Pioneer profits on higher production

Profits: Pioneer, led by Scott Sheffield, posts strong quarter

US independent Pioneer Natural Resources posted a narrow quarterly profit on Monday and said its first cargo of condensate from the Eagle Ford shale oil play was exported in late July.

Pioneer reported earnings of $1 million in the three months that ended in June, down from $351 million a year earlier.

The fall was primarily due to income lost from discontinued operations in Alaska and the Barnett shale in Texas.

"Without the effect of non-cash derivative mark-to-market losses and other unusual items, adjusted income for the second quarter was $195 million after tax," Pioneer said.

Revenues for the 2014 quarter totalled $953 million compared to $1.16 billion a year earlier, due primarily to a $218 million hit from derivative losses. Derivatives gained Pioneer $144 million in the 2013 quarter.

Production came in at just under 183,000 barrels of oil equivalent per day, which beat many analysts' expectations. The production mix was more gas heavy than in previous quarters because of improvements in processing efficiency, Pioneer said.

The company also reported a strong result from its first Wolfcamp D well in Upton County, the University 3-19-31H, which was placed on production in the second quarter.

The well, drilled with a 9927-foot lateral, hit a peak initial 24-hour rate of 2103 boepd (68% oil).

Meanwhile, Pioneer said it shipped its first cargo of condensate from the Eagle Ford - about 400,000 barrels - following an updated interpretation of US rules governing exports of crude oil.

It said prices on monthly condensate shipments are expected to exceed domestic oil prices through the end of the year.

"International interest for our processed Eagle Ford shale condensate is growing, particularly from Asian petrochemical companies," chief executive Scott Sheffield said.

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