UPDATE 2-Pioneer Natural quarterly profit beats on higher oil prices

(Reuters) – U.S. shale producer Pioneer Natural Resources Co (PXD.N) beat analysts’ estimates for third-quarter profit on Tuesday on higher oil prices and said it expects its Permian basin output to rise.

The company expects fourth-quarter production from the basin to be between 293,000 barrels oil equivalent per day (boe/d) and 303,000 boe/d. Pioneer Natural produced 288,000 boe/d from the region in the reported quarter.

Tight pipeline capacity has pushed the price of crude from the region lower, forcing some operators to slow down production activity or look at other oilfields to boost output.

However, Houston-based Pioneer has benefited from contracts to transport its oil and gas from the Permian to the U.S. Gulf Coast, where they fetch higher prices.

The company’s average realized prices for a barrel of oil jumped 27 percent to $57.54 in the reported quarter. U.S. crude prices rose 45 percent from a year earlier, to about $75 a barrel at the end of the third quarter.

Pioneer said it had an incremental cash flow of $200 million in the third quarter, due to the transportation contracts.

The company reported $135 million in hedging losses in the quarter. Like many of its peers, the company’s earnings have taken a hit from losses on hedging contracts, which has kept it from fully realizing a surge in oil prices.

Total production rose 16 percent to 320,659 boe/d.

Net income attributable to the company was $411 million, or $2.39 per share, in the quarter ended Sept. 30, compared with a loss of $23 million, or 13 cents per share, a year earlier.

On an adjusted basis, the company earned $2.07 per share, beating analysts’ estimate of $1.67, according to IBES data from Refinitiv.

Reporting by John Benny in Bengaluru; Editing by Shounak Dasgupta

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