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
Wed, Feb. 10, 6:19 PM
- Pioneer Natural Resources (NYSE:PXD) -1.5% AH after beating Q4 earnings estimates and saying it plans to cut in half the number of rigs it operates to 12 by mid-2016.
- PXD also reverses its plan to raise drilling expenses for 2016, cutting its capex forecast to $2B from guidance of $2.4B-$2.6B just a month ago; its 2015 budget totaled $2.2B.
- Despite the cuts, PXD sees production growing ~10% this year after producing 204K boe/day in FY 2015, along with 215K boe/day in Q4, with oil accounting for 53% of total output.
- PXD says it added proved reserves totaling 210M boe during 2015 from discoveries, extensions and technical revisions of previous estimates, equating to a drillbit reserve replacement of 273% of its FY 2015 production of 77M boe.
Wed, Feb. 10, 4:18 PM
Tue, Feb. 9, 5:35 PM
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Tue, Feb. 9, 12:58 PM
- Crude oil at $30/bbl is blowing a hole in the insurance that U.S. shale drillers bought to protect themselves against a crash, Bloomberg reports.
- Companies including Callon Petroleum (CPE -5.6%), Noble Energy (NBL -3.5%), Pioneer Natural Resources (PXD -3.6%), Marathon Oil (MRO -8%), Rex Energy (REXX -1.8%) and Bonanza Creek Energy (BCEI -11.4%) used a three-way hedge strategy that does not guarantee a minimum price if oil falls below a certain level; while three-ways can be cheaper than other hedges, they leave drillers exposed to sharp declines and risk worsening a cash shortfall for companies trying to survive the worst oil crash in 30 years.
- For example, CPE CFO Joseph Gatto told investors in December that the company had hedged ~4K bbl/day in 2016, or 40% of its projected output, at $56/bbl; roughly half of those contracts are worth significantly less at $30/bbl because CPE employed three-ways.
Thu, Jan. 21, 3:49 PM
- Crude oil futures settled more than 4% higher on the back of perceived oversold conditions, despite a higher than expected inventory build; March WTI jumped 4.2% to settle at $29.53/bbl after trading as high as $30.25, while Brent surged 4.9% to $29.25.
- Crude prices were supported by the inventory increase in this morning's EIA report, which was less than the API’s report released on Wednesday, says Phil Flynn, senior market analyst at Price Futures Group; also, reports of Libyan oil tanks on fire eased speculation that Libya would be exporting more oil soon.
- Also supportive for prices, oil production in the lower 48 states edged lower for the first time in seven weeks, “which is at least ‘less bearish’ for the extremely oversupplied global oil market,” says Tyler Richey of The 7:00’s Report.
- The energy sector is bouncing after hitting a multiyear low yesterday: XOM +1.4%, CVX +2.7%, RDS.A +3.8%, BP +3.7%, TOT +2.3%, STO +4.5%, COP +6.2%, MRO +12.2%, APC +10.3%, OXY +2.1%, EOG +6.4%, PXD +2.7%, APA +8.2%, HES +7%, KMI +15.5%, EPD +3.3%, ETP +6.8%.
- ETFs: UNG, USO, OIL, XLE, UGAZ, UCO, DGAZ, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, BOIL, GAZ, DBO, DWTI, ERY, FCG, DIG, GASL, DTO, DUG, KOLD, BGR, USL, XES, IYE, IEO, UNL, IEZ, DNO, FENY, PXE, PXI, FIF, PXJ, OLO, SZO, NDP, RYE, DCNG, FXN, OLEM, DDG
Sat, Jan. 16, 9:15 AM
- Oppenheimer's Fadel Gheit and Luis Amadeo offer a bleak view of the Q4 2015 earnings season for oil and gas producers, warning of sharply lower earnings with deeper losses and wider cash flow deficits Y/Y and Q/Q.
- Among the integrated oil majors, the analysts see overall Q4 earnings falling by more than 50% Y/Y and more than 30% Q/Q; they expect Chevron (NYSE:CVX) to show the steepest earnings decline of 60%-plus Y/Y and 50%-plus Q/Q, while anticipating Exxon Mobil (NYSE:XOM) to report the lowest declines of 40%-plus Y/Y and 25%-plus Q/Q.
- Of the 15 large E&Ps Oppenheimer covers, 13 likely will report losses in Q4 vs. 10 in Q3 and none in Q4 2014, with only Devon Energy (NYSE:DVN) and Range Resources (NYSE:RRC) reporting a profit; the analysts expect most of the other 13 to report steeper declines, including Anadarko Petroleum (NYSE:APC), Apache (NYSE:APA), Chesapeake Energy (NYSE:CHK), EOG Resources (NYSE:EOG), Hess (NYSE:HES), Marathon Oil (NYSE:MRO), Murphy Oil (NYSE:MUR), Pioneer Natural Resources (NYSE:PXD) and Southwestern Energy (NYSE:SWN).
- Earlier this week, Gheit predicted that half of U.S. shale oil producers could go bankrupt before the crude market reaches equilibrium.
Fri, Jan. 15, 3:20 PM
- Nymex crude oil settled -5.7% at $29.42/bbl, its lowest level since November 2003, with concerns that Iran will soon add to the world's glut of crude supplies added to fears about an economic slowdown in China.
- When a decade of trade and banking sanctions against Iran end, perhaps as soon as Monday, the country could lift exports by 500K bbl/day and gradually raise shipments by the same amount again; Iran reportedly has 22 VLCCs floating off its coast, with 13 fully or almost fully loaded.
- Among major energy companies today: XOM -1.8%, CVX -2.2%, RDS.A -5%, BP -5.2%, COP -4.9%, TOT -3.7%, PBR -8.6%, E -4.5%, TOT -3.7%, STO -2.5%, MRO -10.2%, HES -3.6%, OXY -1.8%, DVN -5.8%, APA -4.9%, EOG -3.8%, APC -7.9%, PXD -2.6%, CXO -4.9%.
- ETFs: UNG, USO, OIL, XLE, UGAZ, UCO, DGAZ, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, BOIL, GAZ, DBO, DWTI, ERY, FCG, DIG, GASL, DTO, DUG, KOLD, BGR, USL, XES, IYE, IEO, UNL, IEZ, DNO, FENY, PXE, PXI, PXJ, FIF, DBE, OLO, SZO, NDP, RYE, DCNG, RJN, FXN, OLEM, DDG
Thu, Jan. 14, 6:47 PM
- Natural gas liquids could rebound in 2016 after a tough 2015, boosting stocks such as Range Resources (NYSE:RRC), Cimarex Energy (NYSE:XEC), Memorial Resource Development (NASDAQ:MRD), Pioneer Natural Resources (NYSE:PXD), Antero Resources (NYSE:AR) and Newfield Exploration (NYSE:NFX), Citigroup analysts say.
- U.S. propane inventories and exports both rose to hit record highs at the end of 2015, but Citi believes a continued increase in exports through 2016, along with slowing production, will serve as a release valve to help clear an oversupplied domestic propane market.
- Although the price of both propane and ethane remain low, Citi sees visibility on an NGL price recovery in 2016, driven by a rebound in propane and butane prices, but not necessarily ethane, and reinforced by the firm’s forecast for a more balanced global oil market in H2 2016.
Thu, Jan. 7, 2:38 PM
- Pioneer Natural Resources (PXD +0.2%) is upgraded to Buy from Neutral with a $145 price target, raised from $130, at Citigroup even after yesterday's shellacking driven by an upsized secondary stock offering.
- The firm likes PXD’s now stronger balance sheet and improved capital efficiency from stronger Permian well results, and notes potential for further upside as enhanced completions could increase the company’s EUR type curve for the Wolfcamp A interval in the Northern Midland Basin.
- PXD also is upgraded to Buy from Hold with a $165 price target, up from $150, at Deutsche Bank.
- Earlier: Pioneer Natural stock sale not an option for most U.S. shale companies
Thu, Jan. 7, 10:39 AM
- Pioneer Natural Resources' (PXD +1.3%) unexpected $1.4B equity raise means the fittest U.S. shale oil producers can still tap capital markets, but it is not a signal that the floodgates are open, since highly leveraged firms cannot do what PXD did.
- Reuters reports that the PXD offering was ~2x oversubscribed, in part because the company is known for its low debt load, high-quality acreage in the Permian Basin and aggressive derivatives program that helps it sell most of its oil well above spot prices.
- Some analysts say PXD was being proactive by raising cash now, perhaps a tacit admission by management that oil prices may not recover anytime soon.
- PXD fell sharply yesterday to $116 as the addition of 12M shares was dilutive by 8%, but Cowen analysts say the stock could be valued at $190 if new wells continue to show signs of rising productivity.
Wed, Jan. 6, 10:54 AM
- Pioneer Natural Resources (PXD -6.9%) is sharply lower after upsizing its public offering to 12M shares from 10.5M and pricing the offering at $117/share, resulting in expected gross proceeds of $1.4B.
- The share sale shows capital markets are still willing to back the shale industry even as crude oil trades at the lowest in 11 years, and if followed by other top shale producers it could lead to a shallower than expected drop in U.S. oil production, putting further downward pressure on crude prices.
- Earlier: Pioneer Natural to launch 10.5M-share offering, lifts Q4 production guidance
Wed, Jan. 6, 9:18 AM
Tue, Jan. 5, 5:41 PM
Tue, Jan. 5, 4:44 PM
- Pioneer Natural Resources (NYSE:PXD) -4.1% AH after announcing a public offering of 10.5M common shares, with an underwriters option to purchase up to an additional 1.575M shares.
- PXD says it plans to use the proceeds for general corporate purposes, including continuing to actively develop its acreage position in the Spraberry/Wolfcamp play in west Texas while maintaining a strong balance sheet during the current period of low commodity prices.
- PXD also says it expects Q4 2015 production of 213K-215K boe/day, above the top end of its prior outlook for 206K-211K boe/day, driven by its strong Spraberry/Wolfcamp horizontal drilling program; during the quarter, PXD placed 44 Spraberry/Wolfcamp horizontal wells on production, as expected.
- PXD says it may write down the value of its Eagle Ford Shale oil and gas properties by $800M-$1B and pipe inventory by $50M-$70M during Q4.
- PXD's preliminary 2016 capital spending program is expected at $2.4B-$2.6B, with 10%-15% Y/Y production growth vs. 2015; PXD is reducing its horizontal rig count in the Eagle Ford Shale to four rigs from six, with potentially further decreases if low commodity prices continue to adversely affect well returns.
Dec. 28, 2015, 11:45 AM
- WTI crude is down 3.2% to $36.90/barrel, and Brent crude down 2.5% to $36.95/barrel, leaving prices close to 11-year lows. Energy industry firms are among the biggest decliners on a day the S&P is down 0.6%.
- Fears about excess supply appear to be weighing once more. OPEC figures point to a global oil supply glut of more than 2M barrels (over 2% of global demand); a smaller glut is expected next year. Meanwhile, Japanese government data indicates the country's oil product sales fell to a 46-year low in November, and European data suggests the continent's oil product demand growth turned negative in October.
- The biggest casualties include Whiting Petroleum (WLL -9.9%), Oasis Petroleum (OAS -8.2%), Vanguard Natural Resources (VNR -12.5%), Denbury Resources (DNR -8%), SandRidge Energy (SD -8.1%), SandRidge Permian Trust (PER -10.9%), SandRidge Mississippian Trust (SDT -7.5%), U.S. Silica (SLCA -6.2%), Marathon Oil (MRO -6.7%), C&J Energy Services (CJES -8.1%), MV Oil Trust (MVO -9.2%), Bonanza Creek (BCEI -6.4%), Parker Drilling (PKD -7.9%), and Continental Resources (CLR -5.9%).
- Other notable decliners include Kinder Morgan (KMI -5%), Williams Partners (WPZ -4.4%), EOG Resources (EOG -3.4%), Cheniere Energy (CQP -3.6%), SeaDrill (SDRL -3.5%), Encana (ECA -2.8%), Devon Energy (DVN -2.7%), Ensco (ESV -3.8%), Hercules Offshore (HERO -4.7%), Atwood Oceanics (ATW -4.9%), Helmerich & Payne (HP -3.8%), and Pioneer Natural (PXD -2.6%).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Dec. 16, 2015, 2:31 PM
- Moody's says it is reviewing 29 E&P companies from the U.S. and seven from Canada for a potential downgrade, saying the companies "will be stressed for a longer period with much lower cash flows, difficulty selling assets and limited capital markets access."
- Based on the severity and potential duration of the industry challenges, Moody's expects many companies will be downgraded one notch and others could be lowered by more than one notch.
- Yesterday, the ratings agency cut its oil and gas price assumptions in light of continuing oversupply in the global oil markets and the U.S. natural gas market.
- Among the U.S. companies: APC, AR, APA, XEC, CXO, COP, CLR, DNR, EGN, EOG, EPE, EQT, HES, MRO, MUR, NFG, NFX, NBL, OXY, PXD, QEP, RRC, SM, SWN, UNT, WLL, WPX
- From Canada: BTE, CNQ, OTCQX:COSWF, CVE, ECA, OTCPK:HUSKF, SU
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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