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Pioneer Natural (PXD) Q2 Earnings Top on Increased Drilling

Leading upstream energy company Pioneer Natural Resources CompanyPXD reported second-quarter 2017 earnings of 21 cents per share, excluding one-time items. The bottom line surpassed the Zacks Consensus Estimate of 11 cents per share. Notably, the company had incurred adjusted loss of 22 cents per share in the year-earlier quarter.

Revenues and other income in the quarter surged 107.4% year over year to $1,630 million from $786 million. The top line also beat the Zacks Consensus Estimate of $1,309 million.

Significantly high commodity price realizations along with the Spraberry/Wolfcamp horizontal drilling program resulted in the strong quarterly performance.

Production

Total production in the reported quarter averaged 259.1 thousand barrels of oil equivalent per day (MBOE/d), up 12% year over year. The Spraberry/Wolfcamp horizontal drilling program of the company led to the outperformance.

Oil production averaged 146.9 thousand barrels per day (MBbl/d), up 9% year over year. Natural gas liquids (NGLs) production jumped 29.4% year over year to 53.3 MBbl/d. Natural gas productions increased to 353.6 million cubic feet per day (MMcf/d) from the year-ago level of 340.5 MMcf/d.

Price Realization

On an oil equivalent basis, average realized price was $32.56 per barrel in the reported quarter as compared with $28.95 a year ago. The average realized price for oil was $45 a barrel compared with $41.43 in second-quarter 2016.

Average natural gas price surged 56.8% year over year to $2.62 per thousand cubic feet (Mcf). Natural gas liquids were sold at $16.91 a barrel versus $14.21 in the year-ago quarter.

Cash, Debt and Capex

At the end of the quarter under review, cash balance was $660 million. Long-term debt totaled $2,281 million, reflecting a debt-to-capitalization ratio of 20.5%.

Guidance

For 2017, Pioneer intends to spend $2.7 billion, lower than the prior projection of $2.8 billion. Of this, it has planned drilling and completion capex of $2.4 billion and spending budget for water infrastructure, vertical integration and field facilities of $275 million.

Pioneer expects production in the range of 274 MBOE/d to 279 MBOE/d for the third quarter of 2017.

Share Performance

Pioneer Natural has lost 14.3% during the April-to-June quarter of this year versus the 16.9% decline of its industry .

Zacks Rank & Stocks to Consider

Currently, Pioneer Natural carries a Zacks Rank #4 (Sell). A few better-ranked players in the energy sector are TransCanada Corporation TRP , Range Resources Corporation RRC and Pembina Pipeline Corporation PBA . TransCanada and Range Resources sport a Zacks Rank #1 (Strong Buy), while Pembina Pipeline carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

TransCanada posted average positive earnings surprise of 4.06% over the last four quarters.

Range Resources' 2017 earnings are projected to grow almost 116%.

Pembina Pipeline's 2017 earnings are estimated to grow more than 90%.

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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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