OREANDA-NEWS. Pioneer Natural Resources boosted its production guidance for the fourth quarter of 2015, driven by new rigs in its Spraberry/Wolfcamp acreage in the Permian basin.

Output should be 213,000–215,000 b/d of oil equivalent (boe/d), higher than previous guidance of 206,000-211,000 boe/d.

Pioneer has been an outlier in an industry that has sharply pulled back drilling activities following the plunge in crude prices over the past year.

The Permian basin is the only major US field where production continues to rise despite depressed commodity prices because of lower extraction costs. Several companies have decided to concentrate on the Permian while selling off assets in other fields.

Pioneer expects full-year 2015 production growth of 12pc compared to 2014, an increase from previous guidance of 11pc.

The producer kept its capital expenditure (capex) budget for 2015 unchanged at $2.2bn. But the company said its 2016 budget will increase to $2.4-$2.6bn.

Production growth this year is expected to be 10pc-15pc compared to 2015.

Pioneer placed 44 Spraberry/Wolfcamp horizontal wells into production in the fourth quarter, including 35 wells in its northern acreage and nine wells in the southern Wolfcamp.

Pioneer expects to continue operating 18 horizontal rigs in the Spraberry/Wolfcamp in 2016 because well returns in the area continue to be good in the current low commodity price environment.

The company's horizontal rig count in the Eagle Ford shale in south Texas will be cut to four rigs in 2016 from six in 2015 and could potentially decrease further if low prices continue to adversely affect well returns.

Pioneer will sell 10.5mn shares of its common stock and also expects to grant underwriters an option to purchase up to an additional 1.575mn shares.

The company will use the proceeds for "general corporate purposes" including continuing to develop its acreage in the Spraberry/Wolfcamp while maintaining a strong balance sheet during the current period of low prices.

Pioneer last month said it raised $1bn in new debt to meet general corporate expenses and repay earlier debt amid a squeeze in cash inflows.

Of the total, $500mn will mature in 2021 and the remaining in 2026. The independent will repay existing senior notes due 2016 and 2017.

Pioneer generated operating cash flow of $789mn in the first nine months of 2015 compared with $1.8bn a year earlier. Its total spending, including capital spending and net asset divestments, was $1.2bn versus $1.6bn a year earlier.