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Pioneer Natural Halts West Panhandle Output Due to Fire


Pioneer Natural Resources Company PXD recently reported that a fire broke out at a compressor station in its West Panhandle field, in Texas. The incident took place on Mar 6, 2018. The company reported no impairments connected to the incident.

The fire caused huge damage to the company's facility. Pioneer's production from the West Panhandle field is expected to halt due to the damages. Production from the field averaged at around 8,000 barrels oil equivalent per day (BOE/d), of which roughly 20% was oil, 55% natural gas liquids and 25% gas. Total production in fourth-quarter 2017 averaged approximately 305 thousand barrels of oil equivalent per day (MBOE/d), up 26.1% year over year, surpassing the Zacks Consensus Estimate of 298 MBOE/d.

Impacts on 2018 Results

The company fears its first-quarter 2018 production to get affected due to the stoppage of production in the field by around 2,000 BOE/d. Yet, Pioneer expects its total production in the first quarter to be in the guidance limit of 304,000-314,000 BOE/d. This can be supported by its Permian Basin outputs. Pioneer remains focused on the Permian Basin, which is among the lucrative oil shale plays with fewer risks for operation. The company expects first-quarter 2018 production from the basin to be in the range of 252,000-260,000 BOE/d.

Additionally, in the Permian Basin, the company is expecting to start production from 250-275 wells in 2018, of which, 200-225 wells will be from the northern area, while 50 wells from the southern Wolfcamp joint venture area. The company’s focus on the Permian Basin is noteworthy as it provides ample growth opportunities.

Alternative Option at Hand

Although the company can use some of its idle compressors to restart production in the West Panhandle field, production will likely start in late March or early April. Moreover, production will be then at its 80-90% of the earlier levels.

Price Performance

Pioneer has lost 5.4% in the past year compared with 9.9% decline of the industry it belongs to.

About the Company

Irving, TX-based Pioneer is an independent oil and gas exploration and production company. The company's assets are located primarily in the Permian Basin, Eagle Ford Shale play, the Raton field in southeast Colorado and the West Panhandle gas field in Texas Panhandle.

Zacks Rank and Other Stocks to Consider

Pioneer has a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the oil and energy sector are ConocoPhillips COP, Delek US Holdings, Inc. DK and Continental Resources, Inc. CLR, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based ConocoPhillips is an upstream energy player. Its revenues for first-quarter 2018 are anticipated to improve 9.6% from the prior-year quarter. The company witnessed a positive average earnings surprise of 144.5% in the trailing four quarters.

Brentwood, TN-based Delek US Holdings is a downstream energy company. Its revenues for 2018 are anticipated to improve 33.1% year over year. The company witnessed a positive earnings surprise of 25% in the fourth quarter of 2017.

Oklahoma City, OK-based Continental Resources is an oil and gas exploration and production company. Its revenues for first-quarter 2018 are expected to improve 53.8% from the year-ago quarter. For 2018, the bottom line is anticipated to be up 360.8%.

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