Forward-Looking Statements

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Transcription:

Forward-Looking Statements Except for historical information contained herein, the statements in this presentation 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 are subject to a number of risks and uncertainties that may cause Pioneer 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, 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, completion of planned divestitures, 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 and export facilities, Pioneer s ability to replace reserves, implement its business plans or complete its development activities as scheduled, 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, natural gas liquid and gas production, uncertainties about estimates of reserves and resource potential, identification of drilling locations and the ability to add proved reserves in the future, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, including the possible impacts of climate change, cybersecurity risks, ability to implement planned stock repurchases, the risks associated with the ownership and operation of the Company s industrial sand mining and oilfield services businesses and acts of war or terrorism. These and other risks are described in Pioneer s Annual Report on Form 10-K for the year ended December 31, 2017, and other filings with the Securities and Exchange Commission. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact 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. Pioneer undertakes no duty to publicly update these statements except as required by law. Please see the Supplemental Slides included in this presentation for other important information. 1

Creating Differentiated Value 9% ROCE 1 in 2018 increase from 4% in 2017 +$458 MM Cash Flow Uplift from firm transportation (FT) agreements in 2018 Cash Flow Increase 88%over 2017 2 Focus on Permian Streamlining Portfolio ~$865 MM in divestiture proceeds 3 Improving +700% Capital Efficiency 11% decrease in capital delivering ~15% production growth 4 in 2019 Increase in Dividend over the last 2 years Repurchased $328 MM of $2B share repurchase authorization at large discount to NAV 1) Return on Capital Employed is a non-gaap financial measure; see supplemental slides. 2) Excludes the effects of derivatives. 3) Cash from 2018 divestitures plus 16.6 million shares of ProPetro (closing price as of 2/5/2019) and $110 MM in cash payments to be received in Q1 2019. 4) Represents the midpoint of both 2019 drilling, completions and facilities (D,C & F) capital and production guidance compared to actual results for 2018. Excludes acquisitions, asset retirement obligations, captilized interest, G&G G&A and facilities. 2

Successful 2018 Lays Foundation for Strong 2019 Permian Oil Production Permian BOE Production 1 Firm Transportation Uplift Permian Lease Operating Expense Cash Flow Growth 2 Net Debt to EBITDAX 3 194 MBOPD 302 MBOEPD $173 MM $4.11/BOE 38% versus Q4 2017 0.3x 181 MBOPD (23% YoY growth) 283 MBOEPD (26% YoY growth) $458 MM $4.27/BOE 88% versus 2017 0.3x 1) BOEPD incorporates ~6 MBOEPD increase for the year related to ASC 606. 2) Excludes the effects of derivatives. 3) Net debt as of year end 2018. EBITDAX is a non-gaap financial measure; see supplemental slides 3

Low Cost of Supply Underpins Strong Returns Through Cycles Pioneer s 2018 Midland Basin Horizontal Cost Structure ($/BOE) Low fully-burdened cost structure generates strong margins ~$23 Advantaged cost structure coupled with Brentrelated pricing driving strong corporate returns Large resource base in lowest-breakeven basin 1 Proved Developed F&D Production Costs & Taxes G&A 2 Interest Expense 2 Total Cost 1) Source: JP Morgan 2019 E&P Preview. 2) Reflects Pioneer s G&A and interest expense on a total Company BOE basis for 2018. 4

Improving Capital Efficiency 11% Decrease in D,C & F Capital Delivers 12%-17% Growth in Production ~$3.3 B ~$2.95 B 2018 D,C & F Capital Pressure Pumping Sand 1 Water & Efficiency Offsetting Inflation Activity 2019 D,C & F Capital 2 1) Sand savings include moving to smaller mesh West Texas sand supply and lower gel and surfactant usage. 2) Represents midpoint of D,C & F capital guidance. 6

Enhancing Shareholder Value Focus on Returns - Low-cost, high-return Permian Basin wells underpin increasing corporate returns Capital Discipline - Capital spending within cash flow while maintaining strong production growth Return of Capital - Free cash flow generation leads to return of capital to shareholders Preserve Strong Balance Sheet - Low leverage ratios provide financial flexibility Highly Repeatable Program - Significant inventory of low-risk, high return wells supports organic growth 7

Industry-Leading Acreage Cost Basis FOCUS ON RETURNS $100,0000 Permian Basin Acquisitions (Late 2016 - Present) 3 2018 ROCE $90,000 $80,000 6% 9% $70,000 $60,000 $50,000 PIONEER S AVERAGE COST BASIS OF ~$500/ACRE Peer Average 1 2 $40,000 $30,000 $20,000 Pioneer generates higher corporate returns due to low acreage cost basis $10,000 $0 Pioneer Acquisition 1 Acquisition 2 Acquisition 3 Acquisition 4 Acquisition 5 Acquisition 6 Acquisition 7 Acquisition 8 Acquisition 9 Acquisition 10 Acquisition 11 Acquisition 12 Acquisition 13 Acquisition 14 Acquisition 15 PXD ~$21,000 Acquisition Cost Per Well Location 4 Acquisition 15 ~$3.7 Million 1) Credit Suisse 2018 ROCE Estimates as of 1/22/2019. Peers include APA, APC, CLR, CXO, DVN, EOG, FANG, HES, MRO, MUR, NBL and PE. 2) Reflects 2018 ROCE, adjusted for noncash mark-to-market derivative gains and unusual items; see supplemental slides. 3) Source: PLS, RSEG and company disclosure; does not include value of acquired production. 4) Cost per well location assumes ~10,000 laterals and 30 wells developed on 1,280 acres. 8

Capital Discipline: Growth within Cash Flow CAPITAL DISCIPLINE 2019 Sources and Uses of Cash Cash on Hand & Free Cash Flow Return of Capital to Shareholders Share Repurchases, Cash on Hand & Investments Cash Flow @ $53/BBL 1 D,C & F Growth Capital 5 Cash Flow @ ~$40/BBL ~$2.2 B Sources of Cash 2 D,C & F Maintenance Capital 3 Base Dividend 4 2019 Dividend 2019 Plan Financial Flexibility Increase 4 1) Represents midpoint of production guidance. 2) WTI oil price ($7 differential to Brent) and $3 per MCF gas price. 3) D,C & F maintenance capital is the capital required to keep production flat at the exit rate of 2018 for one year. 4) Represents 2019 annualized dividend. 5) Represents midpoint of D,C&F capital guidance. 9

Priorities Aligned with Shareholders RETURN OF CAPITAL 1.9% Total Shareholder Yield 1 $0.35 Increasing Dividend $328 Million Executed 2 $0.30 $0.25 $0.20 700% Increase in Dividend $0.15 $0.10 $2 Billion Authorized $0.05 $0.00 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 Repurchased 2.4 MM shares at a large discount to NAV 1) Total Shareholder Yield defined as share repurchases of $328 MM plus estimated 2019 annualized dividend divided by market capitalization based on the closing share price on 2/8/2019. 2) Includes share repurchases from 12/13/2018 through 2/8/2019. 10

Maintaining Low Leverage PRESERVE STRONG BALANCE SHEET 3 Balance Sheet Strength 1,2 (bubble size represents market cap) Net debt at YE 2018 of $0.9 B (reflects cash on hand, including liquid investments, of $1.4 B) 2.5 2 Low leverage provides financial flexibility 1 Mid-investment grade rated by Moody s, S&P and Fitch 0.5 1.5 Pioneer 0% 10% 20% 30% 40% 50% 60% 70% Net Debt/Market Cap Pioneer Peers 1) Peers include APC, APA, COP, HES, MRO, MUR, NBL, OXY, CXO, CLR, FANG, PE, DVN, ECA, EOG and WPX. 2) Based on 2018 actuals for Pioneer and 1/25/2019 market capitalization. Peers represent Goldman Sachs 2018E Net Debt/EBITDA dated 1/28/2019 and 1/25/2019 market capitalization. 11

Unmatched Footprint in World Class Asset HIGHLY REPEATABLE PROGRAM 200 Well Productivity by Year Updated late January 150 PERMIAN 100 50 2018 2017 2016 2015 0 0 30 60 90 120 150 180 Days on Production Sources: Esri, USGS, NOAA >10 BBOE Resource Base ~680,000 Net Acres 1) Production normalized for shut-ins. Wells grouped by POP year. 2) Production normalized to a lateral length of 10,000. Annual well productivity gains achieved through extensive technical analysis of large proprietary data set Large contiguous acreage position consisting of high rate of return horizontal inventory Methodical approach to appraisals drives economic resource upside 12

Delivering Best-in-Class Oil Production 75% Total Permian Oil Mix (2 Stream) 1,2 200 Cumulative Oil Production 2,3 PXD 160 65% 120 Peers 55% 80 40 45% PXD Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 1 2 3 4 5 6 7 8 9 10 11 12 Month Peer-leading oil mix drives strong margins Highest cumulative oil production in the Permian Basin 1) Source: DrillingInfo.com, average Permian Basin oil mix for gross production between January 2016 and September 2018. 2) Peers: APA, APC, COP, CVX, CXO, DVN, EOG, FANG (pro forma with EGN), MRO, MTDR, BNL, PE, WPX, XEC and XOM. 3) Source: DrillingInfo.com, average Permian Basin gross production from wells POP d between January 2016 and September 2018. 13

Operations Update Second Stackberry pad successful; de-risking a further ~40,000 acres Two Stackberry projects to spud late in 2019 140 Midland County Stackberry 8 wells (2 Middle Spraberry, 2 Jo Mill, 120 100 80 4 Lower Spraberry) Outperforming by 34% Updated late January 2-Well Wolfcamp D pad POP d early Q1 2019: Average IP24: ~4,100 BOEPD (72% Oil) 20-day cumulative production: ~120 MBOE (~70% Oil) 60 40 20 0 Spraberry Wells in Area: 10 wells since 2013 0 30 60 90 120 150 180 Days on Production Leveraging machine learning in completion design to optimize returns 270 wells POP d in 2018 1) Production normalized for shut-ins. 2) Production normalized to a lateral length of 10,000. 14

Environmental, Social & Governance Environmental: Reducing emissions through extensive Leak Detection and Repair (LDAR) program Greater mix of effluent, reuse and brackish water decreases dependence on fresh water Social: Proactive safety culture Diverse perspectives and teamwork drive innovation Governance: Board of Directors Governance Health, Safety and Environment Committee Creates a culture of continuous improvement in safety and environmental protection practices Nominating and Corporate Governance Committee Oversight of governance risks and Pioneer charitable contributions pxd.com/values/sustainability 16

Long-Term Planning Benefitting Bottom Line 2018 Oil Pricing Realizations Oil Exposed to Brent Pricing PXD Realized Price 1 ~$64 Permian Peers 2 Midland Pricing >90% Through 2021 MIDLAND Nederland Houston Corpus Christi ~$57 ~$58 Firm transportation (FT) provided ~$458 MM of incremental cash flow in 2018 Expecting uplift of $40 MM to $100 MM in Q1 2019 175 MBOPD of Permian Basin oil transported to Gulf Coast during Q4 2018 with ~80% exported 1) 2018 Actuals; Includes effects of firm transportation marketing arrangements. 2) Permian Peers: CXO, FANG, LPI and PE. Source: Bloomberg. 17

A Commitment to Driving Results Focus on Returns Low-cost, high-return Permian Basin wells underpin increasing corporate returns Capital Discipline Capital spending within cash flow while maintaining strong production growth Return of Capital Free cash flow generation leads to return of capital to shareholders Preserve Strong Balance Sheet Low leverage ratios provide financial flexibility Highly Repeatable Program Significant inventory of low-risk, high return wells supports organic growth 9% ROCE in 2018 1 11% D,C & F Capital decrease delivers 15% production growth Total Shareholder Yield 1.9% 0.3x Net Debt to 2018 EBITDAX 1 Organic Growth Without Large Acquisitions 1) ROCE and EBITDAX are non-gaap financial measures; see supplemental slides. 18

Q4 2018 Summary Q4 2018 Earnings Q4 2018 Guidance vs. Results Net income attributable to common stockholders Noncash mark-to-market (MTM) derivative gains, net ($576 MM pretax) $ Millions (After Tax) 324 (449) $ Per Diluted Share 1.89 (2.63) Permian Basin Specific Guidance Daily Production (MBOEPD) Production Costs Including Taxes ($/BOE) DD&A ($/BOE) Guidance 293-303 $9.00 - $11.00 $13.00 - $15.00 Results of Operations 302 $8.40 $13.75 Adjusted loss excluding noncash MTM derivative gains 1 (125) (0.74) Total Company Guidance Unusual items - asset divestiture related charges: Exploration & Abandonment ($ MM) $20 - $30 $32 Sand mine decommissioning related charges ($450 MM pretax) Net gain on asset divestitures ($64 MM pretax) Other asset divestiture related charges ($34 MM pretax) Adjusted income excluding noncash MTM derivative gains and unusual items 1 351 (50) 26 202 2.06 (0.29) 0.15 1.18 G&A ($ MM) Interest Expense ($ MM) Other Expense ($ MM) 1 Accretion of Discount on ARO ($ MM) Current Income Tax Provision (Benefit) ($ MM) Effective Tax Rate (%) $95 - $100 $30 - $35 $50 - $60 $3 - $6 <$5 21% - 25% $99 $29 $49 $3 $- 21% 1) Non-GAAP financial measure. See reconciliation in Supplemental Slides. Excludes sand mine decommissioning related costs and certain asset divestiture related charges that are reflected in unusual items. 20

Q1 2019 Guidance Permian Basin Guidance Total Company Guidance Production (MBOEPD) 302-317 Exploration & Abandonment ($ MM) $20 - $30 Oil Production (MBOPD) 194-204 G&A ($ MM) $95 - $100 Production Costs ($/BOE) $8.50 - $10.50 Interest Expense ($ MM) $28 - $33 DD&A ($/BOE) $13.00 $15.00 Other Expense ($ MM) 1 $45 - $55 Accretion of Discount on ARO ($ MM) $3 - $6 Eagle Ford/South Texas Current Income Taxes ($ MM) $0 - $5 Production (MBOEPD) 13.0-14.5 Effective Tax Rate (%) 21% - 25% Oil Production (MBOPD) 2.8-3.8 Cashflow Uplift from FT ($ MM) $40 - $100 1) Other expense includes $35 MM to $45 MM of expected charges associated with excess firm gathering and transportation commitments that are primarily related to the Eagle Ford assets. 21

Price Realizations Uplift due to FT 62.62 65.30 68.33 59.16 53.70 35.97 27.53 27.74 28.83 26.88 2.72 2.59 1.97 2.21 1.75 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Oil ($/BBL) NGL ($/BBL) 1 Gas ($/MCF) 1 NYMEX calendar month average 55.40 62.87 67.88 69.50 58.81 55.40 62.87 67.88 69.50 58.81 2.93 3.01 2.80 2.91 3.65 NYMEX differential (2.59) (1.23) (6.68) (11.96) (9.01) (27.87) (35.13) (39.05) (33.53) (31.93) (0.21) (0.42) (.083) (0.70) (1.90) Realized prices 52.81 61.64 61.20 57.54 49.80 27.53 27.74 28.83 35.97 26.88 2.72 2.59 1.97 2.21 1.75 Uplift due to Gulf Coast FT 0.89 0.98 4.10 10.79 9.36 Adjusted realized price 53.70 62.62 65.30 68.33 59.16 1) Realized gas and NGL prices in periods prior to 2018 have been adjusted pro forma for adoption of ASC 606 for comparative purposes. 22

Production Costs (Per BOE) Workovers Production and Ad Valorem Taxes Gathering, Processing and Transportation $9.18 $0.76 $2.20 $2.49 $10.30 $0.82 $2.70 $2.47 $10.50 $0.79 $2.35 $3.05 $9.51 $1.00 $2.80 $2.39 $8.70 $1.07 $1.87 $2.16 Q4 2018 compared to Q3 2018: Decrease in production costs primarily attributable to lower production and ad valorem taxes LOE $4.06 $4.41 $4.61 $3.85 $4.31 Natural Gas Processing $(0.33) $(0.10) ($.30) ($0.53) ($0.71) Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 23

Production By Commodity Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Oil (BOPD) 140,260 144,628 151,083 163,952 171,988 Permian Basin Horizontal NGL (BOEPD) 40,895 45,718 45,342 47,518 50,813 Gas (MCFPD) 174,613 179,987 266,923 254,242 271,147 Total (BOEPD) 210,257 220,343 240,912 253,844 267,991 Oil (BOPD) 25,816 25,192 23,986 22,541 21,916 Permian Basin Vertical NGL (BOEPD) 8,933 8,678 7,496 6,248 6,002 Gas (MCFPD) 39,034 35,999 46,661 34,981 37,016 Total (BOEPD) 41,255 39,871 39,259 34,619 34,087 Oil (BOPD) 166,076 169,820 175,069 186,493 193,904 Total Permian Basin NGL (BOEPD) 49,828 54,396 52,838 53,766 56,815 Gas (MCFPD) 213,647 215,986 313,584 289,223 308,163 Total (BOEPD) 251,512 260,214 280,171 288,463 302,078 Oil (BOPD) 13,661 12,699 10,426 8,623 5,289 Other Assets 1 NGL (BOEPD) 12,567 11,785 11,635 8,845 5,096 Gas (MCFPD) 163,494 162,883 152,830 88,364 43,013 Total (BOEPD) 53,477 51,631 47,533 32,196 17,555 Oil (BOPD) 179,737 182,519 185,495 195,116 199,193 Total Operations NGL (BOEPD) 62,396 66,181 64,473 62,611 61,911 Gas (MCFPD) 377,141 378,869 466,414 2 377,587 351,176 Total (BOEPD) 304,989 311,845 327,704 320,659 319,633 1) In process of being divested. 2) Q2 18 gas production includes 35 MMCFPD of production attributable to Q1. Increased gas production is attributable to the adoption of ASC 606, reflecting volumes that had been previously netted. In accordance with ASC 606, prior periods have not been adjusted. 24

Cash Margin By Asset Q4 2018 Cash Margin by Asset ($/BOE) Permian Horizontals Permian Verticals Eagle Ford Other Assets Total Company Realized price (ex-derivatives) $38.22 $39.45 $34.45 $35.11 $38.16 Production costs 1 (3.90) (26.92) (14.26) (8.60) (6.83) Production and ad valorem taxes (2.01) (1.04) (1.06) (2.85) (1.87) Cash margin $32.31 $11.49 $19.13 $23.66 $29.46 % Oil 64% 64% 30% 30% 63% Firm transportation cash flow uplift increased total Company cash margin by $5.88 per BOE to $35.34 1) Includes lease operating expense, gathering, processing and transportation, workover expense and net natural gas processing cost. 25

Liquidity Position Net debt at the end of Q4 2018 (reflects cash on hand, including liquid investments, of $1.4 B) Unsecured credit facility availability Net debt-to-book capitalization at the end of Q4 2018 $0.9 B $1.5 B 7% Maturities and Balances 1 2020 2021 2022 2023 2026 2028 $450 MM 7.500% $500 MM 3.450% $600 MM 3.950% $500 MM 4.450% $250 MM 7.200% $1.5 B unsecured credit facility (undrawn as of 12/31/18) Net debt to 2018 operating cash flow of 0.3x Mid-investment grade rated by Moody s, S&P and Fitch 1) Excludes issuance costs and issuance discounts of ~$16 MM. 26

Permian Basin Year End 2018 Proved Reserves1 Added 304 MMBOE in the Permian Basin, or 290% of full-year Permian production, at a drillbit finding and development cost of $11.77 per BOE 2 Added 298 MMBOE of proved developed reserves at a proved developed finding and development cost of $11.94 per BOE 2 Year-End 2018 Proved Reserves (MMBOE) Permian Basin 977 Permian Basin Reserve mix 56% oil / 23% NGLs / 21% gas 94% PD / 6% PUD 1) Reflects 2018 SEC pricing (12-month NYMEX average) of $65.57/BBL for oil and $3.10/MMBTU for gas as compared to 2017 SEC pricing of $51.34/BBL for oil and $2.98/MMBTU for gas. 2) Excludes positive price revisions (14 MMBOE). Added 266 MMBOE of proved developed reserves from (i) discoveries and extensions placed on production during 2017, (ii) transfers from proved undeveloped reserves at year-end 2016 and (iii) technical revisions of previous estimates for proved developed reserves during 2017. Revisions of previous estimates excludes price revisions. 27

Supplemental Earnings Per Share Information The Company uses the two-class method of calculating basic and diluted earnings per share. Under the two class method of calculating earnings per share, generally acceptable accounting principles ("GAAP") provide that share based awards with guaranteed dividend or distribution participation rights qualify as "participating securities" during their vesting periods. During periods in which the Company realizes net income attributable to common stockholders, the Company's basic net income per share attributable to common stockholders is computed as (i) net income attributable to common stockholders, (ii) less participating share-based basic earnings (iii) divided by weighted average basic shares outstanding and the Company's diluted net income per share attributable to common stockholders is computed as (i) basic net income attributable to common stockholders, (ii) plus the reallocation of participating earnings, if any, (iii) divided by weighted average diluted shares outstanding. During periods in which the Company realizes a loss attributable to common stockholders, securities or other contracts to issue common stock would be dilutive to loss per share; therefore, conversion into common stock is assumed not to occur. The following table is a reconciliation of the Company's net income attributable to common stockholders to basic and diluted net income attributable to common stockholders for the three months ended December 31, 2018: Net income attributable to common stockholders Participating share-based earnings Basic and diluted net income attributable to common stockholders Weighted average common shares outstanding: Basic Dilution attributable to stock based compensation Diluted Q4 18 ($ Millions) 324 (2) 322 Q4 18 (Shares in Millions) 171-171 28

Supplemental Non-GAAP Financial Measures EBITDAX and discretionary cash flow ( DCF ) are disclosed by Pioneer, and reconciled to the generally accepted accounting principle ( GAAP ) measures of net income and net cash provided by operating activities because of their wide acceptance by the investment community as financial indicators of a company s ability to internally fund exploration and development activities and to service or incur debt. The Company also views the non-gaap measures of EBITDAX and DCF as useful tools for comparisons of the Company s financial indicators with those of peer companies that follow the full cost method of accounting. EBITDAX and DCF should not be considered as alternatives to net income or net cash provided by operating activities, as defined by GAAP. Net income Depletion, depreciation and amortization Impairment of inventory and other property and equipment Exploration and abandonments Accretion of discount on asset retirement obligations Interest expense Income tax provision Gain on disposition of assets, net Derivative related activity Amortization of stock-based compensation Other EBITDAX 1 Current income tax provision Cash interest expense Discretionary cash flow 2 Q4 18 ($ Millions) $324 404 2 32 3 29 88 (64) (576) 22 482 746 - (28) 718 Cash exploration expense Changes in operating assets and liabilities Net cash provided by operating activities (17) 214 $915 1) EBITDAX represents earnings before depletion, depreciation and amortization expense; exploration and abandonments; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; income taxes; net gain on the disposition of assets; noncash derivative related activity; amortization of stock-based compensation and other items. 2) Discretionary cash flow equals cash flows from operating activities before changes in operating assets and liabilities and cash exploration expense. 29

Supplemental Non-GAAP Financial Measures Adjusted loss excluding noncash MTM derivative gains, and adjusted income excluding noncash MTM derivative gains and unusual items, as presented in the Q4 2018 Summary Net income attributable to common stockholders $ Millions (After Tax) 324 $ Per Diluted Share 1.89 slide, are presented and reconciled to Pioneer's net income attributable to common stockholders (determined in accordance with GAAP) because Pioneer believes that these non-gaap financial measures reflect an additional way of viewing aspects Noncash mark-to-market (MTM) derivative gains, net ($576 MM pretax) (449) (2.63) of Pioneer's business that, when viewed together with its financial results computed in accordance with GAAP, provide a more complete understanding of factors and trends Adjusted loss excluding noncash MTM derivative gains (125) (0.74) affecting its historical financial performance and future operating results, greater transparency of underlying trends and greater comparability of results across periods. Unusual items - asset divestiture related charges: In addition, management believes that these non-gaap financial measures may enhance investors' ability to assess Pioneer's historical and future financial performance. Sand mine decommissioning related charges ($450 MM pretax) Net gain on asset divestitures ($64 MM pretax) Other asset divestiture related charges ($34 MM pretax) 351 (50) 26 2.06 (0.29) 0.15 These non-gaap financial measures are not intended to be a substitute for the comparable GAAP measure and should be read only in conjunction with Pioneer's consolidated financial statements prepared in accordance with GAAP. Noncash MTM derivative gains and losses and unusual items will recur in future periods; however, the Adjusted income excluding noncash MTM derivative gains and unusual items 202 1.18 amount and frequency can vary significantly from period to period. The table to the left reconciles Pioneer's net income attributable to common stockholders for the three months ended December 31, 2018, as determined in accordance with GAAP, to adjusted loss excluding noncash MTM derivative gains and adjusted income excluding MTM derivative gains and unusual items for the quarter. 30

Return on Capital Employed (ROCE) is a non-gaap financial measure. As used by Pioneer, ROCE is net income adjusted for tax-effected interest expense, noncash MTM derivative gains and other unusual items divided by the summation of average equity adjusted for tax-effected interest expense, noncash MTM derivative gains and other unusual items and average net debt. Pioneer believes ROCE is a good indicator of long-term performance, both absolute and relative to Pioneer s peers. ROCE is a measure of the profitability of Pioneer s capital employed in its business compared with that of its peers. Net Income After-tax adjustments for MTM gains and unusual items: Excess tax benefits and reduction in deferred tax liability Other asset divestiture related charges After-tax adjustments to exclude MTM gains and unusual items After-tax interest expense ROCE Earnings Average total equity Average total debt Average capital employed ROCE% Noncash mark-to-market derivative gains Sand mine decommissioning related charges Impairment of oil and gas properties Net gain on asset divestitures 2018 ($ Millions) 975 (211) 351 60 (226) N/A 129 103 98 1,176 11,796 724 12,520 9% 2017 ($ Millions) 833 112 N/A 183 (124) (633) N/A (462) 98 469 10,663 395 11,058 4%

Reserves Audit, F&D Costs and Reserve Replacement An audit of proved reserves follows the general principles set forth in the standards pertaining to the estimating and auditing of oil and gas reserve information promulgated by the Society of Petroleum Engineers ("SPE"). A reserve audit as defined by the SPE is not the same as a financial audit. Please see the Company's Annual Report on Form 10-K for a general description of the concepts included in the SPE's definition of a reserve audit. Proved developed finding and development cost per BOE, or proved developed F&D cost per BOE, means the summation of exploration and development costs incurred (excluding asset retirement obligations) divided by the summation of annual proved reserves, on a BOE basis, attributable to proved developed reserve additions, including (i) discoveries and extensions placed on production during 2018, (ii) transfers from proved undeveloped reserves at year-end 2017 and (iii) technical revisions of previous estimates for proved developed reserves during 2018. Revisions of previous estimates exclude price revisions. 32

Certain Reserve Information Cautionary Note to U.S. Investors --The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than reserves, as that term is defined by the SEC. In this presentation, Pioneer includes estimates of quantities of oil and gas using certain terms, such as resource base, resource potential, net recoverable resource potential, estimated ultimate recovery, EUR, oil in place or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC s definitions of proved, probable and possible reserves, and which the SEC's guidelines strictly prohibit Pioneer from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Pioneer. U.S. investors are urged to consider closely the disclosures in the Company s periodic filings with the SEC. Such filings are available from the Company at 5205 N. O'Connor Blvd., Suite 200, Irving, Texas 75039, Attention: Investor Relations, and the Company s website at www.pxd.com. These filings also can be obtained from the SEC by calling 1-800-SEC-0330. 33

Common Share Repurchases Under the stock repurchase program, the Company may repurchase shares from time to time at management s discretion in accordance with applicable securities laws, including through open market transactions, privately negotiated transactions or any combination thereof. In addition, shares may also be purchased pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit shares to be repurchased when Pioneer might otherwise be precluded from doing so under insider trading laws. The amount and timing of repurchases are subject to several factors, including stock price, trading volume, general market conditions, legal requirements, general business conditions and corporate considerations determined by Pioneer s management, such as liquidity and capital needs. The stock repurchase program has no time limit and may be modified, suspended or terminated at any time by Pioneer s Board of Directors. The Company intends to fund repurchases under the program from existing cash and cash equivalents and future cash flow. 34