Pioneer Natural Resources Co., Dallas, raised its 2023 oil production guidance after second-quarter oil-equivalent output topped forecasts and was up 11% from the same period last year.
Helped by operating costs that were 20% lower than in the spring of 2022, Pioneer also reported second-quarter profits of $1.1 billion on revenues of $4.6 billion. A year ago, those numbers were $2.4 billion and $6.9 billion, respectively. The operator averaged 711,000 boe/d during the 3 months ended June 30, beating the midpoint of their guidance from late April by about 3%. Oil production averaged 369,000 b/d versus a forecast midpoint of 364,500 b/d.
The numbers have led chief executive officer Scott Sheffield and his team to lower their full-year spending plans on drilling, completions, and infrastructure in the Permian basin to $4.4-4.6 billion, the midpoint of which is $125 million lower than the previous outlook. The company plans to operate an average of 23-25 rigs, one fewer than previous guidance, and is looking to place 490-520 wells on production this year versus 500-530. Those numbers aren’t likely to grow much next year.
“We’ve had significant growth in productivity in 2023,” president Rich Dealy told analysts on a conference call. “That should make 2024 very capital-efficient. [It] probably means that we’re at the lower end of [adding] one to two rigs or maybe even potentially flat.”
The revised guidance from Pioneer’s executives for all of 2023 now stands at 364,000-374,000 b/d, with total oil equivalent production expected to be 697,000-717,000 boe/d, up a little more than 3% from prior forecasts. The company averaged 662,000 boe/d in fourth-quarter 2022 and 680,000 boe/d in first-quarter 2023.
After production costs per boe came in at $10.39 in the second quarter, Sheffield and his team are forecasting third-quarter costs to be $10.50-12.00/boe. Dealy said Pioneer’s teams in the field are seeing prices for steel, fuel, and chemicals come down but also noted that much of the company’s lowered capex forecast is due to its pullback in drilling.
Shares of Pioneer (Ticker: PXD) rose 1.5% to nearly $228 Aug. 2. Year to date, shares are up slightly, pushing the company’s market capitalization to more than $53 billion.
