Pioneer Pure Assets’ drop in manufacturing will not derail variable dividend

By on February 24, 2021 0

(Reuters) – The current winter storm in Texas will reduce manufacturing at U.S. shale producer Pioneer Pure Assets by about 2% this yr, however hasn’t derailed the corporate’s plans to launch one of many first variable dividends of the oil business, CEO Scott Sheffield advised analysts on a convention name.

Extreme winter storms in Texas final week reduce oil manufacturing at America’s first shale discipline and can reduce the corporate’s output by about 8,000 barrels a day this yr, Sheffield mentioned. Pioneer nonetheless expects $ 2 billion in free money stream for 2021 and can start paying a variable dividend in 2022 along with its common dividend.

Devon Vitality Corp is the opposite shale producer to this point to comply with by way of on the concept of ​​paying a variable dividend, which it’ll launch this yr.

Analysts put Pioneer’s mixed dividend at between 4% and 5.5% based mostly on completely different money stream estimates.

The corporate expects to pay shareholders round $ 750 million in 4 quarterly funds in 2022 for the variable dividend, “forcing buyers to be aware of its money return technique,” mentioned Mizuho Securities analyst Vincent Lovaglio in a be aware.

Pioneer can also be focusing on $ 750 million in free money stream for debt compensation.

Shares have been up 3.5% to $ 150.32 on Wednesday morning.

On Tuesday, he reported fourth-quarter adjusted non-GAAP earnings of $ 177 million, greater than expectations, as crude oil costs recovered from pandemic lows.

It plans to function 18 to twenty drilling rigs within the Permian Basin this yr and 5 to seven fracking fleets, President Richard Dealy mentioned.

Most of Pioneer’s manufacturing is again on-line, and storm harm repairs are “minor within the grand scheme of issues,” CFO Neal Shah mentioned.

Jennifer Hiller reporting in Houston; Edited by Chizu Nomiyama, Matthew Lewis and Jonathan Oatis

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