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Pioneer (PXD) Predicts Slow Oil Output Recovery in US Shale

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·3 min read
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  • PXD
  • PAGP
  • DCP

Pioneer Natural Resources Company, PXD one of the largest oil producers in America’s shale patch, in no way sees a recent recovery in drilling activities in spite of Saudi Arabia’s surprise oil market pledge to cut production in an effort to lift prices.

American shale oil was one of the primary reasons the United States became the world’s leading oil producer. Notably, the company mentioned that the U.S. production of crude oil is expected to remain uniform, with an estimated output of 11 million barrels per day in the coming years. During the same time, the Eagle Ford in Texas and North Dakota’s Bakken, which are the nation’s two prolific shale regions, are unlikely to witness growth again, added the upstream energy firm.

Despite the fact that there has been a jump in U.S. crude for more than $50 a barrel since February after Saudi decided to curb the production in the next two months, Pioneer’s ongoing production plans remain unchanged. It added that even though oil touched the $100-a-barrel psychological mark and the world was running low commodity supply, it would be uneconomical to add oil and gas rigs since service costs would reduce profits. Importantly, the company expects more business integration to happen if oil stays above $50 a barrel, enabling companies to strengthen balance sheets.

Currently, Pioneer is involved in the acquisition of upstream company Parsley Energy Inc. PE. However, the door isn’t closed to other acquisition opportunities in the Permian Basin for Pioneer.

Company Profile & Price Performance

Headquartered in Irving, TX, Pioneer is a leading oil and gas exploration and production company.

Shares of the company have underperformed the industry in the past six months. The stock has gained 44.2% compared with the industry’s 65.5% growth.

 

 

Zacks Rank & Stocks to Consider

The company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Plains Group Holdings, LP PAGP, and DCP Midstream Partners, LP DCP, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Plains Group and DCP Midstream are likely to see earnings growth of 194.8% and 205.2%, respectively, in 2021.

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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
Parsley Energy, Inc. (PE) : Free Stock Analysis Report
 
Plains Group Holdings, L.P. (PAGP) : Free Stock Analysis Report
 
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
 
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