003. Last year’s net income included a $15.4 million (13 cent/share) benefit from the cumulative effect of change in accounting principles. Cash flow from operations was $253.6 million, compared with $136.8 million a year earlier. Pioneer also reduced its long-term debt by $98.8 million in the quarter to $1.46 billion.

In its guidance, Pioneer estimates second quarter production to average 180,000 to-195,000 boe/d, reflecting the incremental production expected from its Gulf of Mexico Devils Tower, Tomahawk and Raptor, the variability of oil cargo shipments in Tunisia and South Africa, and the seasonal increase in gas demand during Argentina’s winter season. Second quarter lease operating expenses (including production and ad valorem taxes) are expected to average $5.20-5.70/boe based on current New York Mercantile Exchange strip prices for oil and gas.

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