Replies to post #26 on Pioneer Natural Resources Company (PXD)

[OilStockReport]

Looks like they are going to see continued upside as well.

Although I have not been covering many of the MLP's, it is hard to discount the run these names have had, all while paying large dividends. Pioneer Southwest Energy Partners (PSE) is one of those names. This company was formed by Pioneer Natural Resources Company (PXD) and now has non-operated interests in over 1100 wells in the Spraberry field. These assets are located in the coveted Permian Basin of west Texas. As of the end of 2010, Pioneer Southwest had approximately 52 MMBoe, which is up 8 MMBoe from 2009. Some 85% of these resources are liquids. Average daily production for 2010 was 6507 Boe. This year, Pioneer Southwest plans to drill 40-45 wells on a two rig program. Well costs are estimated at $1.4 million. Pioneer Southwest is estimating production growth of over 5%. Investing in MLP's does pose many questions going forward. Although tax implications make MLP's favorable investments, they are also heavily hedged to support the large dividend. If an investor believes that oil prices will continue to make new highs for some time, and is looking for much larger possibilities for growth, this may not be the investment for you. But if an investor is looking for income, or would like protection to the downside with his/her investments, it may be the way to go. Either way, MLP's will continue to benefit from higher prices, and will be shielded by large dips in pricing to the downside.

[Timothy Smith]

$PXD - One of BP Capital's latest major position in support of the oil bull market.

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