Pioneer has achieved significant growth
over the prior 5 years by strategically thinking through potential
acquisitions, determining downside outcomes and identifying growth
prospects within, and outside the specific project. As the Allison
case illustrates, the company has the capacity to see a larger opportunity
within smaller projects. Pioneer, largely Mr. Allard, is engaged
daily in the process of interacting with industry participants,
discussing potential opportunities and extending himself as a potential
In negotiating acquisitions, the company
maintains a nimbleness and perseverance to reach agreements that
include conditional walk-away rights, provide ample time to ensure
minimum throughput, and scout the potential to compound the scope
of the project with neighboring opportunities. Pipeline dispositions
of this scale are generally local and provide "locals"
a distinct advantage.
Acquisitions are only as good as their eventual
throughput. Pioneer prides itself on the ability to provide win-win
solutions to producers. While this may take time to educate a customer
on how, over the long term a particular solution may be more beneficial,
it pays in spades once the light goes on. Providing cost-effective,
long-term solutions and seamless service keeps producers flowing
to the line and willing to add new wells to the system. Further,
reputation attracts new producers to the company. And when there
is a split in the seam? React deftly.
Pioneer has assembled a team of knowledgeable,
dedicated field personnel who conduct daily inspections of assigned
systems and are empowered to react to the needs of producers. Many
of the field operators have been active on their systems predating
Pioneer's acquisition and take pride in the high level of service
they provide. This team is truly the face of Pioneer to the producer
community, providing a positive reflection on Pioneer as a company.
The recent acquisition of Aquila systems
has both required and afforded the company an opportunity to upgrade
back office operations. Two key additions in the areas of Revenue
Accounting and Contracts Administration have bolstered the back
office efficiency and accountability. Pioneer has elevated its level
of responsiveness, reporting and internal control.
Operating 10 systems may appear cumbersome.
Certainly having one system generate $20 million in revenue is a
much more efficient deployment of capital; on it's face. Pipes are
land locked. New production is not. The system diversification the
company currently maintains provides a portfolio affect on earnings
streams over the long term. As development plays move about West
Texas, Pioneer is not captive to one field or project, but can access
new production in multiple areas.
Pioneer has evolved into a streamlined
efficient operation with a deepening knowledge of its customers
and profit center. This organizational growth tends both to the
current needs of the company while establishing a path to overcome
the challenges its growth strategy will present.