Pioneer Natural Resources Company (PXD) announced that it would redeem its Convertible Senior Notes due 2038 with a coupon rate of 2.875%. The company has given a notice to the holders that the redemption would be done on May 16, 2013. The redemption price of the Notes would be equal to 100% of the aggregate principal amount of the Notes along with accrued but unpaid interest prior to the Redemption Date.
Pioneer Natural Resources as of Apr 12, 2013, had $198 million of aggregate principal amount of Notes outstanding. However, this does not include an aggregate principal amount of $20 million of Notes. The holders of these Notes have decided to convert their securities, pending settlements.
Pioneer Natural Resources is a large independent oil and gas exploration and production company, headquartered in Dallas, Tex., with operations in the U.S. The company’s oil-weighted reserves base and large drilling inventory (over 20,000 liquids rich drilling locations in low-risk resource plays) with significant resource potential are catalysts to unlock value for shareholders. The company offers a deep inventory of high-return, liquids-leveraged drilling opportunities.
The company has estimated its 2013 production growth in the range of 38 thousand barrels of oil equivalent (MBoe) per day to 42 MBoe per day, reflecting an increase of 36% to 50% from the 2012 levels.
However, the company’s long-term production and reserve growth depends on its acquire-and-exploit model, to a certain extent. Pioneer may therefore find it difficult to complete accretive transactions in the future, which could negatively impact its growth rate.
Pioneer Natural Resources’ is scheduled to release its first quarter 2013 earnings results on May 1 after the closing bell. The Zacks Consensus Estimate for the first quarter is pegged at 99 cents, representing a year-over-year decrease of 19.7%.
Pioneer Natural Resources’ currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in-line with the broader U.S. equity market over the next one to three months. However, there are other companies in the energy sector that are expected to significantly outperform the equity markets in the next one to three months. These include the Zacks Rank #1 (Strong Buy) stocks of EPL Oil & Gas, Inc. (EPL), Midstates Petroleum Company, Inc. (MPO), and Calumet Specialty Products Partners LP (CLMT).
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