Pioneer’s shale share repurchase program rises by $1.9B

By Luke Geiver | December 17, 2018

The share repurchase plans of Pioneer Natural Resources have shifted by $1.9 billion since February this year. The Dallas-based exploration and production company that has one of the world’s strongest positions in the Permian Basin, announced this week plans to commence a $2 billion common stock repurchase program. In February, the company said it would repurchase $100 million worth of shares.

The announcement follows several others this year by exploration and production firms working in shale. Several investors and analysts have noted a shift amongst investors on receiving more returns from their link to shale oil and gas development. The push for returns instead of production growth at any cost is one Pioneer has now listened too.

“The announced share repurchase program demonstrates our commitment to returning capital to shareholders,” said Tim Dove, president and CEO for Pioneer.

Pioneer and Dove believe the E&P will increase the level of returns it can provide to shareholders based on its position and execution in the Permian.

The move to repurchase shares happens when companies believe their stock is undervalued. Dove said the repurchase “offers an opportunity to deliver long-term value to our shareholders by repurchasing shares at attractive prices, which will enhance per-share metrics, including cash flow, production growth, net asset value and corporate returns, while maintaining one the best balance sheets in the industry.”

Pioneer holds more than 700,000 acres in the Permian. In 2019, it will run roughly 24 drilling rigs.