Pioneer reported fourth quarter net income attributable to common stockholders of $43 million, or $0.26 per diluted share. These results include the effects of noncash mark-to-market adjustments and certain other unusual items. Excluding these items, non-GAAP adjusted income for the fourth quarter was $177 million, or $1.07 per diluted share. < Adjusted net income compares to my Q4 forecast of $68 million, or $0.41 per share.
Cash flow from operating activities for the fourth quarter was $537 million. < Compares to my forecast of $531 million.
Pioneer Natural Resources (PXD) Q4 Results - Feb 26
Pioneer Natural Resources (PXD) Q4 Results - Feb 26
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Pioneer Natural Resources (PXD) Q4 Results - Feb 26
I have updated my forecast/valuation model for PXD and it will be posted to the EPG website this afternoon.
Analysts' new price targets since the Company released q4 results and detailed guidance for 2021
Stifel 2/26/2021 $162.00
Scotiabank 2/25/2021 $180.00
RBC Cap 2/25/2021 $185.00
Truist Fin 2/25/2021 $175.00
My valuation increases by $18 to $168. I do think there is upside to my valuation because I think the midpoint of their guidance is very conservative.
During 2021, the Company plans to operate an average of 18 to 20 horizontal drilling rigs in the Permian Basin, including a one-rig average program in the Delaware Basin and a three-rig average program in the southern Midland Basin joint venture area. The 2021 program is expected to place 385 to 415 wells on production, predominantly in the Midland Basin, with a well mix of approximately 40% Wolfcamp B, 40% Wolfcamp A and 15% Spraberry in the Midland Basin and the remaining 5% in the Delaware Basin. Pioneer will continue to evaluate its drilling and completions program on an economic basis, with future activity levels assessed regularly and governed by its reinvestment framework.
2021 Outlook
The Company expects its 2021 drilling, completions and facilities capital budget to range between $2.4 billion to $2.7 billion, with an additional $100 million budgeted for integration expenses related to the acquisition of Parsley, resulting in a total 2021 capital budget range of $2.5 billion to $2.8 billion. The Company expects its capital program to be fully funded within forecasted cash flow of approximately $4.6 billion.
Pioneer expects 2021 oil production of 307 to 322 MBOPD and total production of 528 to 554 MBOEPD, which excludes Parsley production prior to the Parsley acquisition close date of January 12, 2021, and includes the expected production impact attributable to the recent winter storm of approximately 8 MBOPD and 14 MBOEPD. On a pro forma basis for the Parsley transaction, 2021 oil production and total production ranges are expected to be 310 to 325 MBOPD and 533 to 559 MBOEPD, respectively. The Company continues to monitor the macroeconomic environment and will remain flexible and responsive to changing market conditions to preserve its strong balance sheet.
Pioneer has redefined its investment framework to prioritize free cash flow generation and return of capital to shareholders. This capital allocation strategy is intended to create long-term value by optimizing the reinvestment of cash flow to accelerate the Company's free cash flow profile. At current strip pricing, the Company expects its reinvestment rate to be between 50% to 60%, generating increased free cash flow. Pioneer is targeting a 10% total annual return, inclusive of a strong and growing base dividend, a variable dividend and high-return oil growth. The Company believes this differentiated strategy positions Pioneer to be competitive across industries.
Pioneer continues to maintain substantial oil and gas derivative coverage in order to protect the balance sheet, providing the Company with operational and financial flexibility. The Company’s financial and derivative mark-to-market results and open derivatives positions are outlined in the attached schedules.
Analysts' new price targets since the Company released q4 results and detailed guidance for 2021
Stifel 2/26/2021 $162.00
Scotiabank 2/25/2021 $180.00
RBC Cap 2/25/2021 $185.00
Truist Fin 2/25/2021 $175.00
My valuation increases by $18 to $168. I do think there is upside to my valuation because I think the midpoint of their guidance is very conservative.
During 2021, the Company plans to operate an average of 18 to 20 horizontal drilling rigs in the Permian Basin, including a one-rig average program in the Delaware Basin and a three-rig average program in the southern Midland Basin joint venture area. The 2021 program is expected to place 385 to 415 wells on production, predominantly in the Midland Basin, with a well mix of approximately 40% Wolfcamp B, 40% Wolfcamp A and 15% Spraberry in the Midland Basin and the remaining 5% in the Delaware Basin. Pioneer will continue to evaluate its drilling and completions program on an economic basis, with future activity levels assessed regularly and governed by its reinvestment framework.
2021 Outlook
The Company expects its 2021 drilling, completions and facilities capital budget to range between $2.4 billion to $2.7 billion, with an additional $100 million budgeted for integration expenses related to the acquisition of Parsley, resulting in a total 2021 capital budget range of $2.5 billion to $2.8 billion. The Company expects its capital program to be fully funded within forecasted cash flow of approximately $4.6 billion.
Pioneer expects 2021 oil production of 307 to 322 MBOPD and total production of 528 to 554 MBOEPD, which excludes Parsley production prior to the Parsley acquisition close date of January 12, 2021, and includes the expected production impact attributable to the recent winter storm of approximately 8 MBOPD and 14 MBOEPD. On a pro forma basis for the Parsley transaction, 2021 oil production and total production ranges are expected to be 310 to 325 MBOPD and 533 to 559 MBOEPD, respectively. The Company continues to monitor the macroeconomic environment and will remain flexible and responsive to changing market conditions to preserve its strong balance sheet.
Pioneer has redefined its investment framework to prioritize free cash flow generation and return of capital to shareholders. This capital allocation strategy is intended to create long-term value by optimizing the reinvestment of cash flow to accelerate the Company's free cash flow profile. At current strip pricing, the Company expects its reinvestment rate to be between 50% to 60%, generating increased free cash flow. Pioneer is targeting a 10% total annual return, inclusive of a strong and growing base dividend, a variable dividend and high-return oil growth. The Company believes this differentiated strategy positions Pioneer to be competitive across industries.
Pioneer continues to maintain substantial oil and gas derivative coverage in order to protect the balance sheet, providing the Company with operational and financial flexibility. The Company’s financial and derivative mark-to-market results and open derivatives positions are outlined in the attached schedules.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group