Pioneer Surpasses Zacks Estimate – Analyst Blog

Pioneer Natural Resources Company (PXD) reported its first quarter results of 48 cents per share, easily beating the Zacks Consensus Estimate of 43 cents and the year-earlier quarter loss of 15 cents. Oil and gas revenue for the quarter was $507.8 million, up 38% from the year-earlier level.

 

 


Total production for the quarter averaged approximately 114.3 thousand barrels of oil equivalent per day (MBOE/d), down 8.8% year over year. Oil production averaged 31.9 thousand barrels per day (MBbl/d), down approximately 3% year over year. Natural gas production also decreased 9% to 380 million cubic feet per day (MMcf/d). Natural gas liquids production decreased 15.6% to 19.1 MBbl/d.

 

On an oil equivalent basis, average realized price was $49.35 per barrel versus $32.61 per barrel in the year-ago quarter. Average realized price for oil in the quarter was $88.74, compared with $53.10 in the first quarter of 2009. Average natural gas price was $5.30 per Mcf, up from the year-earlier level of $4.35 per Mcf.

 

At the end of the quarter, cash balance was $34.5 million. Long-term debt balance stood at $2.65 billion, representing a debt-to-capitalization ratio of 40.5%.

 

Pioneer is guiding toward a second quarter production ranging from 113 MBOE/d to 118 MBOE/d. Production costs are expected to average between $11.50 and $13.50 per BOE and depletion, depreciation and amortization (DD&A) expense is expected to average around $14.25 to $15.50 per BOE.

 

 

Based on the uptrend in oil prices and the solid hedging position, management is guiding toward $1 billion operating cash flow in 2010. Capital budget for this year is expected to be around $900 million. The company will ramp up its production activity in West Texas’ Spraberry field and will continue its successful oil development program in Alaska.

 

Pioneer is actively pursuing the development of its substantial acreage position in the Eagle Ford Shale play. We favor the stock, given its oil growth exposure, low-risk exploitation-driven growth and significant drilling potential at liquid-rich Eagle Ford.