U.S. Markets open in 7 hrs 33 mins

Pioneer to Shut Brady Sand Mines, Alter Supply to West Texas

HC2 Holdings has been struggling lately, but the selling pressure may be coming to an end soon.

Pioneer Natural Resources Company PXD announced that it will shut sand mine located in Brady, TX and alter proppant supply to West Texas sand sources.

Operations at the sand mine in Brady is expected to be shut by the first quarter of 2019. Also, the company will shift to 100% West Texas sand by May 2019. Based on full utilization of West Texas sand, Pioneer Natural anticipates sand savings of about $400,000 per well. The company expects to recognize a noncash after-tax charge of $350-$400 million in the fourth quarter, related to mines shut down.

The new West Texas sand mines include low cost of mining and are close to the company’s Permian acreage position. The mines provide Pioneer Natural with lucrative and long-term source of sand supply. The transition is expected to lower costs, enhance capital efficiencies and benefit corporate returns.

Pioneer Natural is an independent oil and gas exploration as well as production company. Its asset base is anchored by the Spraberry oil field located in West Texas and the Hugoton gas field in Southwest Kansas. Along with these areas, the company has exploration and development opportunities and/or oil and gas production activities in the United States as well as offshore South Africa.

Pioneer Natural focuses on the Permian Basin, which is among the prospective oil shale plays with less operation risks. The region continues to experience improvement in production even with lower investment.  Moreover, the company is one of the largest acreage holder in the Midland Basin with about 200,000 gross acres in the southern Wolfcamp joint venture area.

Zacks Rank & Other Key Picks

Currently, Pioneer Natural has a Zacks Rank #2 (Buy).

A few other top-ranked players in the same sector are Hess Corporation HES, Enterprise Products Partners L.P. EPD and Energen Corporation EGN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

New York-based Hess is a global integrated energy company. The company delivered an average positive earnings surprise of 230.5% in the last four quarters.

Headquartered in Houston, TX, Enterprise Products Partners is among the leading midstream energy players in North America. It pulled off an average positive earnings surprise of 9.3% in the last four quarters.

Headquartered in Birmingham, AL, Energen is a leading oil and natural gas exploration and production company. It pulled off an average positive earnings surprise of 18.6% in the last four quarters.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Energen Corporation (EGN) : Free Stock Analysis Report
 
Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
 
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
Hess Corporation (HES) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research