Pioneer Natural Resources (PXD, Financial) is moving in the right direction as it is expected to open many innovative gas-processing facilities in the future. It estimates to expand its sand mine to nearly three times its present capacity for $125 million to expand the capacity to approximately 2.1 million tons.
These new gas processing facilities are believed to build up significant natural gas stock for the company, going forward.
Operating enhancements to drive growth
Pioneer enhanced its gas processing capacity with approximately 27% to 30% ownership from nearly 285 million a day to 1 billion a day. Pioneer has exceeded twice the number of horizontal wells under operation during the second half over the first half. The production as of now to mid-October is over 195,000 barrels a day equivalent and comparable to the guidance for the quarter in 200,000 to 205,000 barrels a day range.
Pioneer forecasts production growth in the current low pricing environment to be in the 16% to 21% range for the next two years.
These results display the satisfactory production growth for the company as of now and are expected to be in the growth range in the near future.
Currently, Pioneer has $550 million of cash on hand and has recently closed the facilities at Barnett and Hugoton in the quarter for $150 million and $328 million, respectively.
Therefore, Pioneer looks in a stable position to invest significantly in the future growth given a robust balance sheet with considerable free cash flows.
Pioneer has two innovative plants estimated to be launched soon with one of them initiated the production, the Edward plant with Atlas. Other WTG plant expected to be introduced within a month. Going forward, Pioneer has grabbed significant orders for building another plant. Particularly, Martin County with Atlas is expected to be introduced in December 2015.
During the quarter, Pioneer reported GAAP net income attributable to common stockholders of $374 million or $2.58 per diluted share and thus driving significant shareholder value.
Conclusion
Pioneer has not provided any data for the trailing P/E ratio which indicated that the company was facing losses earlier. However, the forward P/E ratio looks somewhat stable at 35.90 that represent higher company cost. The PEG ratio of 1.64 above 1 depicts slower growth. The revenue per share and diluted EPS of 30.60 and -6.12 respectively is disappointing and signifies poor investor earnings.
But the quarterly revenue growth and quarterly earnings growth of 29.10% and 311.00%, respectively, is impressive and indicates significant shareholder earnings growth. The current ratio of 1.04 suggests the robustness of the company’s balance sheet. Finally, the investors are advised to invest into Pioneer Natural Resources Co. looking at the solid long-term growth prospects indicated by the CAGR for the next 5 years per annum of 18.23%, above the industry’s average of 15.77% and expect promising returns in a long run.
