Pioneer Natural Resources said on Wednesday its realized natural gas prices increased 29.2% in the second quarter of 2020, despite a huge drop in oil prices Kallanish Energy reports.
The Texas-based shale producer said in its Q2 earnings presentation that the average price for its natural gas was $1.15 per thousand cubic feet (Mcf) last quarter. The price compares to $0.89/Mcf in 2Q19.
On a quarterly basis, Pioneer’s gas prices dropped 28.6% from the $1.61/Mcf average reached in the first quarter. Yet, the biggest drop in realized prices was seen in oil prices, which shrunk by 58.3% in the quarter to $23.16 a barrel, from $55.50/Bbl a year earlier.
Gas production at its core Permian operations increased 20.2% to 416,429 Mcf/d, from 346,418 Mcf/d in 2Q19 thanks to efficiency gains. Volumes were 2% higher than the 408.536 Mcf/d produced in 1Q20.
However, output in other assets dramatically dropped to 87 Mcf/d, from 11,499 Mcf/d a year earlier. In 1Q20, Pioneer pumped 357 Mcf/d of natural gas. Overall, total gas production was up 16.4% at 416,516 Mcf/d.
Pioneer posted a net loss of $439 million in the quarter, compared to a loss of $169 million a year earlier.
Commenting on the results, CEO Scott Sheffield said: “although the macroeconomic environment presented challenges, Pioneer delivered another excellent quarter, with continued strong operational execution.”
The firm generated $165 million of free cash flow through significant cost reductions and operational efficiency improvements. “The improvements in capital efficiency during the second quarter led to a 2.5% increase in our full-year oil production guidance, while maintaining our previous capital spending range,” he added.
Pioneer expects its 2020 total production in the range of 356,000-371,000 barrels of oil equivalent per day.
Sheffield also announced plans to pay variable dividend to shareholders starting in 2022. This would be paid on top of its regular dividend, likely quarterly. Further details on the plans will be disclosed next year, he said.
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