Saturday, September 28, 2019

Dividend Talk; Lots On PDX In The Permian -- September 28, 2019

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, travel, career, or relationship decisions based on what you read here or think you may have read here.

: I often make typographical and/or factual errors. If this is important to you go to the source.  It is more apt to occur in a long note like this.

T: this story was a bit misleading. Completely accurate but misleading. Early in the story, the writer says that the  4th-quarter-51-cent-dividend represents a 2% increase from the 4th quarter one year earlier. That's true, but the dividend was actually raised a quarter or two earlier this year.

PDX: a lot of folks suggest shale operators are losing money. But there are some paying a dividend. And some are increasing their dividends. I completely missed this because I don't follow the Permian closely, but back on August 6, 2019, it was reported that Pioneer Natural Resources announced a hefty increase in its quarterly dividend.
 ... an increase in the Company’s cash dividend to a quarterly amount of $0.44 per common share (equivalent to $1.76 per share on an annualized basis as compared to $0.64 per share previously). The quarterly dividend of $0.44 is payable October 10, 2019, to stockholders of record at the close of business on September 27, 2019 .... that was yesterday. Sorry for the late notice.
PDX: density note. From Zach's, September 5, 2019 --
Unlike many other operators in the Permian Basin, Pioneer steered clear of downspacing issues, primarily due to the amount of choice acreage it has in the region.
Downspacing is the method of drilling wells closer together in a particular area to maximize output. The pure-play Permian basin producer has operations across 680,000 net acres in the Midland Basin. While its peers have well spacing of less than or equal to 600 feet, Pioneer’s wells are situated 850 feet away from each other.
In 2019, the company intends to drill and produce 265-290 wells in the region compared with 270 wells drilled last year.
Moreover, the upstream energy player expects Permian production through 2019 in the band of 320-335 thousand barrels of oil equivalent per day (MBoE/D), higher than 319.9 MBoE/D a year ago.
Pioneer expects to operate an average of 21-23 rigs this year, from which it will likely generate free cash flow of $600 million.
This is expected to help the company to continue increasing quarterly dividends. Notably, it has managed to increase annualized dividend by roughly 2100% over the past few years.
Markedly, of the authorized $2-billion share buyback program, the company has executed $528 million of repurchases.
PDX, comments on previous note. I find that note on Pioneer Natural Resources staggering. This is hyperbole, but not much: to some extent, PDX is coming close to doing in the Permian almost a third or a fourth of what the entire Bakken is doing (again, very, very general comments; very, very rough data follows, in some cases but it helps me put PDX in perspective:
  • Some Bakken/PDX comparisons:
    • rigs:
      • entire Bakken: 60
      • PDX in the Permian: 21 - 23
    • wells drilled:
      • entire Bakken in one year: somewhere between 800 and 1,000, I suppose
      • PDX in the Permian: 265 - 290
    • production:
      • entire Bakken: 1.8 million boepd or thereabouts
      • PDX in the Permian: 320,000 boepd
  • Some PDX / CLR comparisons
    • acres:
      • PDX in the Permian: 680,000 net acres
      • CLR in the Bakken: 796,000 net acres (May, 2018)
    • rigs:
      • PDX: 21 - 23
      • CLR: I have to check but I assume in the 4 - 5 range
    • production:
      • PDX in the Permian: 320,000 boepd
      • CLR in the Bakken: 187,000 boepd
    • number of wells to be drilled per year
      • PDX in the Permian:  265 - 290
    • CLR in the Bakken: around 200 but I need to confirm

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