Pioneer’s A+ game might match OPEC

PXD-PVby Matthew Johnson

Recently, we reviewed some pressure pumpers and even took a stab at Eog Resources (EOG: $91), often called the Apple ($108.27) of U.S. shale.  If Eog Resources is the Apple of U.S. Shale then is Pioneer (PXD: $224) the Uber-equivalent?  Their CEO, Scott Sheffield, stated last week that their operating costs in the Permian Basin were close to $2 per BOE. Some have disputed this by looking deeper into their financials.  Let’s take a look at what we’re good at which is frac jobs and frac spreads.

We’ve reported 440 frac jobs since the beginning of 2015 running through Q1 2016.  PXD has shown a steady flow of work.

FSC Charts for PXD - comparisonFSC Charts for PXD - month by month

Pioneer is vertically integrated, so they do a lot of their own pressure pumping. However, we are tracking some activity with Halliburton (HAL: $43.84), Baker Hughes (BHI: $49.76) and Schlumberger (SLB: $81.20) in the last 18 months.

Here’s their top ten frac jobs by county since January of 2015:

FSC Charts for PXD - top 10 countiesThe majority of their activity takes place in Midland (Permian), Upton (Permian) and Karnes (Eagle Ford) counties.

Pioneer has been a technological leader in many aspects of frac’ing including well selection, pressure pumping  and refrac’ing.  The inclusion of their own pressure pumping team gives them a logistical and financial advantage over 90% of E&Ps in the United States.  Even if their CEO is exaggerating, it appears as their operational costs have shined a light on investors (their stock is up 40% since January of this year) and other shale companies that the impossible is, in fact, possible.  If OPEC’s goal was to knock U.S. shale offline they may have won some battles, but companies like pxd are tenacious.  The war is far from over.

sources:
Arthur Berman at oilprice.comPioneers $2 Operating Costs: Fact or Fiction?
Rachel Aldrich at The StreetPioneer Natural Resources Stock is the ‘Chart of the Day‘”
Nicholas Chapman at Market RealistAnalyzing Pioneer Natural Resources Q216 Earnings

Disclaimer
The data presented above has a margin of error of 5-8% as a result of E&P and/or service company errors or incorrect data filings. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by Primary Vision or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.

EOG is white hot!

EOG-Resourcesby Matthew Downes

Since January 20th, EOG Resources (EOG: $90.24) stock is up 50%.  We’re gonna look a bit deeper into this E&Ps activity levels and provide some additional analysis.

In the chart below we analyze their frac jobs from 2015 to current.  Since January of 2015 EOG has performed close to 700 frac jobs. It has the appearance of a roller coaster ride, but further analysis will show you that this is a company who squeezed every dollar and leveraged their technology for every single frac job. Patience and target well selection were key factors in 2015.

FSC Charts for EOG - comparisonMonth by Month:

FSC Charts for EOG - month by monthOver the same period EOG primarily worked with 4 pressure pumpers (in order):
1. Pumpco, a division of Superior Energy Services (SPN: $16.76)
2. Halliburton (HAL: $43.91)
3. Universal, a division of Patterson-UTI, Energy Inc. (PTEN: $19.77)
4. Baker Hughes Inc. (BHI: $47.71)

One more chart we thought was interesting to follow was their activity by county and state.

FSC Chart for EOG - top activity by counties

The majority of their activity takes place in Gonzales and La Salle counties in Texas.  This chart reflects activity in New Mexico, Texas, North Dakota and Wyoming.

The oil patch has seen a rash of bankruptcies over the last 24 months as the result of a downward pricing cycle. While you’d think this would be a company motto for all operators, EOG is targeting premium drilling properties with an after-tax rate rate of return of 30% which is outstanding. In a recent Forbes article they polled 18 analysts with 44% of them recommending a strong buy.

Frequently referred to as the Apple of all oil and gas, do you think EOG can continue to improve while the Oil markets fully recover?

sources
Bruce Kamich of The Street “EOG Breaks Out of an Impressive Base Pattern
Dividend Channel on Forbes “EOG Cross Above Average Analyst Target
Erwin Cifuentes of OilPrice.com “EOG Resources Boosts Fracking Plan by 30 Percent

Disclaimer
The data presented above has a margin of error of 5-8% as a result of E&P and/or service company errors or incorrect data filings. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by Primary Vision or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.