Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced financial and operating results for the quarter ended September 30, 2013.
Pioneer reported third quarter net income attributable to common stockholders of $91 million, or $0.65 per diluted share (see attached schedule for a description of the net income per diluted share calculation). Without the effect of noncash derivative mark-to-market losses and other unusual items, adjusted income for the third quarter was $176 million after tax, or $1.26 per diluted share.
Third quarter and other recent highlights included:
- producing 173 thousand barrels oil equivalent per day (MBOEPD) in the third quarter, which was slightly below the Company’s third quarter guidance, primarily due to the deferral of 3 MBOEPD as a result of increased pad drilling in the Eagle Ford Shale area that caused delays in placing new wells on production; third quarter production also reflects the conveyance of 3 MBOEPD to Sinochem as part of the southern Wolfcamp joint venture transaction and the continued growth of horizontal Wolfcamp Shale production;
- forecasting full-year 2013 production growth of 14%, which reflects the delays attributable to pad drilling in the Eagle Ford Shale area and treating the expected sale of the Company’s Alaska operations as discontinued operations;
- progressing the highly successful northern horizontal Spraberry/Wolfcamp drilling program by placing on production Pioneer’s first three Wolfcamp D interval wells including (i) the E.T. O’Daniel #2H in Midland County with a 24-hour peak initial production rate of 3,156 barrels oil equivalent per day (BOEPD), representing the highest horizontal 24-hour peak initial production rate for any interval in the Midland Basin to date, and an oil content of 69%; (ii) the Hutt C #4H in Midland County with a 24-hour peak initial production rate of 2,128 BOEPD, a peak 30-day average production rate of 856 BOEPD and an oil content of 69%; and (iii) the Scharbauer Ranch #201H in Martin County with a 24-hour peak initial production rate of 1,509 BOEPD, a peak 30-day average production rate of 662 BOEPD and an oil content of 60%;
- extending the Wolfcamp D play 50 miles west of recent industry Wolfcamp D activity;
- concluding that early production data from Pioneer’s initial Wolfcamp D interval wells on its northern acreage suggests that estimated ultimate recoveries (EURs) for these wells will equal or exceed average industry Wolfcamp D results in the Midland Basin to date;
- placing on production (i) Pioneer’s third Wolfcamp B interval well in Midland County (DL Hutt C #3H), which had the highest 24-hour peak initial production rate of 2,227 BOEPD for any Wolfcamp B interval well in the Midland Basin to date, a 30-day peak average production rate of 1,087 BOEPD and an oil content of 75% and (ii) Pioneer’s second Wolfcamp B interval well in Martin County (Scharbauer Ranch #202H) with a 24-hour peak initial production rate of 979 BOEPD, a 20-day peak average production rate of 815 BOEPD and an oil content of 73%;
- concluding that production data from Pioneer’s initial Wolfcamp B and Wolfcamp A interval wells on its northern acreage suggests that EURs for these wells are expected to exceed 800 thousand barrels oil equivalent (MBOE);
- placing on production the Company’s first two Lower Spraberry Shale interval wells and its third Jo Mill Shale interval well during late October/early November in Midland and Martin counties; these wells are currently flowing back fracture stimulation water and have not yet achieved 24-hour peak initial production rates;
- reporting that Pioneer currently has 13 horizontal wells on production with three of these wells currently flowing back, seven wells awaiting completion and five wells currently drilling;
- running five horizontal rigs in the northern Spraberry/Wolfcamp area that are drilling multiple Wolfcamp, Jo Mill and Spraberry Shale interval wells in Midland, Martin, Glasscock and Andrews counties; expect to increase to 10+ rigs in early 2014;
- testing horizontal downspacing in the Giddings area of the southern Wolfcamp joint venture area from 720 feet to 480 feet; 12 new horizontal wells have been placed on production in the Upper and Lower Wolfcamp B intervals with an average 24-hour peak initial production rate of 1,016 BOEPD per well;
- downspacing horizontal wells in the liquids-rich areas of the Eagle Ford Shale from 1,000-foot spacing between wells to 500-foot spacing between wells using zipper fracture-stimulation, which added approximately 300 locations and increased well EURs by 20% compared to offset single wells; further testing of downspacing to 300-foot well spacing in the liquids-rich areas is underway, with these activities having the potential to add 300 to 400 incremental locations;
- completing Pioneer’s first successful Upper Eagle Ford Shale well with a 24-hour peak initial production rate of 1,620 BOEPD, similar to offset Lower Eagle Ford Shale wells; approximately 25% of Pioneer’s acreage is prospective for this interval;
- announcing an agreement to sell the Company’s Alaska subsidiary for $550 million, with closing expected by year end 2013; and
- decreasing Pioneer’s net debt-to-book capitalization to 21% at the end of the third quarter.
Scott D. Sheffield, Chairman and CEO, stated, “Pioneer delivered a number of significant accomplishments in the third quarter, including drilling a horizontal Wolfcamp D well that has the highest initial production rate in the Midland Basin from any interval, achieving the highest initial production rate from the horizontal Wolfcamp B interval in the Midland Basin and extending the productivity of the Wolfcamp D interval 50 miles west of recent industry Wolfcamp D activity. We also made significant steps forward in downspacing with the completion of a 12-well pilot in the southern Wolfcamp joint venture area and successfully reducing the spacing between wells in the liquids-rich area of the Eagle Ford Shale from 1,000 feet to 500 feet. Additionally, we completed our first successful horizontal well in the Upper Eagle Ford Shale and announced the sale of our Alaska asset.”
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