Page 7 - NorthAmOil Week 08 2021

NorthAmOil PERFORMANCE NorthAmOil

Pioneer reports fourth-quarter profit

PERMIAN BASIN PIONEER Natural Resources posted a net results illustrate that while a recovery is under
profit for the fourth quarter of 2020 this week, way, major producers have not yet brought their
with the result beating analyst expectations. The performance in line with pre-pandemic levels.
company, which recently solidified its position For the whole of 2020, Pioneer reported a net
as one of the largest players in the US’ Permian loss of $200mn, compared with a net profit of
Basin through its acquisition of Parsley Energy, $756mn for 2019. Its cash flow from operations
had delayed the release of its results owing to in the fourth quarter of the year totalled $537mn.
the disruption caused by the winter storm last Pioneer’s production averaged 364,000 bar-
week. rels of oil equivalent per day (boepd) over the
On February 23, Pioneer posted fourth-quar- fourth quarter of 2020, which the company said
ter net income attributable to common stock- was in the upper half of its guidance. The com-
holders of $43mn, or $0.26 per diluted share. pany cited efficiency gains as helping it to bring
However, it noted that this figure included the 58 horizontal wells online during the fourth
effects of “non-cash mark-to-market adjust- quarter and 255 wells over the full year.
ments and certain other unusual items”. Exclud- For 2021, Pioneer expects its drilling, com-
ing these items, Pioneer’s adjusted income for pletions and facilities capital budget to be $2.4-
the fourth quarter reached $177mn, or $1.07 per 2.7bn, with an additional $100mn budgeted for
share, while Refinitiv estimates cited by Reuters integration expenses related to the acquisition of
showed that analysts had expected earnings of Parsley. The total capital budget for 2021 is there-
$0.68 per share, excluding one-time items. fore $2.5-2.8bn.
This result compares with adjusted income The company anticipates oil production of
of $395mn in the fourth quarter of 2019, and 307,000-322,000 barrels per day (bpd) this year,
adjusted income of $26mn in the third quarter and total production of 528,000-554,000 boepd.
of 2020, with both of these figures also exclud- It is planning to operate an average of 18-20 hori-
ing one-time items. Sequential and year-on-year zontal drilling rigs in the Permian Basin.™

Occidental posts larger-than-expected loss

US OCCIDENTAL Petroleum posted a larg- Occidental was weighed down by debt
er-than-expected loss for the fourth quarter of when the last oil downturn began in early 2020,
2020 this week, having delayed the release of its spurred by the coronavirus (COVID-19) pan-
result amid the winter storm that caused major demic. Indeed, the company has debt worth
disruption, including to the oil and gas industry, roughly $33.6bn, and is planning to sell $2-3bn
in the US last week. worth of assets this year in an effort to pay it
The company’s net loss attributable to com- down. It has reiterated that its capital spending
mon stockholders for the fourth quarter of 2020 will amount to about $2.9bn over the course of
amounted to $1.3bn, or $1.41 per diluted share. 2021.
Its adjusted loss came to $731mn, or $0.78 per The company expects its production over the
share, compared with analyst expectations of a whole of 2021 to remain flat compared with the
loss of $0.59, according to IBES data, and down fourth quarter of 2020 at around 1.14mn barrels
from a loss of $0.30 per share in the fourth quar- of oil equivalent per day (boepd). Occidental’s
ter of 2019. Permian Basin unit exceeded its production
The latest loss included a pre-tax charge of guidance for the fourth quarter, achieving
$820mn from the sale of oil assets in West Texas, 382,000 boepd. However, even as the company’s
and came despite the fact that Occidental col- Permian output grows, it will fall short of previ-
lected 5% more – or $40.77 per barrel – for its ous expectations.
oil in the fourth quarter compared with the third Occidental said its total Permian production
quarter. is expected to be about 485,000 boepd in 2021,
With commodity prices recovering, the com- falling well short of the 800,000 barrels per day
pany also collected 31% more for its natural gas (bpd) of pipeline space it has committed to. As a
during the fourth quarter of 2020 compared with result, the company will need to buy the balance
the third. elsewhere, adding to its costs.™

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