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Pioneer Natural Beats on Q3 Earnings on Higher Production - Analyst Blog

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Pioneer Natural Resources Company ( PXD ) reported strong third-quarter 2014 results owing to significant higher production - which was favored by a robust drilling program in the Spraberry field and Wolfcamp Shale.

The company's adjusted earnings per share came in at $1.35, beating the Zacks Consensus Estimate of $1.25. The results also marked an increase from the year-earlier adjusted income of $1.26 per share.

Pioneer Natural Resources Company - Earnings Surprise | FindTheBest

Revenues and other income jumped almost 88% year over year to $1,513 million from $807 million and surpassed the Zacks Consensus Estimate of $1,007 million.

Despite the strong third-quarter results, Pioneer Natural Resources share price slid more than 2% in after market trade on the NYSE.

Production

Total production in the reported quarter averaged approximately 186.1 thousand barrels of oil equivalent per day (MBOE/d), up 22% year over year. The growth was attributable to robust drilling program in core growth assets - Spraberry field and Wolfcamp Shale.

Oil production averaged 88.9 thousand barrels per day (MBbl/d), improving more than 31% year over year. Natural gas liquids (NGLs) production surged 26% year over year to 39.8 MBbl/d. Natural gas production increased to 343.7 million cubic feet per day (MMcf/d) from the year-ago level of approximately 320.9 MMcf/d.

Price Realization

On an oil equivalent basis, the average realized price was $56.51 per barrel in the reported quarter, lower than $58.39 in the year-ago quarter. The average realized price for oil was $90.82 per barrel compared with $101.70 in third-quarter 2013.

Average natural gas price jumped 15% year over year to $3.79 per Mcf. Natural gas liquids were sold at $28.44 per barrel, down from $30.87 in the year-ago quarter.

Cash, Debt & Capex

At the end of the reported quarter, cash balance was $550 million. Long-term debt was $2,662 million, representing a debt-to-capitalization ratio of 23% (versus 28% in the preceding quarter).

Capital Outlay

The full-year budget was slightly increased to $3.4 billion. Of this, the planned drilling budget is $3.1 billion and allotted capital for vertical integration was maintained at $0.3 billion.

Fourth-Quarter Guidance

Pioneer expects production to average 200-205 MBOE/d for the fourth quarter of 2014.

Production costs are projected between $13.25 and $15.25 per BOE, and depletion, depreciation and amortization expense is anticipated to average $15 to $17 per BOE. The exploration expense guidance is $25-$35 million and the tax rate is projected at 35-40%.

Other News

Separately, Pioneer Natural Resources declared that it is planning to divest its 50.1% stake in its Eagle Ford Midstream business. The sale represents the company's plan to deploy capital toward development of oil rich resources like Spraberry and Wolfcamp resources.

The company also reported that it intends to offer 5,750,000 shares to the public. The offering will likely be closed by Nov 10, 2014.

The net proceeds will be used by the company for normal corporate activities and also for development operations in the West Texas-based Spraberry and Wolfcamp plays.

Our Take

Pioneer Natural Resources carries a Zacks Rank #3 (Hold). Meanwhile, one can look at better-ranked players in the energy sector like Petrobras Argentina SA ( PZE ), Murphy USA Inc. ( MUSA ) and Braskem S.A. ( BAK ). All these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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