Pioneer Natural Slashes 2020 Capex By 45%, Expects $500M FCF
Zacks Investment Research | Mar 17, 2020 12:17AM ET
Pioneer Natural Resources Company (NYSE:PXD) recently announced its plan to reduce 45% of its capex guidance for 2020 drilling, completion and facilities to the tune of $1.6-$1.8 billion, from its prior guidance of $3-$3.3 billion. The move comes at a time when the ongoing turmoil in the hydrocarbon market slashed oil prices. Moreover, the company will likely cut its water infrastructure expense to $100 million.
Pioneer Natural expects its capital spending to be funded by cash flow from operations, which is expected at $2.3 billion. Notably, the company anticipates generating $500 million of free cash flow from operations if WTI Crude prices average at $35 per barrel for the rest of the year. The free cash flow will likely be used for dividend payments and maintaining balance sheet strength. As of Dec 31, 2019, the company’s long-term debt summed $1,839 million, reflecting a debt-to-capitalization ratio of 15.9%, much lower than the Zacks Investment Research
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