Page 8 - NorthAmOil Week 07 2022

NorthAmOil PERFORMANCE NorthAmOil

Pioneer to limit growth

regardless of oil price

PERMIAN BASIN PIONEER Natural Resources posted net placing 475-505 wells online. It expects to oper-
income attributable to common stockholders of ate 22-24 horizontal rigs in the Midland Basin
$763mn, or $2.97 per share, for the fourth quar- on average.
ter of 2021, up from $43mn, or $0.26 per share, The fact that Pioneer expects production
in the same quarter of 2020. to be lower year on year (y/y) is not surprising
Like other shale producers, the company given that it has sold off its Delaware Basin assets.
benefited from rising oil prices, which averaged Adjusted for asset sales, the company is aiming
$77.45 over the fourth quarter of last year and to keep output roughly flat compared with the
have continued to increase since. The average fourth quarter. And Pioneer’s CEO, Scott Shef-
sales price for its crude rose to $76.38 per barrel field, said on the company’s earnings call that
in the fourth quarter, from $40.94 per barrel a even if oil prices were to rise to higher levels than
year ago. previously expected, Pioneer would limit its
The company’s production also rose, reach- annual production growth to 0-5%.
ing 687,143 barrels of oil equivalent per day “We’re not going to change, as I said, at $100 Pioneer closed
(boepd). This was up from 364,482 boepd a year oil, $150 oil, we’re not going to change our
earlier and fell within the upper half of Pioneer’s growth rate. We think it’s important to return the $3.1bn sale
guidance. The Permian Basin-focused pro- cash back to the shareholders,” Sheffield said. He
ducer also reported record annual free cash flow added that oil prices could “easily” rise to $150 of its assets in
generation of $3.2bn in 2021, which it said had per barrel.
supported the return of $1.9bn to shareholders Sheffield also called for private oil and gas the Permian’s
over the course of the year. These returns were producers in the Permian to be “reined in”, attrib- Delaware
made both through the company’s dividend and uting the majority of flaring of associated gas in
through opportunistic share repurchases. the basin to them. sub-basin to
Pioneer closed the $3.1bn sale of its assets “We need to rein in the privates through
in the Permian’s Delaware sub-basin to Conti- regulation, whether it’s EPA [the Environmen- Continental
nental Resources on December 21. As a result, tal Protection Agency], state, investors, bond
operating and financial results related to those investors,” he said. Resources on
assets are only included up to December 20 in According to Sheffield, flaring in the Permian December 21.
Pioneer’s fourth-quarter earnings release. The has fallen to less than 200mn cubic feet (5.7mn
company is now focused on the Permian’s Mid- cubic metres) per day from a peak of 750 mmcf
land sub-basin. (21.2 mcm) per day over the past two years.
Looking ahead to 2022, Pioneer has unveiled However, he said the public companies had
capital expenditure guidance of $3.3-3.6bn. At driven their flaring intensity below 1% – and
the midpoint, this would mark an increase from were ultimately aiming for 0.2% – but that pri-
$3.3bn in 2021. The company anticipates pro- marily private operators continued to flare more
ducing 623,000-648,000 boepd this year, while than 1%.™

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