WHERE were they 3 yrs ago? No one wrote about PXD then. This stock needs to split 3 for 1 to be acceptable, but at least they have good earnings.
Time to buy some protective options. They report May 6. Personally, I don't understand the current valuation. Yes, the Texas oil future looks bright, but the share price seems to reflect perfection.
If you are long, I suggest selling the Apr 200 calls and buying the April 190 puts. Net credit should be about $6.50. You can close the options after the qtr report.
Are you new to PXD? If so, for future reference, PXD sells off on just about anything - cloudy weather in Midland....whatever. The good news though is that it also jumps the same way. On a serious note, it's volatile with a 1.85 beta - and the market is selling off. It too will come back. Good luck.
The $3.3 billion being spent on drilling this yr has spooked some folks. To me its a sign that management is confident in their position.
Technocratic, Savvy Permian Player's New Moves: RSP Permian
Apr. 3, 2014 12:13 PM ET | 3 comments | About: RSPP, Includes: CPE, FANG, KWK, LPI, PXD
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
New Permian Basin player RSP Permian has realized its estimated target price already, with room yet for growth given new Midland Basin reserve estimates.
Midland Basin reserves were raised from 50 billion boe to 75 billion recently; the play is RSP Permian's focal area of operation.
RSP Permian's technocratic and strategic vision is a fresh approach in an evolving shale oil saga; strategic acquisitions, carefully identified, are a smart way to grow.
RSP Permian (RSPP), a recent IPO, is a pure-play exploration and production firm owning 33,933 net acres exclusively in the Permian Basin's prolific Midland Basin. This makes RSP Permian's relative acreage holdings closer to Callon Petroleum (CPE) (35,000 net acres), Quicksilver Resources (KWK) (37,000 net acres) and WTI, with 25,730 acres, or half of Diamondback (FANG) at 66,000 net acres. All of RSP's acreage is located in Tier 1 Wolfcamp prospectivity per Pioneer Natural Resources' (PXD) year-end assessment, a high quality area. They have 52.2 million of proved reserves (BOE) with 81% liquids (62% oil). Net production in the third quarter 2013 was 8,155 boe/d. For many Permian producers, fourth quarter production took a hit from bad weather.
They are saying 75 billion instead of 50 billion barrels of oil. you just don't know.
Revolution Winner #2: Balance Sheet Behemoths
It sounds obvious, but the second type of winner will be companies that not only have their costs in order, but are also growing revenue and profits.
Many drillers that lose money getting oil and gas out of the ground are simply absorbing these losses. That’s because costs for early startup, land acquisition, energy, labor and equipment are fiercely high at the early stages.
Some estimates peg startup costs at $1.50 for every $1 in revenue.
See the problem? That business model isn’t going to last long. And it’s playing out in the profits for some of the bigger players.
For example, Pioneer Natural Resources (PXD), one of the premier companies that got into the shale business early, has produced record amounts of oil and has shown massive revenue growth. In 2012, it notched $3.2 billion in revenue. In 2013, that number jumped to $3.7 billion. But operating income fell, largely due to the huge capital investments.
It will likely recoup those costs going forward, but it’s a stark reminder that the costs for finding unconventional, hard-to-get oil are very high. If they weren’t, Alaska would have shut its doors years ago.
While traders were obsessing over the lack of stock market action in the first quarter, the price of West Texas Intermediate Crude moved over $100 a barrel. It’s a meaningful breakout for black gold which hadn’t found a firm foothold in the triple digits since the third quarter of last year.
Optimists would think the global tensions in Ukraine and the absurdity that was last winter would have trumped Summer Driving Season’s annual increase in the rise of crude. Colorful CME trader Tres Knippa thinks crude is a raging buy at $100.
“There’s been tension in the Middle East since the earth cooled,” Knippa observes in the attached clip, “so I’m kind of counting on that to continue.” As for the much vaunted glut of WTI in the U.S., Knippa sees little evidence of any such thing exists in the pits. “The glut is simply not there and whoever’s models are anticipating that I’d have to disagree with them.”
If the above freaks you out you’re better off not hearing Knippa’s price targets. He says crude could be approaching $125 or $130 without any outside help. A little uptick in the Middle East would bring $150 into play and the previously unthinkable $200 level is a possibility if the world really comes unhinged.
He’s loathe to put a timing target on the uptick but he’s more than happy waiting it out while crude bubbles. Until he sees a reversal in premiums being paid in the commodity pit, Knippa’s confident we’ve seen the last of WTI crude in the $80s.
Pioneer Resources, Apache, and Concho Resources comprise the top three producers in the Spraberry/Wolfcamp field. They lead the pack in average daily production there, which is a wise move given the tantalizing potential.
Pioneer's Permian position represents a core asset for Pioneer, since it operates 35 rigs there, 24 of which are horizontal and 11 vertical. Pioneer's average production stands at 93,000 barrels of oil equivalents per day. That makes Pioneer the largest producer at the Spraberry/Wolfcamp development. And, since its production from this field represented 58% of its total production last year, it's clear how important the area is to Pioneer.
For its part, Apache produces 51,000 barrels of oil equivalents per day from Spraberry/Wolfcamp, approximately 10% of its total production. Apache has taken drastic steps to restructure its portfolio toward higher-margin liquids and North American onshore production more broadly. In 2009, Apache derived 50% of its production from liquids, and in terms of geographic focus, only generated 10% of its production from the Permian Basin. Last year, those figures were 58% liquids and 23% of production from the Permian Basin.
Concho's average production stands at 37,000 barrels per day from the Spraberry/Wolfcamp field. Concho operates almost exclusively in the Permian Basin, and its success there resulted in a 20% increase in oil-weighted production from continuing operations last year.
She is rebounding nice today and hopefully the markets will turn soon..
Sentiment: Strong Buy
I disagree... This is following a perfect fibonacci 50% retrace theory and it is on its second leg of it. Look for new highs over the next 2 months. jmho
Sentiment: Strong Buy
110 to 225 back to 165 to 204 back to 182 and now has made its reversal again after a double bottom of 165! It looks like she will make new highs from here. jmho
Sentiment: Strong Buy