Pioneer Natural Resources Company (PXD) reported fourth-quarter 2014 adjusted earnings of 80 cents per share, missing the Zacks Consensus Estimate of 95 cents. The results also decreased from the year-earlier adjusted income of $1.00 per share. The decline was mainly due to lower price realization.
Revenues and other income in the quarter increased 74.8% year over year to $1,666.0 million from $953.0 million. For full-year 2014, total revenue increased about 38.4% to $5,055.0 million from $3,652.0 million a year ago.
Production
Total production in the reported quarter averaged approximately 200.9 thousand barrels of oil equivalent per day (MBOE/d), up 27.8% year over year. The growth was attributable to robust yield from core growth assets – Spraberry field, Wolfcamp Shale and Eagle Ford Shale.
Oil production averaged 100.5 thousand barrels per day (MBbl/d), showing an improvement of 39.4% year over year. Natural gas liquids (NGLs) production surged 33.8% year over year to 42.6MBbl/d. Natural gas production increased to 347.0 million cubic feet per day (MMcf/d) from the year-ago level of 319.5 MMcf/d.
For full-year 2014, total production was 182.2 MBOE/d compared with 154.6 MBOE/d in the year-earlier period.
Price Realization
On an oil equivalent basis, the average realized price was $43.48 per barrel in the reported quarter compared with $54.70 in the year-ago quarter. The average realized price for oil was $66.64 per barrel compared with $90.88 in fourth-quarter 2013.
Average natural gas price increased 6.2% year over year to $3.60 per thousand cubic feet (Mcf). Natural gas liquids were sold at $18.50 per barrel, down from $30.18 in the year-ago quarter.
Cash, Debt &Capex
At the end of the quarter, cash balance was $1,025.0 million. Long-term debt was $2,665.0 million, representing a debt-to-capitalization ratio of 23.7% (against 28.6% in the preceding quarter).
Capital Outlay
For 2015, Pioneer plans to spend $1.85 billion in total. Of this, the company has planned drilling capex of $1.6 billion and capital for vertical integration of $0.25 billion.
An amount of $1,050 million has been allocated for the northern Spraberry/Wolfcamp area and $120 million has been set aside for the southern Wolfcamp joint venture area. The company has also allocated $390 million for Eagle Ford Shale and $40 million for other assets.
Guidance
Pioneer expects production to average between 192 MBOE/d and 197 MBOE/d for the first quarter of 2015.
Production costs are expected between $13.25 and $15.25 per BOE, and depletion, depreciation and amortization expense is expected to average between $16.00 and $18.00 per BOE. The projected range is $78–$83 million for general and administrative expenses, $45–$50 million for interest expenses and $30–$40 million for other expenses. The company expects exploration and abandonment expenses in the range of $25–$35 million while the expected tax rate is 35–40%.
Ranks
Pioneer currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked players from the oil and gas industry include InterOil Corporation (IOC), Golar Energy Partners LP (GMLP) and Hallador Energy Company (HNRG). All these stocks sport a Zacks Rank #1 (Strong Buy).
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