The recent winter storm in Texas will dent U.S. shale producer Pioneer Natural Resources Co.’s production by about 2% this year, but has not derailed the company’s plans to launch one of the oil industry’s first variable dividends, CEO Scott Sheffield told analysts on a conference call.
Severe winter storms in Texas last week shuttered oil output across the top U.S. shale field and will reduce the company’s output by about 8,000 bbl/d this year, Sheffield said. Pioneer still expects $2 billion in free cash flow for 2021 and will start paying a variable dividend in 2022 in addition to its regular dividend.
Devon Energy Corp. is the other shale producer so far to have followed through on the idea of paying a variable dividend, which it will start this year.
RELATED:
Devon Energy Declares ‘Industry-first’ Variable Cash Dividend
Analysts put Pioneer’s combined dividend at 4% to 5.5% based on differing cash flow estimates.
The company expects to pay about $750 million to shareholders across four quarterly payments in 2022 for the variable dividend, “forcing investors to take notice with its cash return strategy,” Mizuho Securities analyst Vincent Lovaglio said in a note.
Pioneer is also targeting $750 million from free cash flow for debt repayment.
Shares rose 3.5% to $150.32 on the morning of Feb. 24.
On Feb. 23, it reported fourth-quarter non-GAAP adjusted income of $177 million, above expectations, as crude oil prices recovered from pandemic-driven lows.
It expects to run 18 to 20 drilling rigs in the Permian Basin this year and five to seven fracking fleets, President Richard Dealy said.
Most Pioneer production is back online and storm damage repairs are “minor in the grand scheme of things,” CFO Neal Shah said.
Recommended Reading
SM Energy Adds Petroleum Engineer Ashwin Venkatraman to Board
2024-12-04 - SM Energy Co. has appointed Ashwin Venkatraman to its board of directors as an independent director and member of the audit committee.
Baker Hughes Wins Contracts for Woodside’s Louisiana LNG Project
2024-12-30 - Bechtel has ordered gas technology equipment from Baker Hughes for the first phase of Woodside Energy Group’s Louisiana LNG development.
Chevron Names Laura Lane as VP, Chief Corporate Affairs Officer
2025-01-13 - Laura Lane will succeed Al Williams in overseeing Chevron Corp.’s government affairs, communication and social investment activities.
Plains All American Prices First M&A Bond of Year
2025-01-13 - U.S. integrated midstream infrastructure company Plains All American Pipeline on Jan. 13 priced a $1 billion investment-grade bond offering, the year's first to finance an acquisition.
Gigablue Enters CCS Agreement with Investment Firm SkiesFifty
2025-01-14 - Carbon removal company and investment firm SkiesFifty have partnered to sequester 200,000 tons of CO2 over the next four years.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.