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Pioneer's Q1 Loss Narrower than Expected, Revenues Miss

Pioneer Natural Resources CompanyPXD reported first-quarter 2015 adjusted loss of 64 cents per share, substantially narrower than the Zacks Consensus Estimate of loss of 73 cents but significantly wider than year-earlier adjusted loss of 3 cents per share in the year-earlier quarter. The underperformance was mainly due to lower price realizations.

 

Revenues and other income in the quarter plunged 21.1% year over year to $685 million from $868 million and missed the Zacks Consensus Estimate of $699 million.

Production

Total production in the reported quarter averaged approximately 221.8 thousand barrels of oil equivalent per day (MBOE/d), up 14.4% year over year. Robust yield from core growth assets, Spraberry field and Wolfcamp Shale in particular, boosted growth.

Oil production averaged 122.8 thousand barrels per day (MBbl/d), up 24.5% year over year. Natural gas liquids (NGLs) production increased 10.7% year over year to 39.2 MBbl/d. Natural gas production decreased to 358.7 million cubic feet per day (MMcf/d) from the year-ago level of 359.4 MMcf/d.

Price Realization

On an oil equivalent basis, the average realized price was $20.28 per barrel in the reported quarter as against $29.63 in the year-ago quarter. The average realized price for oil was $28.09 per barrel compared with $43.02 in first-quarter 2015.

Average natural gas price plunged 33.7% year over year to $1.79 per thousand cubic feet (Mcf). Natural gas liquids were sold at $10.33 per barrel as against $15 in the year-ago quarter.

Cash, Debt and Capex

At the end of the quarter, cash balance was $1,612.0 million. Long-term debt was $3,209.0 million, which represents a debt-to-capitalization ratio of 24.9% (as against 27.7% in the preceding quarter).

Capital Outlay

For 2016, Pioneer plans to spend $2.0 billion in total. The estimation remains unchanged from the previous quarter’s preliminary forecast in 2015. Of this, the company has planned drilling capex of $1.85 billion and capital for vertical integration of $150 million.

An amount of $1,710 million has been allocated for the northern Spraberry/Wolfcamp area and $60 million has been set aside for the southern Wolfcamp joint venture. The company will also spend $60 million for Eagle Ford Shale and $20 million for other assets.

Guidance

Pioneer expects production to average between 224 MBOE/d and 229 MBOE/d in the second quarter of 2016.

Production costs are anticipated between $9 per BOE and $11 per BOE. Depletion, depreciation and amortization expenses are expected to average between $17.50 per BOE and $19.50 per BOE. The projected range for general and administrative expenses is $75–$80 million, for interest expenses is $55–$60 million and for other expenses is $65–$75 million. The company estimates exploration and abandonment expenses in the range of $20–$30 million, while the expected tax rate is 35–40%.  

Ranks

Pioneer currently carries a Zacks Rank #3 (Hold).

Some better-ranked players from the energy sector areVanguard Natural Resources, LLC VNR, SunCoke Energy Inc. SXC and PetroChina Co. Ltd. PTR. All these stocks sport a Zacks Rank #1 (Strong Buy).


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PETROCHINA ADR (PTR): Free Stock Analysis Report
 
PIONEER NAT RES (PXD): Free Stock Analysis Report
 
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SUNCOKE ENERGY (SXC): Free Stock Analysis Report
 
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