SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Pioneer Natural Resources Company
________________________________________________________
(Name of Issuer)
Common Stock
_______________________________________________________
(Title of Class and Securities)
723787107
_______________________________________________________
(CUSIP Number of Class of Securities)
O. Mason Hawkins
Chairman of the Board and C.E.O.
and
Andrew R. McCarroll
Vice President & General Counsel
Southeastern Asset Management, Inc.
6410 Poplar Avenue, Suite 900
Memphis, TN 38119
(901) 761-2474
___________________________________________________________
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 7, 2009
___________________________________________
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Sections 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check
the following box: [X]
CUSIP No. 723787107 13D
_____________________________________________________________________________
(1) NAMES OF REPORTING PERSONS
Southeastern Asset Management, Inc. I.D. No. 62-0951781
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: Funds of investment advisory clients
_____________________________________________________________________________
(5) CHECK BOX IF DISCOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
_____________________________________________________________________________
:(7) SOLE VOTING POWER
: (Discretionary Accounts)
NUMBER OF SHARES BENEFICIALLY : 7,801,975 shares
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED OR NO VOTING POWER
: 12,662,200 shares (Shared)
: 2,207,500 shares (No Vote)
__________________________________________
:(9) SOLE DISPOSITIVE POWER
(Discretionary Accounts)
: 10,009,475 shares
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: 12,662,200 shares (Shared)
: 0 shares (None)
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,671,675 shares
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
19.9 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IA
_____________________________________________________________________________
CUSIP No. 723787107 13D
_____________________________________________________________________________
(1) NAMES OF REPORTING PERSONS
Longleaf Partners Fund I.D. No. 63-6147721
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: Funds of investment company shareholders
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEDDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 29e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
_____________________________________________________________________________
:(7) SOLE VOTING POWER
NUMBER OF SHARES BENEFICIALLY : None
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED VOTING POWER
: 8,657,900 shares (Shared)
__________________________________________
:(9) SOLE DISPOSITIVE POWER
: None
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: 8,657,900 shares (Shared)
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,657,900 shares
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
7.6 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IV
_____________________________________________________________________________
CUSIP No. 723787107 13D
_____________________________________________________________________________
(1) NAMES OF REPORTING PERSONS
O. Mason Hawkins I.D. No. XXX-XX-XXXX
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: None
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Citizen of United States
_____________________________________________________________________________
:(7) SOLE VOTING POWER
: (Discretionary Accounts)
NUMBER OF SHARES BENEFICIALLY : None
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED VOTING POWER
: None
__________________________________________
:(9) SOLE DISPOSITIVE POWER
: None
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: None
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None (See Item 3)
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.0 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
Item 1. Security and Issuer
The class of equity security to which this statement on Schedule 13D
relates is the common stock (the "Securities") of Pioneer Natural Resources
Company, a Delaware corporation (the "Issuer"). The Issuer has its principal
executive offices located at 5205 N. O'Connor Blvd., Suite 200, Irving, Texas
75039.
Item 2. Identity and Background
Subparagraphs (a), (b), and (c). This statement is being filed by
Southeastern Asset Management, Inc. ("Southeastern"), an investment advisor
registered with the Securities & Exchange Commission under the Investment
Advisers Act of 1940, as amended. The address of its principal office is 6410
Poplar Avenue, Suite 900, Memphis, Tennessee 38119. Southeastern serves as an
investment advisor to various individual clients, institutions(including
qualified retirement plans), endowment funds and to Longleaf Partners Fund, a
series of Longleaf Partners Funds Trust, a registered investment company
organized as a Massachusetts business trust and having three series or
portfolios. Longleaf Partners Fund, which is joint filer of this Schedule 13D,
may be reached c/o Southeastern Asset Management, Inc., 6410 Poplar Avenue,
Suite 900, Memphis, Tennessee 38119.
The Securities of the Issuer reported in Item 5 herein were acquired
on behalf of the investment advisory clients of Southeastern Asset Management,
Inc., including Longleaf Partners Fund, under sole or shared discretionary
authority granted Southeastern. None of the Securities are owned by or on
behalf of Southeastern or by any of its directors or officers, or any Trustees
or officers of Longleaf.
This statement is also being filed by Mr. O. Mason Hawkins, Chairman of
the Board and Chief Executive Officer of Southeastern, in the event he could be
deemed to be an indirect beneficial owner of the Securities reported by
Southeastern through the exercise of voting control and/or dispositive power
over the Securities as the result of his official positions or ownership of
voting securities of Southeastern. Neither Southeastern nor Mr. Hawkins owns
any Securities for its or his own account and each disclaims beneficial
interest in any of the Securities reported herein.
(d) During the last five years, neither Southeastern nor Longleaf
Partners Fund, nor Mr. Hawkins has been convicted in any criminal proceeding.
(e) During the last five years, neither Southeastern nor Longleaf
Partners Fund, nor Mr. Hawkins has been a party to any civil or administrative
proceeding involving any alleged violations of any securities laws except as
follows: in February 2004, Southeastern and Longleaf Partners Small-Cap Fund
were named in a Complaint filed by The MONY Group, Inc. (MONY) in the US
District Court for the Southern District of New York alleging that Southeastern
and the Small-Cap Fund had violated Sections 14(a) and 13(d) of the Securities
Exchange Act of 1934 with respect to their activities opposing the acquisition
of MONY by AXA Financial. MONY obtained an injunction against Southeastern and
the Small-Cap Fund enjoining distribution of a duplicate copy of MONY's proxy
card, a strategy Southeastern and the Small-Cap Fund's legal counsel had first
reviewed with the SEC's Division of Corporate Finance and received verbal
assurance that such a strategy was permitted if certain conditions were
satisfied. Even though Southeastern and the Small-Cap Fund satisfied the
conditions outlined by the SEC, in light of the injunction, neither of them
actually sent a duplicate of MONY's proxy card. At a May 18, 2004 meeting, MONY
shareholders approved the acquisition by AXA, and MONY subsequently dismissed
their lawsuit against Southeastern and the Small-Cap Fund with prejudice.
(f) Southeastern is a corporation organized and existing under the
laws of the State of Tennessee; Longleaf Partners Funds Trust, of which
Longleaf Partners Fund is a series, is a Massachusetts business trust. Mr.
Hawkins is a citizen of the United States. The names, business addresses, and
principal occupations of each director and executive officer of Southeastern,
and each Trustee of Longleaf Partners Fund are set forth in Schedule I.
Item 3. Source and Amount of Funds or Other Consideration
The respective investment advisory clients of Southeastern used
approximately $622,034,127 in the aggregate to purchase the Securities reported
in this filing. All assets used to purchase Securities were assets of these
respective clients and none were assets of Southeastern. In addition, none of
the proceeds used to purchase the Securities were provided through borrowings
of any nature.
Item 4. Purpose of Transaction
The Securities reported in this filing have been purchased and held
for investment purposes on behalf of client accounts over which Southeastern
has either sole or shared discretionary investment or voting power. The
Securities are reported by Southeastern and by Mr. O. Mason Hawkins, Chairman
of the Board and Chief Executive Officer in the event that either should be
deemed to be a member of a group under Section 13(d)(3) or the beneficial
owner of these Securities under the provisions of subparagraph (b)of Rule
13d-3 under the Securities Exchange Act of 1934. Beneficial ownership on the
part of Southeastern and Mr. Hawkins as members of a group or as beneficial
owners is expressly disclaimed, as permitted by Rule 13d-4. All purchases of
Securities were made for investment purposes only, in the ordinary course of
business of Southeastern as a registered investment advisor. Southeastern may
purchase additional Securities on behalf of clients in the future, or may
sell all or a part of the current holdings of the Securities.
Southeastern is engaged in the business of investment management of
its clients' assets and pursues an investment philosophy of identifying
undervalued situations and acquiring positions in undervalued companies on
behalf of its clients. In pursuing this investment philosophy, Southeastern
analyzes the operations, capital structure and markets of companies in which
its clients invest and continuously monitors the business operations of such
companies through analysis of financial statements and other public documents,
through discussions with knowledgeable industry observers, and with management
of such companies, often at management's invitation.
Southeastern qualifies as an institution which may elect to file
securities ownership reports required by the Securities Exchange Act of 1934 on
Schedule 13G and, as a routine matter, Southeastern utilizes Schedule 13G for
its reporting of the ownership positions held by its investment advisory
clients. As the result of investment analysis or the occurrence of events,
Southeastern may desire to participate in discussions with the particular
portfolio company's management or with third parties about significant matters
in which Southeastern may suggest possible courses of action to assist in
building corporate intrinsic value per share or to cause the Company's true
economic value to be recognized. In such situations, Southeastern may elect to
convert a filing on Schedule 13G to a filing on Schedule 13D in order to be
more active in corporate governance and management matters, and to have the
ability to enter into discussions with third parties concerning proposed
corporate transactions of a significant nature.
On August 7, 2009, Southeastern sent a letter to the Issuer's Board
of Directors urging them to move expeditiously to monetize the Issuer"s
reserves through VPP's, to replace bank debt with intermediate and/or
long term bond issuance, and to use the proceeds to repurchase common stock.
A copy of the text of the letter is included as Schedule III.
In order to maintain the flexibility to discuss our recommendations
as well as other alternatives, including any of the actions or transactions
enumerated in clauses a through j of Item 4 of Schedule 13D, with the
Issuer's management, Board of Directors and/or with third parties, Southeastern
is maintaining its filing on Schedule 13D. Southeastern intends to discuss with
management, the Board, as well as various third parties opportunities to
maximize the value of the company for all shareholders.
Item 5. Interest In Securities Of The Issuer
(a) The aggregate number and percentage of Securities to which this
Schedule 13D relates is 22,671,675 shares of the common stock of the Issuer,
constituting approximately 19.9% of the 113,983,711 shares outstanding.
Common % of outstanding
Shares Common Shares
Held
___________________________________________________________________
Voting Authority
Sole: 7,801,975 6.9%
Shared: 12,662,200* 11.1%
None: 2,207,500 1.9%
Total 22,671,675 19.9%
*Consists of shares owned by Longleaf Partners Fund and Longleaf Partners
Small-Cap Fund, each a series of Longleaf Partners Funds Trust, an open-end
management investment company registered under the Investment Company Act of
1940.
Dispositive Authority
Sole: 10,009,475 8.8%
Shared: 12,662,200* 11.1%
None: 0 0.0%
Total 22,671,675 19.9%
*Consists of shares owned by Longleaf Partners Fund and Longleaf Partners
Small-Cap Fund, each a series of Longleaf Partners Funds Trust, an open-end
management investment company registered under the Investment Company Act of
1940.
(b) Southeastern generally has the sole power to dispose of or to
direct the disposition of the Securities held for discretionary accounts of its
investment clients, and may be granted the sole power to vote or direct the
vote of such Securities; such powers may be retained by or shared with the
respective clients for shared or non-discretionary accounts. Shares held by
any Series of Longleaf Partners Funds Trust are reported in the "shared"
category.
(c) Purchase or sale transactions in the Securities during the past
sixty days are disclosed on Schedule II.
(d) The investment advisory clients of Southeastern have the sole
right to receive and, subject to notice, to withdraw the proceeds from the sale
of the Securities, and the sole power to direct the receipt of dividends from
any of the Securities held for their respective accounts. Such clients may
also terminate the investment advisory agreements without penalty upon
appropriate notice. Southeastern does not have an economic interest in any of
the Securities reported herein.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
The powers of disposition with respect to Securities owned by
discretionary private accounts of Southeastern are established in written
investment advisory agreements between clients and Southeastern, which are
entered into in the normal and usual course of the business of Southeastern
as a registered investment advisor and which are generally applicable to all
securities purchased for the benefit of each such discretionary private
account. There are no special or different agreements relating to the
Securities of the Issuer.
The written investment advisory agreements with clients generally do
not contain provisions relating to borrowing of funds to finance the
acquisition of the Securities, acquisition of control, transfer of securities,
joint ventures, or any of the other transactions listed in the instructions to
Item 7 of Schedule 13D other than voting of proxies. In connection with
voting, Southeastern may be allowed or directed to vote the proxies received
by accounts classified as "discretionary" or "shared" accounts; such authority
is generally retained by the clients for accounts classified as "non-
discretionary".
On March 18, 2009, Southeastern entered into a letter agreement (the "Letter
Agreement") with the Issuer regarding changes to its Board of Directors. A copy
of the Letter Agreement has been filed by the Issuer as Exhibit 10.1 to its
Form 8-K filed March 19, 2009, and is incorporated herein by reference.
Item 7. Material to be Filed as an Exhibit
Schedule I. Information with Respect to Directors and Officers of Southeastern
Asset Management, Inc. and Longleaf Partners Fund. Schedule II. Transactions
in the Securities in the last 60 days. Schedule III. Letter to the Issuer's
Board of Directors dated August 7, 2009.
Signatures
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: August 10, 2009
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President and General Counsel
Longleaf Partners Fund
By: Southeastern Asset Management, Inc.
/s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President & General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, the persons or entities named below agree to the joint
filing on behalf of each of them of this Schedule 13D with respect
to the Securities of the Issuer and further agree that this joint
filing agreement be included as an exhibit to this Schedule 13D. In
evidence thereof, the undersigned hereby execute this Agreement as
of August 10, 2009.
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President and General Counsel
Longleaf Partners Fund
By: Southeastern Asset Management, Inc.
/s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President & General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
SCHEDULE I
Information with Respect to Executive
Officers and Directors
The following information is disclosed for each of the directors and
executive officers of Southeastern: name; business address; and present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is
conducted. Unless otherwise specified, the principal employer of each such
individual is Southeastern Asset Management, Inc., having its principal
executive offices located at 6410 Poplar Ave., Suite 900, Memphis, Tennessee
38119. Each individual identified below is a citizen of the United States.
To the knowledge of management of Southeastern, during the last five years,
no such person has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), and no such person was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities law or finding any violation with respect to
such laws.
SOUTHEASTERN ASSET MANAGEMENT, INC.
Directors
O. Mason Hawkins: Chairman of the Board and Chief Executive Officer of
Southeastern Asset Management, Inc.; Trustee and Co-Portfolio Manager of
Longleaf Partners Funds.
G. Staley Cates: Director and President of Southeastern Asset Management,
Inc.; Co-Portfolio Manager Longleaf Partners Funds.
Richard W. Hussey: Director and Chief Operating Officer of Southeastern Asset
Management, Inc.
Other Officers
James H. Barton Vice President
Scott Cobb Analyst
Deborah Craddock Vice President
Julie M. Bishop Vice President
Jason Dunn Vice President
Jeff Engelberg Senior Trader
Ross Glotzbach Analyst
Lee B. Harper Vice President
Lowery Howell Analyst
Steve McBride Legal Counsel
Andrew R. McCarroll Vice President
E. Andrew McDermott Vice President
Joseph L. Ott Operations Director
Josh Shores Analyst
Ken Siazon Analyst
Frank Stanley Vice President
Jamie Baccus Director of Client Accounting
Gary Wilson Vice President
Mike Wittke Legal Counsel and CCO
LONGLEAF PARTNERS FUND
The following information is disclosed for each of the directors and
executive officers of Longleaf Partners Fund: name; address; and present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is conducted.
Each individual identified below is a citizen of the United States. The address
of each individual for purposes of correspondence is c/o Southeastern Asset
Management, Inc., 6410 Poplar Avenue, Suite 900, Memphis, Tennessee 38119.
To the knowledge of management of Longleaf Partners Fund during the last
five years, no such person has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), and no such person was
a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities law or finding
any violation with respect to such laws except as follows: in February 2004,
Southeastern and Longleaf Partners Small-Cap Fund were named in a Complaint
filed by The MONY Group, Inc. (MONY) in the US District Court for the Southern
District of New York alleging that Southeastern and the Small-Cap Fund had
violated Sections 14(a) and 13(d) of the Securities Exchange Act of 1934 with
respect to their activities opposing the acquisition of MONY by AXA Financial.
MONY obtained an injunction against Southeastern and the Small-Cap Fund
enjoining distribution of a duplicate copy of MONY's proxy card, a strategy
Southeastern and the Small-Cap Fund's legal counsel had first reviewed with
the SEC's Division of Corporate Finance and received verbal assurance that
such a strategy was permitted if certain conditions were satisfied. Even
though Southeastern and the Small-Cap Fund satisfied the conditions outlined
by the SEC, in light of the injunction, neither of them actually sent a
duplicate of MONY's proxy card. At a May 18, 2004 meeting, MONY shareholders
approved the acquisition by AXA, and MONY subsequently dismissed their lawsuit
against Southeastern and the Small-Cap Fund with prejudice.
Trustees
O. Mason Hawkins: Chairman of the Board and Chief Executive Officer of
Southeastern Asset Management, Inc.; Trustee and Co-Portfolio Manager of
Longleaf Partners Funds.
Chadwick H. Carpenter, Jr.: Trustee of Longleaf Partners Funds; private
investor and consultant.
Margaret H. Child: Trustee of Longleaf Partners Funds; marketing consultant.
Daniel W. Connell, Jr.: Trustee of Longleaf Partners Funds; private investor
and consultant.
Rex M. Deloach: Trustee of Longleaf Partners Funds; President, Financial
Insights, Inc.
Steven N. Melnyk: Trustee of Longleaf Partners Funds; Real Estate Development,
The Sea Island Company.
C. Barham Ray: Trustee of Longleaf Partners Funds; Partner, private investor.
Perry Steger: Chairman of the Board, Longleaf Partners Funds; President,
Steger & Bizzell Engineering, Inc.
Schedule II
Transactions in the Last Sixty Days
Transaction Type Date # of Shares Price per Share *
Sale 06/10/09 14,000 $28.10
Sale 06/18/09 11,800 $27.12
Sale 07/20/09 6,600 $26.34
Sales by Southeastern private account clients in the ordinary course of
business on the New York Stock Exchange or through Electronic
Communication Networks (ECNs). In addition to the above
transactions, on June 26, 2009, clients of Southeastern terminating their
advisory relationship removed 9,382 shares from Southeastern's discretion.
* Net of commissions
Schedule III
August 7, 2009
The Board of Directors
Pioneer Natural Resources Company
5205 N. O'Connor Blvd. Suite 200
Irving, Texas 75039
VIA EMAIL: Directors@pioneernrc.com
To the Board of Directors:
Consistent with the Board's fiduciary duty to build the company's intrinsic
value per share prudently and increase its financial flexibility, we urge you
to move expeditiously to monetize the company's reserves through VPP's, to
replace bank debt with intermediate and/or long-term bond issuance, and to
use the proceeds to repurchase common stock. The economics of doing so are
currently extremely compelling.
Because VPP counterparties have unique financial objectives, we have the
opportunity to generate cash proceeds far above the net present value of the
reserves involved. Management will probably resist selling VPP's on two fronts:
the accounting treatment of VPP's as debt by the ratings agencies, and the
complexity that they bring to the P&L. These are insignificant because they are
cosmetic in nature. If the stock market does not see the compelling economics
but instead penalizes the PXD share price because of messy optics, that would
only create an even better opportunity to deploy the cash proceeds into share
repurchase at prices far below the current NAV. Our recommendations will
materially build NAV with very little risk because of the dual benefit of
getting cash proceeds for reserves far above NAV, while then buying reserves
back in the stock market at prices far below NAV.
We encourage replacing bank debt with intermediate to long-term bond issuance
because of the increased financial flexibility that comes through more favorable
financial covenants and longer-term maturities. The slightly higher interest
rates on such debt will be greatly outweighed by the value creation accomplished
by increasing share repurchase at prices well below intrinsic value.
This course of action will not hinder the Spraberry drilling program in any way.
It will enhance it by bringing in more cash immediately. It will also generate
far higher returns than management's current plan to pay down non-current debt
at after-tax returns of less than 5%.
These opportunities are so compelling they should require little discussion or
time delay.
Sincerely,
/s/ Mason /s/ Staley
O. Mason Hawkins G. Staley Cates
Chairman and CEO President
1
SCHEDULE 13D - Pioneer Natural Resources Company ("Issuer")
2