Pioneer Natural Resources bolstered its bottom line in the third quarter by selling its midstream operations in the Eagle Ford Shale and implementing aggressive cost-cutting measures in its oil and gas drilling operations.
The Irving-based energy company on Monday said net income rose to $646 million, or $4.27 per diluted share, compared with $374 million in last year’s third quarter. And despite lower oil prices, revenues climbed $705 million — to $2.2 billion from $1.5 billion — thanks to asset sales and derivative trading.
Pioneer profited by selling its oil and gas transportation system in the Eagle Ford for $2.15 billion — pumping about $530 million into its accounts in the third quarter with the rest to be paid in 2016, the company reported. It also realized savings by cutting its costs on drilling and services by 25 percent compared with 2014, the company reported.
But excluding derivative market-to-market gains and other unusual items, its adjusted results came to a loss of one cent per diluted share.
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Overall, CEO Scott Sheffield said he was pleased with the third quarter results. Pioneer reported that its production hit 211,000 barrels a day in the third quarter, above what the company had previously expected.
“Despite the weak commodity price environment, the company reported a great quarter that was highlighted by the impressive production growth delivered by our horizontal drilling program in the Spraberry/Wolfcamp,” he said. “This drilling program continues to provide strong returns due to our aggressive pursuit of cost reductions and efficiency gains...”
In the second quarter, Pioneer said it planned to ramp up its drilling program in the Permian Basin oil fields, even if it loses money because of low oil prices. It boosted its drilling budget to $2.2 billion and added rigs in the Spraberry and Wolfcamp fields.