Best U.S. Oil Stocks To Buy #4 — Pioneer Natural Resources
The Eagle Ford and Bakken aren’t the only places helping produce mammoth amounts of oil and natural gas. The prolific Permian Basin — located in West Texas and New Mexico — is also quickly becoming a hotspot of activity.
And leading the way is Pioneer Natural Resources (PXD).
PXD holds more than 900,000 gross acres and more than 7,000 wells in the region. While most of those are conventional wells located in the West Spraberry field of the Permian, Pioneer has recently commenced a program of unconventional drilling in the shale field’s Wolfcamp Basin. In total, PXD predicts that it has nearly 10 billion barrels of potential resources in the play. Current production is only about 93,000 barrels a day.
To tap that potential, PXD plans on spending 76% of its $3 billion in CAPEX spending for 2014 tackling unconventional wells in the Wolfcamp and Spraberry.
While PXD shares aren’t exactly cheap — currently trading at P/E of almost 30 — the company is the leader when it comes to fracking the Permian. So, that premium is perfectly justified.