HOUSTON (Reuters) – U.S. shale producer Pioneer Natural Resources on Tuesday said it anticipated a non-cash gain of $576 million on oil and gas hedging contracts for the fourth quarter, according to a filing with the U.S. Securities and Exchange Commission.
The gain on hedges, which act as insurance contracts to lock in prices, follows a hit to earnings on the derivatives in the previous quarter. Many shale producers last year reported losses on hedges after oil prices climbed above anticipated levels.
Rival producer EOG Resources this week also said it expected to report a fourth-quarter, non-cash gain from hedges after reporting losses in the prior quarter.
Pioneer Natural will release its fourth-quarter earnings later this month. Wall Street analysts are anticipating the company to report an adjusted profit of $1.92 per share, down from $2.07 per share last quarter, according to data from Refinitiv. Last year, it reported a fourth-quarter profit of $1.22 per share.
Reporting by Liz Hampton; Editing by Dan Grebler