Pioneer Natural Resources Company PXD has recently reported that it has agreed to divest around 10,200 net acres from its Eagle Ford Shale's western part to Sundance Energy, Inc., a subsidiary of Sundance Energy Australia Limited SNDE.
Pioneer will receive $102 million for the acreage, positioned in four counties in the state of Texas. Per the company, net production from the assets at present is around 1,100 barrels of oil equivalent per day. The deal is expected to be closed by the second quarter of 2018.
Divestment Rationale
The sale is in line with the company's strategy to divest its assets in order to focus more on the Permian Basin. The company plans to follow the scheme and sell off the rest of its Eagle Ford Shale assets. Moreover, Pioneer has plans to open data rooms for the divestments in the first quarter of 2018. Notably, the divestment will leave the company with about 59,000 net core acres in the Eagle Ford Shale.
Additionally, the company anticipates its divestment-strategy and pure Permian view to enable it to reduce operating expense per barrel of oil equivalent (BOE) as well as increase revenues per BOE. Also, the company will use proceeds from the divestments to fund its 2018 capital program.
Moreover, based on the company's projected proceeds from its divestment activities, it has raised the semiannual per share dividend from $0.04 to $0.16 or $0.32 per share on an annualized basis on Feb 6, 2018.
Price Performance
Irving, TX-based Pioneer, an independent oil and gas exploration and production company, has lost 2.7% in a year, narrower than the 6.3% decline of the industry it belongs to.
Zacks Rank and Other Stocks to Consider
Pioneer sports a Zacks Rank #1 (Strong Buy). Other two top-ranked stocks in the oil and energy sector are EOG Resources, Inc. EOG and Continental Resources, Inc. CLR, both carrying the same bullish Zacks Rank of 1 as Pioneer. You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based EOG Resources is an upstream energy player. Its earnings for 2018 are anticipated to skyrocket 281.3% year over year. The company delivered an average positive earnings surprise of 25.7% in the trailing four quarters.
Oklahoma City, OK-based Continental Resources is an oil and gas exploration and production company. Its revenues for first-quarter 2018 are estimated to soar 54.9% from the year-ago quarter’s figure. For 2018, the bottom line is likely to be up 364.7%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 – 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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
Be the first to comment