Pioneer reiterates strategic shale plans in Q3 update

By Luke Geiver | November 05, 2019

Pioneer Natural Resources is continuing its strategic vision to provide greater shareholder value, reduce operating costs and monetize near-term assets associated with its massive Midland Basin oil and gas position.

In the third quarter, Pioneer generated roughly $250 million in free cash flow. The cash, in part, will be used to continue a share repurchase program that could total $2 billion, and help the company pay out its first ever dividend program. The dividend payment will provide roughly $0.44 per share. During the third quarter, Pioneer repurchased roughly $200 million worth of stock. Since engaging in its stock repurchase program, Pioneer has acquired roughly $728 million in repurchases to date.

The company also announced the completion of a savings plan to reduce general administrative costs. By enacting that plan earlier this year, Pioneer was able to save roughly $100 million. Now, Pioneer is looking to monetize non-core acreage not-slated for near-term development. The efforts could include cash market divestitures or the use of DrillCo arrangements, the company said, adding that along with those activities, the Midland Basin E&P is also evaluating its long-term water infrastructure strategy and its position in the Targa-operated Midland Basin gas processing set-up.

On the operations side, Pioneer continues to operate 21 horizontal drilling rigs in the Permian, including five in its southern joint venture area. The 21-rig program will help to bring out nearly 300 horizontal wells this year, with each horizontal well averaging roughly 9,800 feet and an estimated ultimate recovery of 1.6 million barrels of oil equivalent per well.

“Pioneer’s unmatched inventory of highly economic Midland Basin horizontal wells underpins a resilient program that maximizes shareholder value, generates top-tier margins and is being executed in a manner that demonstrates our commitment to sustainable practices,” said President and CEO Scott Sheffield.