Strong oil prices boost Pioneer's, Coterra's bottom lines
Mar 01, 2023

Feb 22 (Reuters) - U.S. shale oil producers Pioneer Natural Resources (PXD.N) and Coterra Energy (CTRA.N) on Wednesday posted better-than-expected profits for the fourth quarter, as crude prices hovered near multi-year highs following OPEC+ production cuts and sanctions on major oil exporter Russia.


The results matched the industry's huge gains as Brent crude averaged $88.63 per barrel in the fourth quarter of 2022, up 11% from the same period in 2021.


Pioneer's average realized prices of oil in the reported quarter rose to $83.53 per barrel, up 9.4% from a year earlier, while Coterra's average realized price rose 8.8% to $82.26 per barrel of oil from last year.


Pioneer said it would spend between $4.45 billion and $4.75 billion this year, with some $150 million to $200 million dedicated to drilling four Barnett/Woodford formation wells in the Midland Basin, and for an enhanced oil recovery project and adding electric power infrastructure for future operations.


Pioneer anticipates 2023 oil production of 349,000 to 364,000 barrels per day and total oil and gas production of between 659,000 and 687,000 barrels per day. It produced 351,964 barrels of oil per day in 2022, and 649,773 barrels of oil and gas per day last year.


Coterra said its proved reserves were down 17% from a year ago, in line with a warning issued last

 quarter. Its reserves are roughly 78% natural gas, 10% oil and 12% NGLs, the company said in a release on Wednesday.

On an adjusted basis, Coterra earned $1.16 per share, beating Wall Street consensus of $1.10 per share, according to Refinitiv data. Excluding items, Pioneer earned $5.91 per share, above analysts' estimates of $5.77 per share, according to Refinitiv data.



(Reporting by Arshreet Singh in Bengaluru and Liz Hampton in Denver; Editing by Shailesh Kuber and Matthew Lewis)

Oil eases on higher US crude output, hopes of Israel-Hamas ceasefire

By Emalee Springfield • 02 May, 2024
HOUSTON, April 30 (Reuters) - Oil prices fell 1% on Tuesday, extending losses from Monday, on the back of rising U.S. crude production, as well as hopes of an Israel-Hamas ceasefire. Brent crude futures for June, which expired on Tuesday, settled down 54 cents, or 0.6%, at $87.86 a barrel. The more active July contract fell 87 cents to $86.33. U.S. West Texas Intermediate crude futures were down 70 cents, or 0.9%, at $81.93. The front-month contract for both benchmarks lost more than 1% on Monday. U.S. crude production rose to 13.15 million barrels per day (bpd) in February from 12.58 million bpd in January in its biggest monthly increase since October 2021, the Energy Information Administration said. Meanwhile, exports climbed to 4.66 million bpd from 4.05 million bpd in the same period. U.S. crude oil inventories rose by 4.91 million barrels in the week ended April 26, according to market sources citing American Petroleum Institute figures on Tuesday. Stocks were expected to have fallen by about 1.1 million barrels last week, an extended Reuters poll showed on Tuesday. Official data from the EIA is due on Wednesday morning. Gasoline inventories fell by 1.483 million barrels, and distillates fell by 2.187 million barrels. Expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown in recent days following a renewed push led by Egypt to revive stalled negotiations between the two. However, Israeli Prime Minister Benjamin Netanyahu vowed on Tuesday to go ahead with a long-promised assault on the southern Gaza city of Rafah. "Traders believe some of the geopolitical risk is being taken out of the market," said Dennis Kissler, senior vice president of trading at BOK Financial. "We're not seeing any global supply being taken off the market." Continued attacks by Yemen's Houthis on maritime traffic south of the Suez Canal - an important trading route - have provided a floor for oil prices and could prompt higher risk premiums if the market expects crude supply disruptions. Investors also eyed a two-day monetary policy meeting by the Federal Reserve Open Market Committee (FOMC), which gathers on Tuesday. According to the CME's FedWatch Tool, it is a virtual certainty that the FOMC will leave rates unchanged at the conclusion of the meeting on Wednesday. "The upcoming Fed meeting also drives some near-term reservations," said Yeap Jun Rong, market strategist at IG, adding that a longer period of elevated interest rates could trigger a further rise in the dollar while also threatening the oil demand outlook. Some investors are cautiously pricing in a higher probability that the Fed could raise interest rates by a quarter of a percentage point this year and next as inflation and the labor market remain resilient. U.S. product supplies of crude oil and petroleum products, EIA's measure of consumption, rose 1.9% to 19.95 million bpd in Feb. However, concerns over demand have crept up as diesel prices weakened . Balancing the market, output from the Organization of the Petroleum Exporting Countries has fallen in April, a Reuters survey found, reflecting lower exports from Iran, Iraq, and Nigeria against a backdrop of ongoing voluntary supply cuts by some members agreed with the wider OPEC+ alliance. A Reuters poll found that oil prices could hold above $80 a barrel this year, with analysts revising forecasts higher on expectations that supply will lag demand in the face of Middle East conflict and output cuts by the OPEC+ producer group. View on the Reuters Website

Oil and gas industry’s “strong” free cash flow to support increasing production targets

By Emalee Springfield • 01 May, 2024
Last year, the demand for loans from oil and gas companies fell 6% year-on-year, and that followed a decline of 1% in 2022. Oil and gas companies don’t need a lot of loans because they’re generating so much money these days from their underlying businesses, said Andrew John Stevenson, senior analyst at Bloomberg Intelligence. And that trend is likely to continue through the end of the decade, he said. “The oil and gas industry has experienced a number of booms and busts over the past few decades, but for now, it appears to be flush with cash,” he said. The healthy balance sheets reflect the boost that companies have received from rising oil prices, buoyed by robust demand and OPEC+ production cuts. The sector’s free cash flow is so strong that the group’s leverage ratio, which measures a company’s net debt relative to earnings before interest, taxes, depreciation and amortization, fell to 0.8 in 2023 from 2.4 in 2020, Stevenson said. The ratio will likely slide below zero by the end of the decade, he said.
Share by: