PIONEERSupply Chain Management

2

FORWARD-LOOKING STATEMENTS

3

PIONEER NATURAL RESOURCES

$20+ Billion Enterprise

Value

$2.8 Billion planned Capex

15%+ Forecasted Production

Growth

4

PIONEER’S GROWTH MODEL

5

HOW CAN SUPPLY CHAIN MOVE THE NEEDLE?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2014 2015 2016 2017 Future

Operational Spend Managed by SCM

6

Bridge the gap between execution and purchasing

HOW CAN SUPPLY CHAIN MOVE THE NEEDLE?

7

GAIN CUSTOMERS’ TRUST!

Understand customers’ needs

Staff up to bridge the gap

Know the business

Implement solutions

HOW CAN SUPPLY CHAIN MOVE THE NEEDLE?

8

PARTNER UP WITH YOUR SUPPLIERS

HOW CAN SUPPLY CHAIN MOVE THE NEEDLE?

9

HOW CAN SUPPLY CHAIN MOVE THE NEEDLE?

P-CardInvoice Only

Invoice Against Contract

Purchase Order

Catalogs

Increase maturity level

10

*Use of catalog item

*Non-catalog item entry

Conduct sourcing

Create contract and load catalog

Create purchase

request and get

approval*

Create and transmit purchase

order

Process receipt /

Field ticket

Verify invoice

against PO & receipt

Process payment

Catalog with Purchase Order

Conduct sourcing

Create contract

Create purchase

request and get

approval*

Create and transmit purchase

order

Process receipt /

Field ticket

Verify invoice

against PO and receipt

Process payment

Non-Catalog with Purchase Order

Conduct sourcing

Create contract and get approval

Verify invoice against contract

Process payment

Invoice directly against contract

Verify invoice / P-Card Bills

Process payment

Invoice only

Process receipt /

Field ticket

P-Card only

Identify need

EVOLVE TO BE PROCESS-ORIENTED

11

SUPPLY CHAIN AT PIONEER HAS BEEN TRANSFORMED TO ALIGN WITH THE BUSINESS AND BECOME A STRATEGIC PARTNER

TRANSFORMATIONAL OPPORTUNITIES

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2014 2015 2016 2017 Future

Managed Spend Curve Advanced Strategies

Strategic Focus

Tactical Focus

SCM Transformation Curve

Supply Chain Sophistication

Value Delivered

What are we working on?

13

MORE TRANSFORMATION!!

UPDATING THE TOOL K IT TO ALLOW:

• SUPPL IER L IFECYCLE MANAGEMENT

• CONTRACT/WORK ASS IGNMENT MANAGED THROUGH KP I s

• CALL CENTER

• ELECTRONIC F IELD T ICKETS

• INVO ICE VAL IDAT ION AND CONTRACT COMPL IANCE

• INCREASE SPEND V I S IB I L ITY

14

P2P PIONEER/SUPPLIER COMMUNICATION TOUCH POINTS

Bid

PIONEER SUPPLIER

SCMAssetService companyCorporate group

PaymentInvoiceElectronic

Field TicketsWork Execution

AribaACL

TreasuryAPAssetSCM

AssetAPSCM

AssetService companyCorporate groupSCM

SCMAPContracts

RiskHSEDOTLegalTreasurySecurity

15

ENABLING OPS AND MAINTENANCE

16

LATEST IMPROVED FIELD TICKETField ticket summary includes tabular review and quick button menu

Electronic Field Tickets

17

ELECTRONIC FIELD TICKETS

Attachment view

18

DATA

19

ANALYTICS

-80% -60% -40% -20% 0% 20% 40%

Well stimulation

Contract drilling

Casing & tubing

Rentals

Mud & chemicals

Labor & transport

Water

Directional services

Supervision

Wireline

Fuel

Cement services

All other cost

Changes in Well Costs Due to Prices, Efficiencies and Well Design

Looking Forward

21

WHAT IS IMPORTANT?

SUPPLIERS, SUPPLIERS, SUPPLIERS

Reliability

Efficiency

Service

Quality

Partner ship

Cost

22

ENSURE THE TRANSFORMATION IS SUSTAINABLE

Solid Processes –not people

based

Metric Driven Results

Partner with

suppliersCommon

Goals Across

Enterprise

Standardization

23

SCM’S ARCHITECTURE

DATA

Flex

ibili

ty

Entr

epre

neur

ship

Alig

nmen

t

Strategy