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
Sun, May 1, 1:08 PM
- A new study finds that fracking of U.S. shale fields is causing a global surge in ethane emissions. Ethane is known to contribute to global warming and dangerous air pollution.
- Global ethane levels had been falling since the 1980s, but in 2010 a sensor in Europe picked up a surprise increase. U.S. shale fracking was thought to be the culprit. More recently, a single field in the North Dakota and Montana Bakken Formation has been found to be emitting 2% of the worldwide total.
- "Two percent might not sound like a lot, but the emissions we observed in this single region are 10 to 100 times larger than reported in inventories. They directly impact air quality across North America. And they're sufficient to explain much of the global shift in ethane concentrations," said Eric Kort, the first author of the new study published in Geophysical Research Letters.
- Ethane emissions from other U.S. fields, especially the Texas Eagle Ford, likely contributed as well, the research team says. The findings illustrate the key role of shale oil and gas production in rising ethane levels.
- Baaken stocks include: CLR, ERF, EOG, HK, HES, MRO, OAS, QEP, SM, STO, TPLM, WLL
- Eagle Ford stocks include: APC, APA, COG, CRZO, CHK, COP, ECA, XOM, MUR, PXD
- See the full study here »
Tue, Apr. 26, 12:58 PM
- Pioneer Natural Resources (PXD +7.6%) powers higher after reporting better than expected Q1 earnings and stronger than anticipated improvement in average daily production and an improved full-year production outlook.
- Stifel analysts raised their stock price target to $177 from $155, noting that based on improving Spraberry/Wolfcamp performance, PXD now expects to deliver 12% Y/Y total and 24% Y/Y oil production growth, up from prior guidance of respective 10% and 20% growth; the firm projects PXD will generate 12% and 14% Y/Y total growth and 22% and 17% Y/Y oil growth in 2016 and 2017, respectively.
- Topeka Capital hikes its price target to $190 from $165, believing PXD’s 2016 production guidance remains conservative considering results from its optimized completions, which are tracking at a respective 10%-35% and 25% outperformance in the northern and southern areas of the Midland Basin.
- Now read: Black gold: Sell in May and rue the day
Mon, Apr. 25, 7:15 PM
- Pioneer Natural Resources (NYSE:PXD) +3% AH after reporting a narrower than expected Q1 loss and raising its 2016 production outlook.
- PXD says its Q1 average daily production rose by a greater than expected 3% Q/Q to 222K boe/day, and raises its FY 2016 production outlook to 224K-229K boe/day, now expecting output growth of more than 12% compared with its previous outlook for an increase of at least 10%.
- The company also affirmed its 2016 capital spending plans of ~$2B, much of which will be spent in the Permian Basin; unlike most peers, PXD can rely on a combination of cash flow and asset sales rather than debt to fund its budget.
- Now read Pioneer to add 5-10 drilling rigs if oil prices rebound
Mon, Apr. 25, 4:11 PM
Sun, Apr. 24, 5:35 PM
Tue, Apr. 19, 7:17 PM
- The risk-reward balance for select oil and gas stocks that emphasize balance sheet quality resilient 2016 production profiles looks "increasingly compelling" for long-term investors, Morgan Stanley analysts say.
- Stanley maintains a "balanced" view for 2016 in a second consecutive trough year, but the longer-term outlook grows more compelling; in each of the firm's recovery scenarios, the upside to net asset value reflects the commodity price required to deliver the call on U.S. production in 2019, and is ~166%, 107%, and 40% in its respective bull, base and bear cases.
- The firm's Overweight-rated E&P stocks are Anadarko Petroleum (NYSE:APC), Cimarex Energy (NYSE:XEC), Continental Resources (NYSE:CLR), Devon Energy (NYSE:DVN), Diamondback Energy (NASDAQ:FANG), Noble Energy (NYSE:NBL), Occidental Petroleum (NYSE:OXY) and Pioneer Natural Resources (NYSE:PXD).
- Now read Devon Energy +5% following Morgan Stanley upgrade
Mon, Apr. 18, 2:31 PM
- Investors should stay on defense through select oil and gas stocks such as Concho Resources (CXO +2.5%), Noble Energy (NBL +0.9%), PDC Energy (PDCE +4.3%), Parsley Energy (PE +2.2%), Pioneer Natural Resources (PXD +2.3%), Synergy Resources (SYRG +1.5%) and Cimarex Energy (XEC +1.8%) following the producers' failure to reach a deal at Doha, Stifel says.
- The firm says the balance sheets of the seven companies should remain sound even if WTI oil prices fall short of its $37/bbl forecast for 2016, and the group also owns some of the strongest assets as measured by half-cycle returns.
- A re-surging market share battle between Saudi Arabia and Iran casts doubt on the timing of a realignment of oil supply and demand, and the divide between the two countries runs deep and could widen if the Saudis flood an oversupplied market with additional barrels, Stifel says.
- Now read Stifel downgrades "riskier" oil stocks ahead of OPEC meeting
Thu, Apr. 14, 12:58 PM
- Simmons analysts raise EPS estimates and price targets for oil and gas E&P stocks to reflect a mark-to-market update to the forward curve through 2018.
- “Our E&P coverage universe now offers ~13% upside potential on average as upward revisions to our price targets were more than offset by the bounce in equities,” Simmons says.
- The firm's top large-cap E&P stocks: Apache (APA +0.2%), Concho Resources (CXO -0.3%), EOG Resources (EOG -0.1%), Noble Energy (NBL -0.7%), Pioneer Natural Resources (PXD +0.8%).
- Favorite small- to mid-cap names: Diamondback Energy (FANG -0.7%), Newfield Exploration (NFX -0.3%), Parsley Energy (PE -0.4%).
- Simmons' top natural gas pick: Gulfport Energy (GPOR -1.5%).
- Now read Apache: Turnaround and future growth
Wed, Apr. 13, 8:52 AM
- Pioneer Natural Resources (NYSE:PXD) would add 5-10 drilling rigs if crude oil prices rebound to $50/bbl, a level WTI should reach by year-end 2016 or early 2017, CEO Scott Sheffield tells an industry conference in New York.
- In response to the outlook for continuing weak oil prices, PXD says it is reducing its horizontal drilling activity from 24 rigs at year-end 2015 to 12 rigs by mid-2016, while still growing 2016 production by 10%-plus.
- PXD expects "a major drop" in U.S. production in Q3 and is not yet adding more hedges, Sheffield also says.
- Now read Can Pioneer Natural Resources retain its favor with investors?
Wed, Mar. 30, 3:30 PM
- Analysts at Seaport Global upgrade seven oil and gas producers, advocating for increased exposure to select names they say should protect investors in the event of a move back toward $50/bbl, while downgrading 11 others.
- Seaport upgrades seven companies to Buy: Continental Resources (CLR +3.4%), Callon Petroleum (CPE +1.4%), Marathon Oil (MRO +1.9%), Oasis Petroleum (OAS +2.8%), Rice Energy (RICE +1.7%), Petroquest Energy (PQ +9.1%) and Lonestar Resources (OTCQX:LNREF +6.6%).
- Downgraded to Sell are Whiting Petroleum (WLL +4.1%), Southwestern Energy (SWN -2.5%), WPX Energy (WPX +0.6%), Laredo Petroleum (LPI -1.1%), Jones Energy (JONE +0.9%), Northern Oil & Gas (NOG +1%), Carrizo Oil & Gas (CRZO +1.6%), Memorial Resource (MRD +2.5%), Matador Resources (MTDR -0.3%), Sanchez Energy (SN +1.6%) and PDC Energy (PDCE -0.9%).
- The firm also favors gaining leverage to the Oklahoma STACK play, thus CLR and Newfield Exploration (NFX +1.9%) have "taken the pole position away" from Permian producers Parsley Energy (PE +1.3%) and Pioneer Natural Resources (PXD +1%).
Tue, Mar. 29, 7:02 PM
- Deutsche Bank analysts see “attractive remaining upside” in oil stocks Marathon Oil (NYSE:MRO), Devon Energy (NYSE:DVN), Pioneer Natural Resources (NYSE:PXD) and ConocoPhillips (NYSE:COP) despite recent rallies, as quality reasserts itself.
- Deutsche Bank says MRO is the most levered way to play a crude oil recovery, seeing 2-to-1 upside/downside at $65/$50 long-term oil prices, although the 40% downside from current levels is among the highest in the group.
- Meanwhile, the firm suggests DVN as a more tempered way to play, with 3-to-2 upside/downside at $65/$50 long-term.
Thu, Mar. 24, 6:45 PM
- At least 15 companies in the hard-hit E&P energy industry have announced new share offerings this year, and nearly all have been rewarded by stock investors who normally would cringe as their holdings are diluted.
- Amid widespread worries about energy companies collapsing under debt loads, analysts and investors say shareholders more easily stomach the dilution if it means the companies are adding cash to strengthen their balance sheets.
- Some companies did not urgently need cash but stood to "immunize” their balance sheets in case the oil markets remain ugly into 2017, and others have asset sales pending but the newly raised money means they do not have to worry about timing of proceeds, says Wunderlich's Irene Haas.
- But "the low-hanging fruit [has] been picked," says Christian Ledoux, senior portfolio manager at South Texas Money Management, "not because [other companies] don’t want to, but because they won’t be able to attract investors" until oil prices are much higher.
- E&P companies that have outperformed the S&P 500 Energy Index by more than 10 percentage points since their respective offerings YTD: EGN, OAS, DVN, MRO, NFX, CPE, FANG, WFT, QEP, HES, SYRG.
- Outperforming the index by 1-10 percentage points: PXD, GPOR, PDCE, MTDR
- Underperforming the index: COG
Thu, Mar. 17, 5:39 PM
Wed, Mar. 9, 7:20 PM
- Oil production in the Permian Basin has been much more resilient in the face of the ~65% drop in oil prices since mid-2014 than other shale regions, and in fact has been climbing steadily while the Eagle Ford and Bakken plays are showing overall declines.
- As of early February, Permian's oil production slightly exceeded 2M bbl/day - up from 1.4M bbl/day at the beginning of 2014 - even though the drilling rig count for the basin fell to 181 from about 550 a year earlier, and EIA data released Monday projects Permian’s output at 2.036M bbl/day while Eagle Ford and Bakken are expected to continue to drop.
- "If you are in an oil-producing related business, the Permian Basin is the place to be in 2016,” says energy consultant Charles Perry.
- Relevant tickers include PXD, OXY, CVX, COP, CXO, APA, DVN, APC, XOM, NBL, CPE, PE, FANG, RSPP, LPI, XEC, EQT
Thu, Mar. 3, 12:23 PM
- There are better ways to play the ongoing oil apocalypse other than Exxon Mobil (XOM -1.2%), Deutsche Bank analyst Ryan Todd, pointing to a slow recovery in free cash flow, limited relative leverage to a recovery at this point in the cycle, and trading at a 60% premium to peers.
- One of the questions facing XOM remains the sustainability and attractiveness of its business model in a low-to-moderate crude price environment - i.e., can the combination of cost reductions and capital reallocation support sustainable reserve replacement, dividend/free cash flow growth and improving returns: "If the budget outlook is any indication, we're not there yet," Todd says.
- The analyst prefers Pioneer Natural Resources (PXD -1.4%), Valero Energy (VLO +2.3%), Marathon Petroleum (MPC +5.2%) and HollyFrontier (HFC +4.5%); he rates XOM as a Hold with an $85 price target.
- Earlier: Exxon Mobil plans 25% capex cut to $23B (Mar. 2)
Wed, Mar. 2, 4:27 PM
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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