Analysts Like Pioneer Natural Resources (PXD)

Page 1 of 2

Analysts continue to be impressed with Pioneer Natural Resources (NYSE:PXD) and are raising their price targets. The ball got rolling last month when analysts over at FBR & Co (NASDAQ:FBRC) raised their price target on the company to $225 per share. Then analysts over at UBS AG (ADR) (NYSE:UBS) followed up and raised their price target to $155. Now analysts at Bank of America Corp (NYSE:BAC)/Merrill Lynch have raised their target to $200. With all of these upgrades going on, it pays to have a look at what makes Pioneer Natural Resources (NYSE:PXD) so special.

UBS AG (USA) (NYSE:UBS)

First-quarter results

Pioneer’s impressive first-quarter results really got the ball rolling. Adjusted income in the first quarter came in at $136 million, or $1.02 per share. First quarter oil production was 171,000 barrels of oil equivalent per day. Prior guidance was for only 165,000 to 170,000 barrels; the results represent an increase of 6,000 barrels from last quarter.

The answer lies in the Permian Basin

Pioneer Natural Resources (NYSE:PXD) is one of the most active drillers in Texas’ Spraberry/Wolfcamp field in the Permian Basin. The company has 900,000 prime acres in this oil field. Oil companies have been drilling for oil in the region since 1923 when oil was first discovered in the area. The Spraberry field is one of the largest and most prolific oil fields in the U.S.

Analysts are getting excited about Pioneer because the company is in the early stages of a new horizontal-drilling program in the Wolfcamp Shale portion of the Spraberry field. So far, the geologic data and drilling results have been impressive. In its first horizontal-drilling well in the Wolfcamp, the 24-hour initial production rate came in at 1,572 barrels of oil equivalent per day. This type of flow-rate indicates the potential for Pioneer’s leasehold as the company drills more wells.

According to Pioneer Natural Resources (NYSE:PXD)’s geological data, the company estimates that there is 22 billion barrels of oil equivalent in the Wolfcamp Shale. On the first-quarter earnings call, chairman and CEO Scott Sheffield said

So you see, the Wolfcamp..will probably end up being the biggest discovery in North America. Before the shale era, Prudhoe Bay, was your largest discovery at about 13 billion barrels recoverable.

Looking forward

Pioneer Natural Resources (NYSE:PXD) expects second-quarter production to be between 174,000 and 179,000 barrels of oil equivalent per day.

In the second quarter, Pioneer is expected to close its $1.7 billion deal with Chinese company Sinochem to fund drilling costs in the Permian Basin. Pioneer is selling 40% of its interest in approximately 207,000 net acres in the Wolfcamp Shale. At closing, Sinochem will pay Pioneer $500 million and pay the remaining $1.2 billion by carrying a portion of Pioneer’s share of future drilling and facilities costs.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!