Shale producer Pioneer Natural Resources to cut executive ranks

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HOUSTON (Reuters) – Pioneer Natural Resources said on Tuesday it has asked nearly a third of its executives to leave their jobs as the U.S. shale producer continues to trim costs and considers selling more assets.

The company expects to save $100 million annually with the job cuts and a new organizational structure, Chief Executive Scott Sheffield said during an earnings call. The Irving, Texas-based oil and gas producer expects to shed the employees on a voluntary and involuntary basis by June 1.

Shale firms have pushed U.S. oil output to record levels. But years of heavy spending led to investor pressure to reduce spending and use the cash to pay dividends and repurchase shares.

“The big change is to treat capital just as important as production,” Sheffield said.

Pioneer’s stock was trading 6.8 percent lower at $145.71 around midday on Tuesday after Sheffield said he did not expect a wave of consolidation in the industry.

The stocks of producers focused on the Permian Basin bounced in April when Chevron Corp revealed it had agreed to pay $33 billion for Anadarko Petroleum Corp. Occidental Petroleum Corp then made a $38 billion hostile bid for Anadarko.

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Pioneer shares traded at $150.92 the day before the Chevron-Anadarko deal, but closed at $168.32 the day it was announced.

“I didn’t come back to sell the company,” said Sheffield the company’s founder, who returned as CEO after veteran executive Tim Dove abruptly retired in February. “I personally don’t think that there’s going to be a lot of (mergers and acquisitions) over the next one to two years.”

On Monday, Pioneer reported its first-quarter profit jumped to $350 million, or $2.06 per share, from $178 million, or $1.04 per share, a year ago.

The company did not say how many executives will leave and did not respond to a request for comment.

It plans to sell a share of its gas processing infrastructure and may sell its water infrastructure, Sheffield said. On Monday, Pioneer disclosed it had sold its Eagle Ford Shale acreage and remaining assets in South Texas for up to $475 million to become a purely Permian Basin producer.

Reporting by Jennifer Hiller; Editing by Paul Simao