What Is Pioneer Natural Resources’ Production Guidance for 1Q16?



Pioneer Natural Resources’ production guidance

For 1Q16, Pioneer Natural Resources (PXD) expects total production in a range of 211,000–216,000 boepd (barrels of oil equivalent per day). The midpoint of the company’s 1Q16 production guidance is 213,500 boepd, which is ~10% higher when compared with 1Q15. Sequentially, PXD’s 1Q16 production guidance is lower by ~1%, when compared with 4Q15.

For 2016, Pioneer Natural Resources expects total production growth of ~10%. In 2015, Pioneer Natural Resources’ production was ~204,000 boepd. PXD expects continued production growth over the next three years, from 2016 to 2018, but its production CAGR (compounded annual growth rate) will depend on the pace of crude oil’s (USO) (UWTI) (DWTI) and natural gas’s (UNG) (UGAZ) (DGAZ) price recovery.

Among the other S&P 500 (SPY) upstream companies, EQT Corporation (EQT) and Occidental Petroleum (OXY) have reported respective ~13% and ~10% year-over-year increases in their 4Q15 total production numbers.

Apache Corporation (APA) has reported an ~9% year-over-year decline in its 4Q15 production. The SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies.

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Pioneer Natural Resources’ production costs

For 1Q16, Pioneer Natural Resources (PXD) expects its total cash costs to range from $10.50–$12.50 per boe. This includes LOE (lease operating expenses), natural gas processing expenses, third-party transportation expenses, production and ad valorem taxes, and workovers.

For 1Q16, Pioneer Natural Resources expects DD&A (depreciation, depletion, and amortization) expenses in the range of $18.50–$20.50 per boe, as well as exploration and abandonment expenses in the range of $20 million–$30 million.

PXD’s capex plans

Due to a planned reduction in drilling activity, Pioneer Natural Resources revised its 2016 capex guidance to ~$2 billion, a midpoint reduction of ~20% from its previous capex guidance range of $2.4 billion–$2.6 billion. In 2015, PXD spent ~$2.2 billion in capex, which was ~39% lower when compared with 2014.


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