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Analyst Blog

Pioneer Natural Resources Company (PXD - Analyst Report) reported fourth quarter 2013 adjusted earnings of $1.00 per share, missing the Zacks Consensus Estimate by a penny. However, the results increased from the year-earlier adjusted income of 83 cents per share. The growth was mainly backed by higher price realization.

Revenues and other income in the quarter increased 21.8% year over year to $970.8 million from $797.0 million and beat the Zacks Consensus Estimate of $929.0 million.

For the full year, total revenue increased about 21% to $3,719.5 million from the year-ago level of $3,072.5 million.

Production

Total production in the reported quarter averaged approximately 164.2 thousand barrels of oil equivalent per day (MBOE/d), up 8.3% year over year. The growth was attributable to robust yield in core growth assets – Spraberry field, Wolfcamp Shale and Eagle Ford Shale.

Oil production averaged 72 thousand barrels per day (MBbl/d), showing an improvement of 17.5% year over year. Natural gas liquids (NGLs) production surged 20.2% year over year to 34.4 MBbl/d. Natural gas production decreased to 346.1 million cubic feet per day (MMcf/d) from the year-ago level of approximately 369.6 MMcf/d.

For full-year 2013, total production was 161.5 MBOE/d versus 143.9 MBOE/d in the year earlier period.

Price Realization

On an oil equivalent basis, the average realized price was $53.60 per barrel in the reported quarter versus $48.34 in the year-ago quarter. The average realized price for oil was $90.88 per barrel compared with $85.52 in fourth quarter 2012.

Average natural gas price increased 7.2% year over year to $3.44 per Mcf. Natural gas liquids were sold at $30.71 per barrel, down from $31.13 in the year-ago quarter.

Cash, Debt & Capex

At the end of the quarter, cash balance was $392.6 million. Long-term debt was $2,653.1 million, representing a debt-to-capitalization ratio of 28.6% (versus 26.9% in the preceding quarter).

Capital Outlay

For 2014, Pioneer plans to spend $3.3 billion in total. Of this, the company has planned drilling capex of $3 billion and capital for vertical integration of $0.3 billion.

An amount of $2.2 million has been allocated for the northern Spraberry/Wolfcamp area, $205 million has been set aside for the southern Wolfcamp joint venture area, $545 million for Eagle Ford shale and $100 million or other assets.

Guidance

Pioneer expects production to average 166–171 MBOE/d for the first quarter of 2014.

Production costs are expected between $13.50 and $15.50 per BOE, and depletion, depreciation and amortization expense is expected to average $13.50 to $15.50 per BOE. The projected range is $70–$75 million for general and administrative expense, $44–$49 million for interest expense and $25–$35 million for other expenses. Exploration and abandonment expense guidance is $25–$35 million while the expected tax rate is 35–40%.  

Ranks

Pioneer carries a Zacks Rank #3 (Hold). However, there are Zacks Ranked #1 (Strong Buy) stocks in the oil and gas industry like Helmerich & Payne, Inc. (HP - Analyst Report), Swift Energy Co. (SFY - Snapshot Report) and Cabot Oil & Gas Corporation (COG - Analyst Report) that appear attractive for the short term.

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