David BurrowsPioneer Natural ResourcesPXDBUYNov 06, 2013
The groups in energy that have been doing well, are those exploration/development companies that are in very specific geographic regions where there are very low finding costs and, with technology, are growing reserves aggressively. This one is in the Permian Basin in Texas, one of the oldest US oil fields. They believe they have 8 Bakken zones stacked one on top of the other and have about 1200 drilling targets. A high growth company. His one concern is that WTI prices have been backing off in the last few weeks. While it has less impact on these companies that are finding oil, ultimately, if it gets tough enough, it will impact all oil stocks.
Exxon Mobil is offering 2.3 of its own shares for Pioneer, valuing PXD at $253 per share in a $60 billion all stock deal. Exxon is down somewhat. The energy space is looking good.
He just trimmed Pioneer, which topped out on Sept. 5, its ex-dividend date, but didn't like how it reversed after that. He still owns some Pioneer shares.
Loves the company but he just sold it because it is a prime M&A takeover target. He is overweight energy despite paring this and other energy holdings.
Their report later today will be straightforward. This year, they already said that if oil is around $80 they will pay out $20 in dividends and at $60, will pay $10. Likely, they will pay the former which amounts to about a 10% yield. Not complex. She owns it for the dividend, not the upside.
The groups in energy that have been doing well, are those exploration/development companies that are in very specific geographic regions where there are very low finding costs and, with technology, are growing reserves aggressively. This one is in the Permian Basin in Texas, one of the oldest US oil fields. They believe they have 8 Bakken zones stacked one on top of the other and have about 1200 drilling targets. A high growth company. His one concern is that WTI prices have been backing off in the last few weeks. While it has less impact on these companies that are finding oil, ultimately, if it gets tough enough, it will impact all oil stocks.