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On Wednesday, JPMorgan (NYSE:) updated its assessment of Pioneer Natural Resources (NYSE:), reducing the stock’s price target from $253.00 to $244.00, while maintaining an Overweight rating. The firm recognized the company’s continued strong operational performance, citing a solid fourth quarter of 2023 and a capital-efficient outlook for 2024.
Pioneer Natural Resources’ oil volume guidance of 388 thousand barrels of oil per day (MBo/d) matched closely with the consensus estimate of 389 MBo/d. Notably, the company’s capital expenditure (capex) budget of $4.4 billion for the year was 5% lower than the consensus capex estimates, which were approximately $4.6 billion.
The company has expressed confidence in the performance of its longer lateral wells, those extending over 15,000 feet, which are expected to provide a 35% internal rate of return (IRR) uplift compared to wells with 10,000-foot laterals.
Over the past year, Pioneer Natural Resources successfully placed over 125 wells to sales with lateral lengths exceeding 15,000 feet and has an undrilled inventory of more than 1,000 wells of this category.
Pioneer Natural Resources plans to introduce a fourth simul-frac fleet in the first half of 2024 to boost operational efficiency further. The company has also fully transitioned its frac fleets to be powered by either electricity or dual-fuel, aligning with modern energy efficiency standards.
In addition, Pioneer Natural Resources holds a significant stake in ProPetro, owning 16.6 million shares valued at approximately $125 million. However, the company reported that it did not utilize any ProPetro frac spreads by the end of 2023.
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