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PXD Misses Earnings, Beats Rev

Zacks Equity Research

Pioneer Natural Resources Company (PXD) reported second quarter 2013 adjusted earnings of $1.10 per share, missing the Zacks Consensus Estimate of $1.12. However, the earnings increased from the year-earlier adjusted income of 78 cents per share. The growth was mainly backed by higher price realization.

Revenues and other income in the quarter increased 28.7% year over year to $1,181.7 million from $918.0 million, and comfortably surpassed the Zacks Consensus Estimate of $898.0 million.


Total production in the reported quarter averaged approximately 176.2 thousand barrels of oil equivalent per day (MBOE/d), up 17.1% year over year. The growth was attributable to robust yield in core growth assets – Spraberry field, Wolfcamp Shale and Eagle Ford Shale.

Oil production averaged 75.1 thousand barrels per day (MBbl/d), showing a significant improvement of 22.2% year over year. Natural gas liquids (NGLs) production surged 27.7% year over year to 34.4 MBbl/d. Natural gas production increased to 400.3 million cubic feet per day (MMcf/d) from the year-ago level of approximately 372.7 MMcf/d.

Price Realization

On an oil equivalent basis, the average realized price was $52.71 per barrel in the reported quarter versus $46.86 in the year-ago quarter. The average realized price for oil was $90.82 per barrel compared with $88.32 in second quarter 2012.

Average natural gas price jumped 87% year over year to $3.74 per Mcf. Natural gas liquids were sold at $28.19 per barrel, down from $32.62 in the year-ago quarter.

Cash, Debt & Capex

At the end of the quarter, cash balance was $695.6 million. Long-term debt was $2,823.4 million, representing a debt-to-capitalization ratio of 27.0% (versus 29.3% in the preceding quarter).

Capital Outlay

In 2013, Pioneer plans to spend $3.0 billion in total. Of this, planned drilling capex is $2.75 billion and capital for vertical integration is $0.24 billion.

During the quarter, an amount of $717 million was spent on drilling.

Third Quarter Guidance

Pioneer expects production to average 174–179 MBOE/d for the third quarter of 2013.

Production costs are expected between $14.00 and $16.00 per BOE, and depletion, depreciation and amortization expense is expected to average $14.50 to $16.50 per BOE. The exploration expense guidance is $25–$35 million and the tax rate is expected at 35–40%.

Our Take

Pioneer carries a Zacks Rank #3 (short-term Hold rating). However, there are other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas industry like Range Resources Corporation (RRC), Gulfmark Offshore, Inc. (GLF) and Dril-Quip, Inc. (DRQ) that appear attractive in the short term.

Read the Full Research Report on RRC

Read the Full Research Report on PXD

Read the Full Research Report on DRQ

Read the Full Research Report on GLF

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