Pioneer Betting on Oil

Pioneer Natural Resources announced “plans to sell 12 million new shares to help finance a 14 percent budget increase and a sixth straight year of higher production.” The shares will be priced at $117, a 6.5 % discount from the closing price on Jan 5th. The goal is to fund the 2016 drilling budget. Wells in the Permian Basin have outperformed expectations and Pioneer is betting on the returns outweighing the low oil price. The plan for the stock sale is to raise cash to support the $2.4-2.6 billion drilling budget for 2016.