The shares of independent oil and gas exploration and production (E&P) company, Pioneer Natural Resources Company (PXD) soared to a 52-week high of $147.99 on Thursday, Jun 13, 2013, buoyed by a slew of positive developments. The closing price of the Irving, Texas-based company on Jun 13, 2013, was $146.95, representing a solid 1-year return of 66.67% and an impressive year-to-date return of about 33.90%. Additionally, Pioneer – with a market cap of $20.07 billion – boasts a long-term expected earnings growth rate of 15.54%.
Last month, Pioneer reported first quarter 2013 adjusted earnings per share of $1.02, below the year-ago adjusted earnings of $1.23. But its revenues improved 6% year over year to $831.6 million. This was aided by strong average natural gas price realization, which grew 25.1% to $3.14 per Mcf from the year-earlier level.
Earlier this month, Pioneers’ first horizontal Wolfcamp Shale well – Mabee K #1H – in Martin County, Texas commenced production. A 27-stage hybrid fracture stimulation over the well’s perforated lateral length of 6,671 feet was used to complete the Mabee K #1H. The well had an initial 24-hour peak natural flow rate of 1,572 barrels of oil equivalent per day, with 77% oil content.
With the success of this exploration, Pioneer is on an expansion path. It looks forward to more such opportunistic programs in 2013 to gain significant market share. We believe such accomplishments will garner profits for Pioneer Natural Resources in the upcoming quarters.
Pioneer, the third largest driller in the country, focuses on oil- and liquids-rich drilling, as evidenced by the speeding up of activities in the horizontal Wolfcamp Shale play, where it holds the key position occupying more than 400,000 potential acres.
Additionally, Pioneer is gaining investor attention with its production growth and resource potential. The company is accelerating its drilling program around key areas with significant cost control initiatives, which we believe must point towards better earnings and free cash flow visibility.
Pioneer currently carries a Zacks Rank #3 (Hold). Meanwhile, certain other U.S. E&P firms like EnCana Corporation (ECA), Anadarko Petroleum Corporation (APC) and EOG Resources Inc. (EOG) are expected to outperform the equity market in the next one to three months. All the three stocks currently hold a Zacks Rank #2 (Buy).
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