Pioneer Natural Rises After Boosting Full-Year Output Target

  • Shale driller's Spraberry/Wolfcamp wells exceeding estimates
  • Company posts smaller-than-expected first-quarter loss

Pioneer Natural Resources Co. shares rose after the company lifted its 2016 production growth target -- without increasing spending -- because wells drilled in a West Texas shale field are pumping more crude than expected.

The stock climbed as much as 8.3 percent to $166.21 at 11:51 a.m. in New York, the biggest gain since December 2014. Year to date, the stock is up 33 percent. That’s compared with an 11 percent gain for energy companies in the Standard and Poor’s 500 index.

The company said output will grow more than 12 percent this year, up from an earlier estimate of 10 percent. Pioneer will hold its full-year capital budget at $2 billion -- a 9.1 percent reduction from 2015 -- and pay for it with cash flow from oil and gas sales, money it already has in the bank and money received from an earlier property auction, according to a Pioneer release on Monday. Output from shale zones known collectively as Spraberry/Wolfcamp probably will expand by 33 percent this year, more than offsetting declines in other fields, Pioneer said.

"It will allow the company to progress its completion optimization program," said Chief Executive Officer Scott Sheffield on a conference call. "I think we’re going to see continuous optimization gains across the board."

The company’s first-quarter net loss widened to $267 million, or $1.65 a share, from a loss of $78 million, or 52 cents, a year earlier, according to the statement. Excluding one-time items, the per-share loss was 64 cents, compared with the average estimate of a 76-cent loss among 40 analysts in a Bloomberg survey.

During the quarter, Pioneer increased its hedging for 2017 to about 50 percent of its oil production from 20 percent, and boosted its natural gas hedges to about 25 percent of 2017 output from zero.

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