Pioneer Natural Resources Warns of $832 Million Loss for Quarter

Pioneer Natural Resources is expecting to report a total net loss on derivatives of about $1.5 billion for the first half of the year, the Permian Basin producer said in a regulatory filing.

Pioneer Natural Resources Warns of $832 Million Loss

Analyst Gabriele Sorbara maintained his ‘Buy’ rating for Pioneer Natural Resources following the disclosure as he views the company as “a unique Permian player with a clear variable dividend framework that could garner interest from the generalist investor,” he wrote in a Siebert Williams Shank research note. (Source: Shutterstock.com)

Pioneer Natural Resources Co. warned in a regulatory filing on July 27 it would be hit by an $832 million second-quarter loss primarily as the result of hedges.

Many producers last year locked in sales when oil prices rose above $40/bbl following a catastrophic first half of 2020 including WTI briefly trading below $0. However, as crude has since jumped to above $60/bbl this year, these same producers, including Pioneer, are now facing losses on hedges for the quarter.

In a filing with the U.S. Securities and Exchange Commission, Pioneer reported a total cash derivative payments of $570 million, larger than estimate of $512.7 million made by Siebert Williams Shank & Co. LLC, according to Gabriele Sorbara, equity research analyst at the New York-based firm.

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Emily Patsy

Emily Patsy is the senior managing editor for Hart Energy’s Digital News Group. She's responsible for the daily news flow and also manages the A&D Watch and Energy Pulse weekly newsletters.