Pioneer - Handle With Care
Pioneer Natural Resources: Recent Stock Offering Makes Sense In Light Of 3-Way Collars On 2016 Production
Michael Fitzsimmons • 59 Comments
Michael Fitzsimmons • 59 Comments
Yesterday, 3:19 PM
- The energy sector (XLE +4%) bursts to the top of the leaderboard after OPEC announces a planned production cut to 32.5M bbl/day at the informal OPEC meeting in Algiers.
- Among individual energy stocks: XOM +3.8%, CVX +2.7%, RDS.A +2.8%, BP +3.4%, TOT +2.4%, PBR +4.5%, COP +6.4%, MRO +8%, MPC +1.4%, PSX +1.9%, VLO -0.1%, EOG +6.2%, PXD +6.4%, OXY +4.5%, DVN +7.9%, CLR +8.3%, APA +6.2%, NOV +8.1%, SLB +3.3%, BHI +3.6%, HAL +4.3%, KMI +3.4%, ENB +2.6%, EPD +1.9%, ETP +2.9%.
Thu, Sep. 22, 6:31 PM
- Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield predicts that 100 oil rigs could be added in the Permian Basin, the most coveted U.S. oil field, over the next year.
- Sheffield says the Permian region can grow production by 300K bbl/day per year, and sees Permian production "really taking off" in H1 2017, with aggregate U.S. production beginning to grow again around the end of 2017 or the following year.
- Last week, oil rigs in the Permian rose by two to 202, representing nearly half the 416 oil rigs in operation across the U.S., according to Baker Hughes data.
Mon, Aug. 29, 6:25 PM
- Williams Capital believes oil industry fundamentals are solid despite current commodity price levels but is cautious overall and advises investors not to chase the recent run at current valuations.
- However, the firm recommends select underappreciated companies with lower expectations and re-rating potential, and thinks companies situated in core resource plays that can demonstrate further capital efficiency improvements with catalysts will continue to garner top valuations and M&A premiums.
- Two of Williams' favorites are SM Energy (NYSE:SM), which the firm says remains one of the cheapest names in the sector with a solid balance sheet and assets as well as a conservative management team, and Newfield Exploration (NYSE:NFX), which Williams sees thriving through the current downturn given its strong balance sheet, ample financial liquidity and strong hedge book.
- Also initiated with Buy ratings: Cabot Oil & Gas (NYSE:COG), Energen (NYSE:EGN), Gulfport Energy (NASDAQ:GPOR), Oasis Petroleum (NYSE:OAS), PDC Energy (NASDAQ:PDCE), Pioneer Natural Resources (NYSE:PXD).
- Driven largely by valuation, Williams assigns Hold ratings on Diamondback Energy (NASDAQ:FANG), Gastar Exploration (NYSEMKT:GST), Laredo Petroleum (NYSE:LPI), Parsley Energy (NYSE:PE), Rice Energy (NYSE:RICE) and Cimarex Energy (NYSE:XEC).
Mon, Aug. 29, 5:47 PM
- Crude oil markets will continue to be plagued by volatility in the short and medium term, according to executives from ConocoPhillips (NYSE:COP) and other oil companies at the ONS Conference in Norway.
- "Volatility is here to stay,” COP CEO Ryan Lance said at the conference, one of the industry's biggest. Market rebalancing “will extend into 2017. The inventory levels are still quite high."
- The huge global oil oversupply that has weighed on prices for the past two years may not clear until H2 2017, according to Royal Dutch Shell (RDS.A, RDS.B) chief energy adviser Wim Thomas.
- Not everyone is so pessimistic: IHS Markit's Daniel Yergin said oil supply and demand will balance this year, adding that spending on onshore oil and gas will increase in 2017.
- But that does not mean a turnaround is imminent, according to Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield: “The downturn’s behind us, but the question is how long do we stay in a $45-$50 oil-price scenario? I think 2017 could be another tough year," adding that things could turn around in 2018.
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Thu, Aug. 25, 4:25 PM
Wed, Aug. 24, 5:45 PM
- Deutsche Bank analysts offer a hopeful view for top oil E&P companies as capital efficiencies continue to improve, and raise their price targets on Pioneer Natural Resources (NYSE:PXD), Devon Energy (NYSE:DVN), Marathon Oil (NYSE:MRO) and EOG Resources (NYSE:EOG).
- Capital efficiency should improve through 2017, driven by cost concessions and continued well performance efficiency gains, and while acknowledging some near-term headwinds as rigs continue to be added in the Permian and STACK in H2, the firm says it remains constructive on a tightening market into 2017.
- The firm lifts its price target for PXD to $210 from $180, for DVN to $55 from $45, for MRO to $21 from $20, and for EOG to $105 from $96.
Wed, Aug. 24, 4:58 PM
- Pioneer Natural Resources (NYSE:PXD) is added to the US Focus List at Credit Suisse, which reiterates its Outperform rating and $212 price target.
- The firm expects PXD to enhance recoveries and returns, and says the company also stands to gain from control over the operating expenses as it continues to push capital.
- Credit Suisse says PXD "has de-rated relative to the peer group by 1.5x on 2018 strip estimates" and trades at an unwarranted discount to peers EOG Resources and Concho Resources given better leverage metrics and the firm's forecast for superior debt-adjusted cash flow per share growth through 2018.
Mon, Aug. 8, 11:57 AM
- SM Energy’s (SM +7.2%) $980M purchase of drilling rights in the Permian Basin shows that producers are willing to pay a premium for access to one of the few spots where oil exploration still turns a profit, Bloomberg reports.
- SM will pay the equivalent of $39.5K/acre for drilling rights across 24,783 acres in the Permian Basin, will ahead of the $25K-$35K that acreage in the Permian’s Midland Basin section had been fetching as recently as May and almost doubling SM's holdings in the region.
- Other Permian producers also are trading higher, including: PXD +2.2%, CXO +1.8%, XEC +2.1%, CWEI +6.1%, APA +3.8%, FANG +2.1%, PE +1.2%, QEP +3.6%, RSPP +2.4%, APC +2.6%, DVN +3.7%, MTDR +2.3%.
Thu, Jul. 28, 2:29 PM
- Pioneer Natural Resources (PXD +4.2%) CEO Scott Sheffield says improved fracking techniques have helped the company cut production costs in the Permian Basin to nearly $2/bbl, low enough to compete with Saudi Arabia.
- Sheffield said during today's earnings conference call that, excluding taxes, production costs have fallen to $2.25/bbl on horizontal wells in west Texas' Permian Basin, making it on nearly even footing with the lowest-cost producers of conventional oil.
- "The Permian is going to be the only driver of long-term oil growth in this country. And it's going to grow on up to ~5M bbl/day from 2M," even in a $55/bbl price environment, the CEO says, adding that other U.S. shale plays, notably the Bakken in North Dakota and the Eagle Ford in south Texas, may not be able to weather the downturn as well given their higher costs.
- PXD expects production to grow 15%/year through 2020 after posting Q2 output of 233K boe/day, with most of the growth in the Permian, although it also has acreage in the Eagle Ford.
Thu, Jul. 28, 10:47 AM
- Pioneer Natural Resources (PXD +3%) pushes higher reporting a lighter than expected Q2 loss, not including derivative losses, on a 22% increase in revenues to $786M, which also edged estimates; counting derivatives, Q2 net loss totaled $268M, above the $218M year-ago loss.
- PXD's Q2 production averaged 233K boe/day, up 5% Y/Y and significantly above guidance of 224K-229K boe/day, and oil production rose 10% Y/Y, all driven by the Spraberry/Wolfcamp horizontal drilling program.
- PXD says it plans to increase its horizontal rig count to 17 rigs from 12 in the northern Spraberry/Wolfcamp during H2, beginning in September; raises its 2016 production growth forecast to at least 13% from 12% to reflect improving Spraberry/Wolfcamp well productivity, and expects the 17 rigs to deliver 13%-17% production growth in 2017.
- PXD increases its 2016 capital budget to $2.1B from $2B to cover the cost of the five horizontal drilling rigs.
Wed, Jul. 27, 4:15 PM
Tue, Jul. 26, 5:35 PM
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Mon, Jul. 18, 3:58 PM
- Pioneer Natural Resources (PXD +0.1%), EP Energy (EPE +0.9%), Carrizo Oil & Gas (CRZO +2.8%), Sanchez Energy (SN +2.5%) and Synergy Resources (SYRG -0.1%) are all upgraded to Buy at KLR Group in advance of Q2 earnings reports.
- At the same time, the firm downgrades Devon Energy (DVN -0.4%), Consol Energy (CNX -1.3%) and Continental Resources (CLR +0.4%) to Accumulate from Buy on valuation given their substantial share price appreciation over the past four months.
- KLR expects the U.S. E&P industry's cost intensity to decline another 10% this year as capital spending is rationalized another 45%, but it anticipates spending ultimately will increase ~70% "assuming a substantive recovery in commodity prices."
- The firm's new stock price targets are $218 for PXD, $6.50 for EPE, $49 for CRZO, $9 for SN, $9 for SYRG, $44 for DVN, $20 for CNX and $54 for CLR.
Wed, Jul. 13, 3:19 PM
- Whiting Petroleum (WLL -2.3%) is upgraded to Outperform from Neutral with a $14 price target, up from $13, at Credit Suisse, which says the stock's pullback following the recent debt swap has provided a compelling entry point.
- The firm says WLL's extensive inventory in the core of the Williston coupled with improving type curves from larger completions provide compelling near-term catalysts, as drilling activity should accelerate in 2017 at the latest; asset sales remain another key catalyst, with remaining assets on the block including North Ward Estes and the monetization of WLL’s Williston Basin gas plants.
- Credit Suisse also sees strong upside potential for Concho Resources (CXO -1%), Pioneer Natural Resources (PXD -1.7%) and Newfield Exploration (NFX -1.1%) as well performance improves in the Permian and STACK.
- WLL and other oil companies are broadly lower after WTI crude fell below $45/bbl as EIA weekly storage data showed a surprise rise in stockpiles.
Wed, Jul. 13, 2:28 PM
- Lower costs and improved productivity have enabled U.S. shale oil drillers to made major strides in adapting to lower crude prices, energy consultant Wood Mackenzie says.
- Shale drillers have cut the costs of producing new supplies of oil by as much as 40% in the past two years by pushing for lower rates from the companies that provide rigs, pipes and other services.
- Wood Mackenzie estimates that oil companies could make money in west Texas' Bone Spring and Wolfcamp tight oil plays with $37/bbl oil, the Eagle Ford Shale in south Texas could turn a profit at $48/bbl, the average breakeven price in North Dakota’s Bakken Shale is $58/bbl, while breakeven at Oklahoma’s SCOOP region is $35/bbl.
- The report says the big winners will be incumbent operators in the key shale oil patches in the lower 48 U.S. states, such as in the Mid-Continent and Permian Basin, including U.S. independents such as EOG Resources (EOG -1.7%), Pioneer Natural Resources (PXD -2.1%), Continental Resources (CLR -2.1%) and Apache (APA -1.9%), as well as oil giants Exxon Mobil (XOM -0.5%) and Chevron (CVX -0.2%).
Tue, Jun. 28, 6:36 PM
- Pioneer Natural Resources (NYSE:PXD) rose 2% in today's trade after raising its production guidance while maintaining that its capital program is funded through 2018.
- PXD estimates FY 2016 production growth will rise 12% Y/Y, as it increases its horizontal rig count to 17 from 12 rigs in the northern Spraberry/Wolfcamp during H2 2016; it sees 2017 production growth of 13%-17%.
- PXD says it sees planned 2016 capital spending of $2.1B vs. $2B last year, with $1.95B to be used in the Permian Basin.
- The company also says it is hedged for 85% of oil production this year and 50% covered for next year.