Oil and gas company Pioneer Natural Resources Co. (PXD) on Tuesday reported a profit for the third quarter that rose more than four-fold from last year, reflecting derivative gains and higher revenues.
Separately, Pioneer Natural Resources said that it has agreed to sell 5.75 million shares of its common stock in an underwritten public offering, and added that it is pursuing a sale of its 50.1 percent share of the Eagle Ford Shale or EFS Midstream business.
The Irving, Texas-based company's third quarter net income was $374 million or $2.58 per share, up from $91 million or $0.65 per share in the year-ago quarter.
The latest quarter's results included noncash mark-to-market gains on derivatives of $216 million after tax, or $1.49 per share, and loss from discontinued operations of $37 million after tax, or $0.26 per share, associated with the Barnett Shale and Hugoton results during the quarter.
Excluding non-cash derivative mark-to-market gains and other unusual items, adjusted earnings for the latest quarter were $1.35 per share. On average, thirty nine analysts polled by Thomson Reuters expected the company to earn $1.26 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter grew 87 percent to $1.51 billion from $807 million in the prior-year quarter. Analysts had a consensus revenue estimate of $1.02 billion for the quarter.
Costs and expenses for the quarter rose 27 percent from the year-ago period to $866 million.
Sales or production volumes from continuing operations for the quarter averaged 186 thousand barrels oil equivalent per day (MBOEPD), up 22 percent from last year. However, average realized prices from continuing operation was $56.51 MBOEPD, down 3 percent from the year-ago period.
Looking ahead to the fourth quarter, Pioneer forecasts production to average 200 MBOEPD to 205 MBOEPD.
For fiscal 2014, Pioneer narrowed its production growth forecast from continuing operations to a range of 18 percent to 19 percent from a range of 16 percent to 19 percent. The company affirmed its outlook for annual production growth from continuing operations of 16 percent to 21 percent through 2016.
Separately, Pioneer said that it has agreed to sell 5.75 million shares of its common stock in an underwritten public offering. Citigroup and BofA Merrill Lynch are acting as joint book-running managers to the offering, expected to close on or about November 10.
Pioneer expects to use the net proceeds from the offering for general corporate purposes. This includes continuing to develop its position in the Spraberry/Wolfcamp play in West Texas and construction of front-end loaded infrastructure.
Pioneer is pursuing a sale of its 50.1 percent share of the Eagle Ford Shale or EFS Midstream business. Reliance Holding USA, Inc., which owns the remaining 49.9 percent of the EFS Midstream business, also plans to pursue the sale of its share in a joint process with Pioneer, which is the operator of the business.
The company noted that the sale of EFS Midstream would enable it to strategically redeploy capital to its core, oil-rich Spraberry/Wolfcamp assets in the Permian Basin of West Texas, where it is successfully transforming the substantial resource potential it delineated in 2013 into strong production growth.
Pioneer said it has no plans to divest its Eagle Ford Shale upstream assets. The company added that the sale of EFS Midstream is not expected to impact its ability to export processed Eagle Ford condensate.
The EFS Midstream business was formed in 2010 to construct facilities to provide gathering and handling services for condensate and natural gas produced from wells on dedicated acreage in the Eagle Ford Shale.
These services are provided for the Eagle Ford Shale upstream joint venture operated by Pioneer, and for various third parties. The EFS Midstream system consists of 10 central gathering plants and about 460 miles of pipelines. Pioneer's cash flow from EFS Midstream is forecast to be over $100 million in 2015.
PXD closed Tuesday's regular trading session at $180.91, down $7.23 or 3.84 percent on a volume of 2.59 million shares. In after-hours, the stock further declined $5.41 or 2.99 percent to $175.50.
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