Current PXD Stock Info

Version 3.0+ testing future completion designs – ability to swing water is a ‘huge game changer’
Pioneer Natural Resources (ticker: PXD) announced second quarter results today, showing net income of $223 million, or $1.36 per share. These results significantly exceed the company’s losses in both Q1 2017 and Q2 2016 of ($42 million) and ($268 million), respectively.

Pioneer produced 259 MBOEPD in Q2, up 4% from the 249 MBOEPD produced in Q1. This growth was primarily driven by Pioneer’s Spraberry/Wolfcamp properties, which grew by 12 MBOEPD ...

Analyst Commentary

From BMO Capital Markets:
Bottom Line: Pioneer's 2Q results disappointed on lower-than-expected oil production and reduced 2017 guidance attributed to completion delays/deferrals and higher GORs in the Permian. While we expect investor concern around asset performance, Pioneer noted oil decline rates are in line with expectations. We compared (Exhibit 1) oil and gas decline rates across shale plays and show Midland Basin (and Pioneer) oil declines in line with averages, while gas is much shallower, supporting Pioneer's assertion.
2Q EPS above, but oil below expectations. Pioneer reported 2Q17 EPS of $0.21, above our/consensus $0.09/$0.12. Production of 259MBoe/d was in line with our/consensus 257/259MBoe/d and at the high end of guidance (254-259MBoe/d). That said, oil of 147MBo/d missed our/consensus 153/154MBo/d, while gas/NGLs beat. Pioneer POP'ed 61 HZs in 2Q, in line with guidance (60-65 wells), but 33 were in June (Pioneer noted 2Q POPs would be back-end weighted). That said, 3Q guidance of 274-279MBoe/d also missed our/consensus 282MBoe/d with only 55-60 POPs (vs. ~80 guided) planned. Jo Mill results remain strong, while Pioneer noted continued V 3.0 improvements (vs. V 2.0) and V 3.0+ (9 wells) outperformance is more clear on a lateral-adjusted basis. Eagle Ford enhanced completions (four wells) are also up >20% after 50 days, although other Eagle Ford operators have experienced inconsistent results. Capex of $644mm was below our $689mm but above consensus of $633mm.
2017 oil cut on completion deferrals. Lower-than-expected oil in 1H17 and the deferral of 30 HZs into 2018 due to drilling delays are resulting in a 7% reduction in 2017 oil guidance (17-18% Y/Y oil growth vs. 24-28%), with the oil mix now 58% (vs. 60%). Total production in 2017 is trimmed by 86 bps (15-16% vs. 15-18% growth) as shallower natural gas decline rates boost GORs. Despite completion deferrals, 2017 capex is trimmed to only $2.3Bn from $2.4Bn, likely due to higher D&C (Wolfcamp B $8.8mm vs. $8.5mm, Wolfcamp A $7.8mm vs. $7.5mm, Spraberry $7.5mm vs. $7.2mm). EURs increase (higher GORs) for Wolfcamp B (1.7 vs. 1.5MMBoe) and Wolfcamp A (1.3 vs. 1.2MMBoe), and we expect investors to look past this. Pioneer noted approximately 50% of 2018 oil is hedged, implying ~197MBo/d (vs. consensus 2017MBo/d), and for what it's worth, the 10-year oil target is unchanged (gas/NGL higher).  

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