Analyst Note| Dave Meats, CFA |
Pioneer reported production of 638 thousand barrels of oil per day, or mboe/d, was in the upper half of first-quarter guidance, and full-year guidance is unchanged as the firm remains on track to produce 623-648 mboe/d for 2022. The previously guided full-year capital budget of $3.3-$3.6 billion also remains intact, although management stated that inflationary pressures would likely see the final spending figure toward the high end of the range. Though Pioneer has managed the inflationary environment better than many competitors, it still faces the potential for incremental inflation on the commodities side (steel, diesel, chemicals, and so on) but it has locked in prices for about 60% of its 2022 program and secured certainty of supply for the remainder, albeit at market prices. We intend to incorporate these operating and financial results into our model shortly, but our fair value estimate of $221 and narrow moat rating are currently unchanged.