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
Pioneer (Huge) Resources
Yesterday, 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.
Yesterday, 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.
Wed, Jun. 22, 11:22 AM
- Pioneer Natural Resources (PXD +0.2%) is slightly higher after Credit Suisse raised its stock price target to a Street-high $199 from $183, reflecting PXD's "updated rig cadence" following its recent equity raise as net asset value accretion more than offsets equity dilution.
- "While PXD has lagged the Permian peer group following the equity raise, we view the relative weakness as a buying opportunity given the company's updated growth trajectory," Credit Suisse says in maintaining its Outperform rating.
- The firm notes that PXD plans to add five rigs during the rest of the year, with at least a $100M increase in capex, and the company provided a 13%-17% growth target for 2017 and 22%-26% for oil growth assuming a 17 rig program.
Thu, Jun. 16, 3:25 PM
- Pioneer Natural Resources (PXD -5.2%) gaps sharply lower following yesterday's announcement that it is offering 5.25M common shares to fund a $435M acquisition of Midland Basin acreage, but analysts generally support the deal.
- Baird maintains its Outperform rating, lifts its stock price target to $196, and raises its 2017 earnings estimates, saying the deal improves the company's long-term economic development opportunity.
- Canaccord says "all ahead full" for PXD, which the firm calls "a top pick given its inventory depth, growth profile and sterling balance sheet," and says the acquisition is fully covered and will leave a balance of $500M in capex for 2017.
- Susquehanna says PXD is "sticking to its strategy of growing production and improving its understanding of completion optimization through the downturn," and remains positive on the stock due to continued strong operational execution and robust balance sheet.
Wed, Jun. 15, 5:32 PM
Wed, Jun. 15, 4:53 PM
- Pioneer Natural Resources (NYSE:PXD) agrees to acquire ~28K acres in the Midland Basin for $435M from Devon Energy (NYSE:DVN), an increases its FY 2016 capital spending outlook to $2.1B from $2B.
- PXD says current net production in the acreage is ~1K boe/day (~70% oil), and expects before-tax internal rates of return on the wells to exceed 50%.
- PXD says the acquisition and its improving outlook for oil prices enable it to increase its horizontal rig count in the northern Spraberry/Wolfcamp to 17 rigs from 12, with the first rig to be added this September and two rigs added in each of October and November.
- Based on running 17 rigs during 2017, PXD expects to deliver a production growth rate of 13%-17% in that year, with Spraberry/Wolfcamp area production growth of 28%-32%.
- To fund the deal, PXD announces a public offering of 5.25M common shares, with an underwriters option to purchase up to an additional 787.5K shares; shares -2.5% AH.
Mon, Jun. 13, 2:45 PM
- Plenty of upside remains in E&P names even after sharp YTD gains, Morgan Stanley analysts say amid confidence that the oil market recovery is occurring and oil prices will need to hit $80/bbl or so to deliver the production growth the world will need.
- Given recent production outages, the firm sees a risk of an H2 pullback yet also a long-term recovery that is "the bigger and a higher conviction event in a low conviction world and we add risk, yet not go 'all-in' here."
- Stanley upgrades Concho Resources (CXO +0.1%) and Cenovus Energy (CVE +0.9%) to Overweight from Equal Weight, and says it also remains positive on Pioneer Natural Resources (PXD +0.6%), Devon Energy (DVN +2.4%), Continental Resources (CLR +1.7%) and Cimarex Energy (C -0.8%); the firm cuts Occidental Petroleum (OXY -0.3%) to Equal Weight from Overweight on relative value.
Thu, May 26, 4:58 PM
- Pioneer Natural Resources (NYSE:PXD) is growing more optimistic about the oil environment, and Senior VP Frank Hopkins tells CNBC the company is planning for the return of 5-10 rigs once it is confident the upturn in oil is more sustainable.
- Hopkins says PXD is monitoring oil inventory data and when officials are convinced the market has turned, they will move on putting the rigs into operation in the Northern Spraberry/Wolfcamp.
- "It's not so much getting to $50 at a particular point in time. It's having a view that oil at $50 will stay at $50," Hopkins says. "The industry supply/demand fundamentals have to improve."
- PXD was running a total of 24 rigs at the end of last year, and Hopkins says it willl be down to 12 by the end of June; "We shut down our Eagle Ford operations, and we shut down our joint venture area in the Permian Basin. The rigs we put back would go to our most prolific area," he says.
Thu, May 19, 4:43 PM
- Pioneer Natural Resources (NYSE:PXD) says CEO Scott Sheffield will retire effective Dec. 31, to be succeeded by current COO Timothy Dove.
- Sheffield, who joined PXD's predecessor company Parker & Parsley as an engineer in 1979 and became CEO in 1997 and Chairman in 1999, also will retire as Chairman at year-end but remain on the board; he has become known as one of the most outspoken U.S. energy CEOs, and was a critical part of the successful push to end the long-standing ban on exporting oil pumped in the U.S.
- Dove joined the company in 1994, served as VP and CFO beginning in 2000, and was named President and COO in 2004 and elected to the board in 2013.
Wed, May 4, 10:59 AM
- At least some U.S. oil executives say they are getting ready for new drilling projects, as crude prices rising to ~$45/bbl from nearly $25 since February leads them to believe the worst of the oil downturn may be over, according to a Reuters analysis.
- "The outlook for commodity prices is improving... Things look better today than they did 90 days ago," Anadarko Petroleum (APC -4.2%) CEO Al Walker said yesterday at his company's earnings conference call.
- Halliburton (HAL -2%) CEO Dave Lesar said yesterday in his company's earnings call that "We do think that potentially we'll see an upswing in the rig count in the back half of the year... When this thing snaps back, it's going to snap back hard."
- Pioneer Natural Resources (PXD -1.5%) said recently that it would add rigs if oil stays near or rises from $50/bbl, and Whiting Petroleum (WLL +0.6%) said it would soon frack 44 wells to bring them online, just weeks after saying it would freeze virtually all new work.
Pioneer Natural Resources Co. operates as an independent oil and gas exploration and production company. It is a holding company whose assets consist of direct and indirect ownership interests in, and whose business is conducted substantially through, its subsidiaries. The company is one of the... More
Sector: Basic Materials
Industry: Independent Oil & Gas
Country: United States
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