U.S.oil stock Pioneer Natural Resources reported mixed fourth-quarter results Wednesday after Continental Resources and Devon Energy reported above-forecast results earlier this week.
Oil stocks are off to a volatile week, as a possible Russian invasion of Ukraine has put the markets on edge. The situation sent oil prices toward $100 per barrel on Monday, then dragged them lower again on Tuesday and Wednesday. In addition to potential oil market interruptions, Europe gets about a third of its natural gas from Russia and analysts worry that an invasion of Ukraine could potentially upend European energy markets.
But even as oil prices climb, U.S. independent oil companies have been uncharacteristically cautious about expanding drilling and other capital spending projects. Instead, after years of industry bankruptcies and under pressure from lenders and investors, they are focused on defending their balance sheets.
Still, production from the Permian Basin in West Texas and New Mexico was on track to top its pre-pandemic record levels by the end of December, according to the U.S. Energy Information Administration.
OPEC+, the Organization of the Petroleum Exporting Countries and nonmember partners including Russia, will be watching to see what U.S. producers will do this year.
"The political pressure will grow for OPEC+ to hit their quotas and to promise more output, but it doesn't seem like anything will get them to pump more, except if U.S. shale booms back," wrote Oanda analyst Edward Moya in a note Monday.
Pioneer Natural Resources
Estimates: Analysts see Pioneer earnings per share soaring 270% to $3.99. Revenue is seen rising 180% to $5.18 billion.
Results: Adjusted EPS of $4.58 on revenue of $4.32 billion. Pioneer saw free cash flow of $1.1 billion for the quarter.
The company announced a $3.75 per share dividend as it looks to return more cash to shareholders.
"Our deep Midland Basin inventory of high-return well locations, coupled with best-in-class margins and operating efficiencies, provides attractive corporate returns that generate durable cash distributions through commodity price cycles," CEO Scott Sheffield said in the release.
Outlook: Pioneer sees 2022 capital spending of $3.3 billion to $3.6 billion. It plans to operate 22 to 24 drilling rigs in the Midland Basin during the year.
Oil production is expected to average 350,000 to 365,000 barrels per day this year and 348,000 to 363,000 bpd in Q1.
Stock: Shares edged up 0.2% to 223 in after-hours trading on the stock market Wednesday. PXD stock is headed toward profit-taking range after breaking out of a consolation with a 196.74 entry point.
Oil Stocks: Devon Energy
Estimates: Analysts projected Devon earnings per share of $1.24 vs. no profit in the year-ago quarter. Revenue was expected to soar 190% to $3.72 billion.
Results: EPS of $1.39 on revenue of $4.27 billion.
Production averaged 611,000 oil-equivalent barrels per day during the quarter, beating expectations by 3%.
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Q4 0perating cash flow hit $1.6 billion, up 173% from Q1 when the deal with WPX closed. Full-year operating cash flow tripled vs. 2020 to $4.9 billion.
"Our business is streamlined to capture the benefits of higher commodity prices and we will remain extremely disciplined by prioritizing value over the pursuit of volume," said CEO Rick Muncrief in the release. "This shareholder-friendly approach will once again translate into differentiated cash returns and excellent returns on capital employed."
Stock: Shares dipped 0.1% to 53.80 late Wednesday.
Oil Stocks: Continental Resources
Estimates: FactSet analysts saw Continental swinging to a profit of $1.70 per share vs. a loss of 23 cents per share in the year-ago quarter. Revenue was expected to double to $1.69 billion.
Results: Continental Resources earnings per share came in at $1.79 on revenue of $1.93 billion.
Fourth-quarter production averaged 340,200 barrels of oil equivalent per day. Oil production averaged 166,700 bpd.
On Wednesday, Continental announced a 15% increase in its quarterly dividend to 23 cents per share.
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Looking ahead, Continental sees a capital spending plan of $2.3 billion for 2022. The plan includes a 15% increase in spending in the Bakken and Anadarko Basins. Continental plans to increase spending by $500 million on its recently acquired positions in the Permian and Powder River basins.
Continental sees $2.9 billion in free cash flow for 2022 with WTI at $80 per barrel.
Stock: Shares closed down 0.2% to 54.19 Wednesday. CLR shares are in buy range after it broke out of a cup-with-handle base with a 53.66 entry earlier this week. Shares then fell into sell range before breaking back through its buy point.
Follow Gillian Rich on Twitter for energy news and more.
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