Pioneer output plan flat, offers new dividend

Permian basin-focused producer Pioneer Natural Resources is standing by prior plans to keep average 2021 oil production between 351,000-366,000 b/d but it unveiled a promised variable dividend earlier than expected.

An early adopter of the US shale producers' focus on flat production and improving returns to investors, Pioneer said the variable dividend of $1.51/share will be paid in the third quarter. This is earlier than the original plan for a 2022 variable dividend.

Third quarter oil production is forecast between 380,000-395,000 b/d while total oil and gas production is estimated at 660,000-685,000 b/d oil equivalent (boe/d). Production costs are expected to average $7.25-8.75/boe, reflecting higher expected commodity prices, production taxes and processing fees.

Pioneer continues to expect a drilling, completions and facilities capital budget of between $2.95bn-$3.25bn. An additional $100mn is budgeted for integration expenses for the acquisition of Parsley Energy and $50mn for integration of DoublePoint Energy. The capital program is expected to be fully funded from forecast 2021 cash flow of $6.45bn.

2Q performance

Second quarter oil production averaged 363,000 b/d, the upper end of its guidance, while total production averaged 629,000 boe/d, also near the top of guidance.

Second quarter average realized oil price was $64.55/bl, while the average realized natural gas price was $2.69/1,000 cf, excluding the effects of derivatives

In the second quarter Pioneer place 157 horizontal wells into production, and continued to improve operational efficiency.

Pioneer reporter a profit of $380mn on revenue of $3.4bn, up from a $449mn loss in the same quarter 2020 on revenue of $839mn, at the height of Covid-19-related shutdown of crude production. In the second quarter 2019 the company had a loss of $216mn on revenue of $1.9bn.

By Tom Fowler