Pioneer Natural Resources warns of $832 million derivatives loss

By Liz Hampton

(Reuters) - Independent shale producer Pioneer Natural Resources 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.

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.

Shares of Pioneer were down almost 2% in early trading.

Pioneer will release its second-quarter earnings on Aug. 2.

(Reporting by Liz Hampton in Denver; Editing by David Holmes)