uploads///PXD Q Cash Flows

Pioneer Natural Resources’ Free Cash Flow: How Does It Compare?

Nicholas Chapman - Author

Aug. 18 2020, Updated 5:35 a.m. ET

PXD’s revenues and operating cash flows

In 4Q15, Pioneer Natural Resources’ (PXD) total operating revenue was ~$1.1 billion, ~36% lower than its operating revenue in 4Q14. The lower operating revenue in 4Q15 was the direct result of lower realized prices for crude oil and natural gas production.

In 4Q15, PXD reported an OCF (operating cash flow) of ~$459 million, which was ~19% lower than its OCF of ~$568 million in 4Q14. The drop was primarily due to the lower revenues reported in the same period, as discussed above.

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Pioneer Natural Resources’ free cash flow trend

As shown in the above chart, PXD reported a negative FCF (free cash flow) in 2015. In 4Q15, PXD reported an FCF of approximately -$173 million. Due to the steep downward trend in energy prices, most S&P 500 (SPY) energy companies reported negative FCFs. Hess (HES), Apache (APA), ConocoPhillips (COP), and Occidental Petroleum (OXY) reported FCFs of -$312 million (or -$1.1 per share), -$705 million (or -$1.87 per share), -$541 million (or -$0.44 per share), and -$224 million (or -$0.30 per share), respectively, in 4Q15.

FCF helps a company to enhance shareholder value, and can be used to pay dividends, buy back stock, or repay debt. FCF is calculated by subtracting capital expenditures from OCF.

PXD’s capex

In 2015, PXD spent ~$2.2 billion in capex, which followed its 2015 capex guidance and was ~39% lower than its capex in 2014. Due to a planned reduction in drilling activity, PXD revised its 2016 capex guidance to ~$2 billion, a mid-point reduction of ~20% from its previous capex guidance range of $2.4 billion–$2.6 billion.


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