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Pioneer's Q4 Output Hit by Weather

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Pioneer Natural Resources Company (PXD - Free Report) reported that its fourth quarter 2013 production was hurt by severe winter in Texas.

Pioneer’s fourth quarter production averaged 173 thousand barrels oil equivalent per day (Mboe/d). This figure does not include volumes from Alaska operations as it will be reflected as discontinued operations in the fourth quarter release.

The company estimates a 6 Mboe/d reduction in fourth quarter production of which, around 5 Mboe/d was due to heavy icing and low temperatures across Pioneer’s leasehold position in the Spraberry/Wolfcamp area. The severe weather resulted in widespread power disruptions, facility freeze-ups, trucking curtailment and restricted access to production and drilling facilities.

Pioneer’s Midkiff area suffered the most from the weather disruption. More than 1,000 utility poles, 900 transformers and 1,000 miles of power lines were damaged in the region. These had to be restored by the utility providers serving this area between late November and early January.

More than 50% of Pioneer’s 7,000 plus wells in the Spraberry/Wolfcamp area were closed when the severe weather first transpired in late November. However, all of the affected wells have returned to production and the company does not foresee any adverse effects on future well performance due to the downtime.

Currently, the company’s drilling and completion operations have returned to normal. This includes Pioneer’s horizontal drilling program that at present has 8 rigs operating in the southern Wolfcamp joint venture area and 9 rigs operating across the company’s northern acreage. Pioneer projects over 10 rigs operating on its northern acreage by the end of first quarter 2014.

The remaining cut in production in the fourth quarter was as a result of facility freeze-ups in Pioneer’s Eagle Ford Shale, Barnett Shale Combo and West Panhandle areas. Operations in these areas have also come back to normal.

Pioneer carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include NGL Energy Partners L.P. (NGL - Free Report) , Cheniere Energy Partners L.P. (CQP - Free Report) and Pembina Pipeline Corporation (PBA - Free Report) . All these stocks hold a Zacks Rank #1 (Strong Buy).

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