PXD's Q2 Results - Aug 7

[dan_s]

Pioneer Natural Resources Company (PXD, $120.23, Buy; Target $256.00) by Derrick Whitfield

PXD delivers strong quarter and increases the dividend

We view the release as positive.

The positives include: i) a beat on total and oil production (1.9% and 0.5% above consensus, respectively) on lower than expected capex (15.1% below consensus), ii) reaching the annualized G&A savings target of ~$100mm ahead of schedule, iii) a dividend increase that represents a current yield of 1.5%, and iv) reiterated production guidance on lowered 2019 capex (3% decrease from prior guidance).
The only negative was an EBITDAX miss (6% below our estimate) due to lower than expected realizations during the quarter, which Pioneer expects to improve in 2H19 and 2020. < Several Permian Basin companies have stated that they are seeing improved takeaway capacity that should allow them to get gas and NGLs to better markets soon. That will help a lot of our upstream companies. - Dan.
Net-net, Pioneer delivered a strong quarter and lowered capex guidance while increasing the dividend.
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One of our members had an engineer friend that called me with some very negative stuff to say about PXD. Basically, that they were grossly overstating their proved reserves. I told him that (a) their quarterly results sure don't show anything like that, (b) intentionally overstating proven reserves is a BIG "no-no" and can get management in serious problems with the SEC and (c) the proven reserves shown in their annual report are certified by one of the most highly respected and conservative engineering firms on Earth.