Page 10 - NorthAmOil Week 31 2021

NorthAmOil PERFORMANCE NorthAmOil

Profits roll in for shale drillers

US SHALE drillers are reporting their results for $1.71 per share, up from a loss of $2.4bn in the
the second quarter of 2020, and profits are same quarter of 2020.
piling up. This comes as a result of stronger Diamondback’s second-quarter production
oil demand and prices, thereby helping to lift reached 401,500 boepd on average, and the com-
profits. pany said it was raising its guidance for the whole
However, the shale industry still appears to of 2021 from 350,000-360,000 boepd to 363,000-
be moving cautiously, rather than attempting 370,000 boepd.
to rapidly ramp up production. Given what Continental, meanwhile, reported sec-
the industry has been through in recent years, ond-quarter net income of $289.3mn, or $0.79
and the ongoing pressure from investors to per share, compared with a net loss of $239.3mn
demonstrate capital discipline, this comes as no in the same quarter of 2020.
surprise. Continental’s oil and gas production rose
Among those reporting profits were Permian from 202,815 boepd a year ago to 338,699 boepd
Basin giant Pioneer Natural Resources, which in the latest quarter. The shale
posted second-quarter net income of $380mn, Also notable were moves being made in
up from a loss of $449mn a year ago and a loss of relation to dividends and share repurchases. industry still
$70mn in the first quarter of 2021. For example, Pioneer announced an inaugural
The company is benefiting from integrating variable dividend of $1.51 per share that will be appears to
major acquisitions into its portfolio, having paid during the third quarter. Meanwhile, Dia-
taken over Parsley Energy at the start of the year mondback said it was hiking its annual dividend be moving
and then following this up with its purchase of by 12.5% to $1.80 per share. And Continental cautiously, rather
DoublePoint Energy in May. said it was resuming its $1bn share repurchase
“Pioneer delivered a strong quarter as we programme, with $317mn of share repurchases than attempting
integrated DoublePoint operations into our asset having previously been executed.
base, while continuing to execute one of the most Those moves are being seen as evidence that to rapidly ramp
efficient capital programmes in the industry,” shale producers continue to prioritise share-
stated Pioneer’s CEO, Scott Sheffield. holder returns, rather than ramping up spend- up production.
Pioneer’s second-quarter sales volumes ing to raise production. This comes despite the
amounted to 629,468 barrels of oil equivalent per continued strength of crude prices, which are at
day, up from 374,563 boepd a year ago. their highest levels since 2018.
Pioneer’s results met analyst expectations, Another oil producer with shale opera-
while other major shale producers includ- tions, Hess, said last week that it could take US
ing Diamondback Energy and Continental oil production more than four years to return
Resources beat analyst forecasts. Diamondback – to pre-pandemic levels. Hess also reiterated
which also focuses heavily on the Permian Basin its commitment to its previous spending plan
– posted a second-quarter profit of $311mn, or despite rising demand for oil.™

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