Pioneer Natural Resources Company

Welcome to Pioneer Natural Resources third quarter conference call. Joining us today will be Scott Sheffield, Chief Executive Officer, Rich Daley, President and Chief Operating Officer, and Neil Shaw, Senior Vice President and Chief Financial Officer. Pioneer has prepared presentation slides to supplement comments made today. These slides are available on the internet at www.pxd.com. Again, the Internet website to access slides presented in today's call is www.pxd.com. Navigate to the Investors tab found at the top of the webpage and then select Investor Presentations. Today's call is being recorded. A replay of the call will be archived on www.pxd.com through November 22, 2022. The company's comments today will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause actual results in future periods to differ materially from forward-looking statements. These risks and uncertainties are described in Pioneer's news release, on page two of the slide presentation, and in Pioneer's public filings made with the Securities and Exchange Commission. At this time, for opening remarks, I would like to turn the call over to Pioneer's Senior Vice President and Chief Financial Officer, Neil Shaw. Please go ahead, sir.

Thank you, Melinda. Good morning, everyone, and thank you for joining us for Pioneer's third quarter earnings call. Today, we will highlight Pioneer's excellent third quarter financial and operating results and peer-leading return of capital strategy. Importantly, we will discuss the increased return thresholds we are instituting beginning with our 2023 program, as well as the strong benefit we are seeing through our long lateral development. We're also excited to highlight our participation in two renewable energy projects that will help reduce our emissions profile and further strengthen our leading ESG strategy. We will then open up the call for questions. With that, I will turn it over to Scott.

Thank you, Neil. Good morning. Starting on slide three, Pioneer delivered strong results, generating over $1.7 billion in free cash flow during the third quarter, contributing to the return of $1.9 billion back to the shareholders. The majority of this capital is being returned through our base plus variable dividend of $5.71 per share, which will be paid in mid-December. Additionally, we continue to execute on opportunistic share repurchases. With 500 million of shares retired in the third quarter, an average price of $218, representing approximately 2.3 million shares. This strong return of capital through both dividends and share repurchases represents approximately 108% of our third quarter free cash flow. When including all repurchase to date and dividends to be paid in 2022, we will return approximately $7.5 billion to shareholders this year. This robust return clearly demonstrates our commitment to our investment framework that is supported by our significant free cash flow generation. We are also pleased to announce that we're participating in a 140 megawatt wind generation project with Nextera. This project utilizes Pioneer's own service acreage to generate renewable energy that we will utilize in our operation. On this slide four, On our third quarter results, Pioneer's strong execution continued during the third quarter with both oil and total production in the upper half of our guidance range, driving substantial free cash flow generation of greater than $1.7 billion. Our leverage profile remains top tier, which we forecast to be less than 0.3 net debt, EBITDA, at year end. Going to slide five. Supplementing our best-in-class dividend payout, we continue to repurchase our shares opportunistically. Now, I've executed $1.5 billion since the fourth quarter of 2021, an average share price of $219. This represents a reduction of total shares outstanding by approximately 3% at a strong discount to our current share price. Of the $500 million repurchased during the third quarter, an average price of $218. Per share, $250 million of stock was repurchased in the month of July at an average share price of $213 through our 10B5 program. To date, we've utilized $1.25 billion of our current $4 billion authorization, leaving nearly $3 billion remaining under the program. Going to slide number six, our core investment thesis remains unchanged, underpinned by low leverage, strong corporate returns, and a low reinvestment rate. This delivers moderate oil production growth, which generates significant free cash flow. Majority of this free cash flow was returned to shareholders through our strong and growing base dividend and our peer-leading variable dividend, which represents up to 75% of post-base dividend free cash flow. We strengthened this quarter's total return by leveraging our strong balance sheet to aggressively repurchase shares. In total, this resulted in returning $1.9 billion to shareholders, which equates to an annualized yield of greater than 12%. Going to slide number seven, Pioneer's high-quality assets, low break-even, and moderate R growth provides the ability to pay significant dividends from our peer-leading free cash flow through cycle. As seen on the graph, we're able to deliver a compelling base plus variable dividend with a yield far exceeding the S&P average at all prices of $60. Conversely, shareholders have significant upside to sustained higher oil prices as well, with a greater than a 10% dividend yield at all prices higher than $100 WTI. Going to slide number eight, total dividends to be paid in 2022 result in a yield in excess of 10% at today's share price. This yield exceeds all peers, majors, and the average yield of the S&P 500. Going to slide number nine, when looking beyond our peer group to the broader market, Pioneer's dividend yield exceeds every S&P 500 sector. Our double-digit dividend yield demonstrates the cash flow generative power and underlying quality of Pioneer's assets and the strength of our peer-leading return of capital strategy. I'll now turn it over to Rich.