(Reuters) - Pioneer Natural Resources Co (PXD.N), a U.S. shale oil company, on Wednesday reported a smaller than expected quarterly loss and said it would slash by half the number of rigs it operates to 12 in response to the collapse in crude prices.
A more than 70 percent slide in crude prices to around $30 a barrel has prompted exploration and production companies like Pioneer to slash investment in new wells. Despite Pioneer’s cuts to its rig count, the company sees output growing 10 percent this year as wells produce more than expected.
The Dallas company plans capital expenditures for 2016 of $2 billion, down from its preliminary forecast of $2.4 billion to $2.6 billion and 2015 spending of $2.2 billion.
Pioneer posted a fourth-quarter loss of $623 million, or $4.17 per share, compared with a profit of $431 million, or $2.92 per share, in the year earlier period.
Excluding one-time items and derivative losses, Pioneer had a per share loss of 18 cents. Wall Street analysts had anticipated a loss of 30 cents per share, according to Thomson Reuters I/B/E/S.
Pioneer produced 204,000 barrels of oil equivalent per day (boepd) in 2015, along with 215,000 in the fourth quarter, with oil accounting for slightly more than half its total output.
The company which drills in Texas said it planned to slash horizontal drilling activity by 50 percent over the course of 2016, taking all six of its rigs in the Eagle Ford shale play out of production, and cutting six other rigs in different locations.
Pioneer began production at 44 horizontal wells in the Permian Basin during the fourth quarter of 2015 and said initial output was “exceeding expectations.”
Reporting by Anna Driver and Luc Cohen in Houston; Editing by David Gregorio and Andrew Hay