Pioneer Natural Resources warns of $832 mln derivatives loss

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Independent shale producer Pioneer Natural Resources PXD.N on Tuesday warned it would be hit by an $832 million second-quarter loss on oil and gas derivatives.

Many producers locked in sales when oil prices rose above $40 a barrel last year, but are now facing losses after crude prices jumped above $60 a barrel during the quarter Clc1.

For the first half of the year, Pioneer will face $1.523 billion in total net losses on derivatives, the majority of which stem from oil contracts, it said in a regulatory filing.

Last quarter, U.S. oil firms were expected to face an aggregate $7 billion in hedging losses, according to consultancy Enverus. Oil and gas producers use derivative instruments as a form of insurance to lock in prices for their future output.