Pioneer Natural Resources $PXD shares were crushed 7.5% after they said they were behind in completions and would not accelerate activity. This left forward guidance lower and questionable.
Pioneer Natural Resources $PXD shares were crushed 7.5% despite reporting better than expected earnings. Production rose 11 percent to 259,087 barrels of oil equivalent per day. What spooked the market was the company said they were behind in completions and would not accelerate activity. This left forward guidance lower and questionable.
Pioneer is one of the largest oil producers in the Permian Basin and is being conservative in a low oil price environment. Pioneer now plans to spend $2.7 billion this year, $100 million less, and said 2017 production would be at the low end of the previously forecast range of 15 percent to 18 percent increase.
Earnings: Adjusted EPS of 21 cents on revenue of $1.63 billion. Beating estimates of EPS of 11 cents per share. Swinging from a loss of 22 cents a share in the year-ago quarter. Revenue was expected at $1.31 billion.
Reaction: Pioneer Natural Resources NYSE: PXD After-hours: 150.75 –12.52 (-7.67%)
The 2017 capital budget was reduced to $2.7 billion from $2.8 billion as 30 well completions were deferred into 2018 from 2017.
CEO Timothy Dove in a statement. “Operationally, we fell behind on our completions due to unforeseen drilling delays. To maintain efficient operations, we have chosen not to accelerate activity in order to catch up in the second half, especially in light of the current commodity price environment.”
“This decision is consistent with our longer-term objective to grow production efficiently by maintaining a steady pace of activity, spending within cash flow, maintaining a strong balance sheet and improving corporate returns,” Dove added.
Source: Pioneer Natural Resources
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