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
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. 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%).
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.
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.
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. 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
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%).
Thu, Mar. 17, 5:39 PM
Tue, Feb. 16, 2:43 PM
- Transocean (RIG -2.2%) says it will cut up to 190 Gulf of Mexico jobs this month as it shelves two of its drillships operating in the Gulf, according to layoff notices filed with the Texas Workforce Commission.
- RIG says 130-140 of the jobs will end as it moors its Discoverer Deep Seas drill ship after it contracts was canceled last week by Murphy Oil (MUR -0.9%); the other jobs will be lost due to the lack of work for its Deepwater Champion drillship.
- Also, Pioneer Natural Resources (PXD +0.5%) says will terminate nearly 150 jobs in April, after saying last week it was largely withdrawing from Texas’ Eagle Ford for now, taking six rigs offline, and maintaining its activity mostly in the Permian Basin.
Thu, Feb. 11, 2:44 PM
- More dividend cuts and equity raises are coming for oil and gas stocks such as Apache (APA -4.3%), Devon Energy (DVN -5.1%), Encana (ECA -5.7%), Anadarko Petroleum (APC -6.2%) and Marathon Oil (MRO -5.1%), as management teams have become more willing to take stronger steps to strength balance sheets, Barclays believes.
- The firm views 4x debt to pre-interest cash flow as a warning sign that companies may have leverage concerns, at which roughly half of its energy coverage universe remains overlevered.
- Barclays thinks Canadian Natural Resource (CNQ -4.4%) likely will maintain its dividend, while Occidental Petroleum (OXY -0.8%) has the financial strength to maintain or even increase the dividend.
- The firm sees leveraged companies such as DVN, ECA and Range Resources (RRC -3%), and companies with large deficits including DVN and APC as most likely to consider raising equity; it also thinks MRO, WPX Energy (WPX -7.8%), Southwestern Energy (SWN -7.7%), Continental Resources (CLR +0.2%), Noble Energy (NBL -2%) and Newfield Exploration (NFX -1.2%) could issue equity; APA, CNQ, OXY, EOG Resources (EOG -0.9%) and Pioneer Natural Resources (PXD -0.3%) are considered unlikely to issue equity this year.
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.
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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