Back to top

Analyst Blog

 Oil and gas company Pioneer Natural Resources Company (PXD - Analyst Report) announced the divestment of its Alaska subsidiary to Caelus Energy Alaska LLC for cash proceeds of $300 million. The company expects to recognize a non-cash loss of about $30 million associated with the sale when it reports earnings for the first quarter of 2014.

Pioneer Natural Resources is a large independent oil and gas exploration and production company, headquartered in Dallas, TX with operations in the U.S. The company’s oil-weighted reserves base and large drilling inventory (over 20,000 liquids rich drilling locations in low-risk resource plays) with significant resource potential are catalysts to unlock value for shareholders. The company offers a deep inventory of high-return, liquids-leveraged drilling opportunities.

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 for other assets.

However, the company’s long-term production and reserve growth depends to a certain extent on its acquire-and-exploit mode. Pioneer might therefore find it difficult to complete accretive transactions in the future, which could negatively impact its growth rate.

Pioneer Natural Resources currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players in the energy sector like Flotek Industries Inc. (FTK - Snapshot Report), Helmerich & Payne Inc. (HP - Analyst Report) and Exterran Holdings, Inc. (EXH - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).
 

Read the Full Research Report on PXD
Read the Full Research Report on HP
Read the Full Research Report on EXH
Read the Full Research Report on FTK


Zacks Investment Research

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%