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Pioneer Natural (PXD) Misses on Q4 Earnings, Reserves Grow

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Pioneer Natural Resources Company (PXD - Free Report) reported fourth-quarter 2018 earnings of $1.18 per share, excluding one-time items, which failed to beat the Zacks Consensus Estimate of $1.40 and fell from the year-ago quarter’s $1.22. Lower realized prices from oil and natural gas led to the underperformance, owing to which the stock fell roughly 3% in after-hour trading.

Revenues and other income surged 75.4% year over year to $2,677 million from $1,526 million a year ago. The top line exceeded the consensus mark of $2,331 million, thanks to higher activities in the prolific Permian Basin.  

Dividend Hike

In a separate release, the company announced approvals from board of directors to double its semi-annual dividend to 32 cents per share from 16 cents. Pioneer Natural expects the dividend to be paid on Apr 12, to the stockholders of record as of Mar 29.

Production

Total production in the reported quarter averaged 319.6 thousand barrels of oil equivalent per day (MBOE/d), which improved 4.8% year over year and was in line with the Zacks Consensus Estimate. The upside can be attributed to higher activities in the Permian Basin.

Oil production averaged 199.2 thousand barrels per day (MBbl/d), up 10.8% year over year and was in line with the Zacks Consensus Estimate. Natural gas liquids (NGLs) production was almost flat with both the Zacks Consensus Estimate and the year-ago quarter figure. Natural gas production amounted to 351.2 million cubic feet per day (MMcf/d) but was down from the year-ago quarter’s 377.1 MMcf/d. The figure was flat with the Zacks Consensus Estimate.

Price Realization

On an oil equivalent basis, average realized price was $38.16 per barrel in the reported quarter compared with $38.68 a year ago. The company reported its average realized crude price at $49.80 a barrel, down from $52.81 in the December quarter of 2018.    

Average natural gas price dropped 30.8% year over year to $1.75 per thousand cubic feet (Mcf). Natural gas liquids were sold at $26.88 a barrel, up from $21.64 in the year-ago quarter.

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $825 million. Long-term debt summed $2,284 million, reflecting a debt-to-capitalization ratio of 15.9%.  

Proved Reserves Grow

As of Dec 31, 2018, Pioneer Natural’s total proved reserves were reported at 1.1 billion barrels of oil equivalent (BBOE), up from 985.4 million barrels of oil equivalent (MMBOE) as of Jan 1, 2018.

Guidance

Pioneer Natural expects production in the Permian Basin in the range of 320-335 MBOE/D through 2019. This reflects a year-over-year increase of 12% to 17%.

For the first quarter, the company projects production from the prolific play in the band of 302-317 MBOE/D.

Through 2019, the upstream energy player intends to invest capital in the range of $3.1 billion to $3.4 billion.

Zacks Rank and Key Picks

Currently, Pioneer Natural carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy space include Jones Energy Inc. (JONE - Free Report) , Golar LNG Partners LP (GMLP - Free Report) and Sunoco LP (SUN - Free Report) . Jones and Sunoco carry a Zacks Rank #2 (Buy), while Golar LNG sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Jones Energy expects 2019 earnings growth of 19% year over year.

Golar LNG delivered average positive earnings surprise of 92.8% in the preceding four quarters.

Sunoco LP pulled off average positive earnings surprise of 18.39% in the trailing four quarters.

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