Pioneer Natural Resources Co. is slimming its focus to the Permian Basin and embarking on a program of returning cash to shareholders, announcing that it will sell its 70,000 net acres in the Eagle Ford Shale and other assets in Texas, as well as plans to quadruple its dividend and buy back stock.
Pioneer announced its plans to divest the assets in conjunction with the release of its fourth-quarter 2017 earnings Feb. 6. The company reported a net income attributable to common stockholders of $665 million, or $3.87 per share; its adjusted income for the quarter was $209 million, or $1.22 per share. That topped the S&P Global Capital IQ consensus estimate of a profit of 84 cents per share.
Pioneer said it assets in the Eagle Ford represented all of its 46% working interest in the play, with a net production of 27,000 barrels of oil equivalent per day during the fourth quarter. The company is also selling its assets in the Raton field and the west Panhandle of Texas.
Data rooms for prospective buyers will open during the first quarter. "After these divestitures are completed, Pioneer's operations will be solely in the Permian Basin," CEO Timothy Dove said.
Pioneer also announced that it will quadrupling its semiannual dividend from 4 cents per share to 16 cents per share, payable April 12, 2018. The company's board of directors also approved a common stock repurchase program worth up to $100 million for 2018.
"The dividend increase combined with the stock repurchase program reflect the company's desire to return cash to shareholders and offset any share dilution," Pioneer said in a statement. "These actions also reflect the company's positive outlook for generating increasing cash flow based on its planned high-return drilling program, the expected proceeds from the planned asset divestitures that were announced earlier today and its strong balance sheet."
The $665 million profit for the most recent quarter compared to a loss of $44 million in the fourth quarter of 2016. Revenue and other income came in at $1.53 billion in the fourth quarter of 2017, compared to $1.03 billion a year earlier. Total production amounted to 304,989 boe/d in the fourth quarter of 2017, compared to 241,833 boe/d a year earlier.
For the full year, Pioneer reported $833 million in net income attributable to common stockholders, or $4.85 per share, compared to a loss of $556 million, or $3.34 per share, in 2016. Full-year revenue and other income was $5.46 billion, compared to $3.38 billion in 2016. Production in 2017 was 272,330 boe/d, compared to 233,842 boe/d in 2016.
