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