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Pioneer Natural Resources’ Guidance and Strategies for 2Q16

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Pioneer Natural Resources’ production guidance for 2Q16

For 2Q16, Pioneer Natural Resources (PXD) expects total production of 224–229 Mboe (thousand barrels of oil equivalent) per day. The midpoint of the 2Q16 production guidance is 226.5 Mboe per day, which is ~15% higher than ~196.6 Mboe per day in 2Q15. Sequentially, the company’s production guidance is ~2% higher than 1Q16.

Pioneer Natural Resources expects most of its 2Q16 production to come from the Spraberry/Wolfcamp areas of the Permian Basin.

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Pioneer Natural Resources’ production guidance for 2016

In April 2016, PXD increased its 2016 production growth guidance due to improving Spraberry/Wolfcamp well productivity. For 2016, the company now expects a production growth of ~12%, which is higher than its previous production growth guidance of ~10%.

In June, 2016, in response to higher crude oil prices, Pioneer Natural Resources announced it will increase its horizontal rig count by five rigs, from 12 to 17, in the northern Spraberry/Wolfcamp area. But the increased rig count won’t have any impact on Pioneer Natural Resources’ 2016 production guidance since initial production from these five additional rigs is expected in early 2017.

For details on how the addition of rigs will affect PXD’s 2017 production, please refer to the Market Realist series Behind the Scenes with Pioneer Natural Resources.

Other upstream players

EP Energy (EPE), Diamondback Energy (FANG), Energen (EGN), Approach Resources (AREX), and Clayton Williams Energy (CWEI) also operate in the Permian Basin. They also have higher percentages of crude oil in their production mixes.

The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies.

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