For Pioneer Natural Resources (NYSE:PXD) investors, 2014 was a tale of two half-years. Robust oil prices and strong production growth pushed Pioneer's stock higher by well over 25% through the first half of the year. However, as the following chart shows, when the price of oil rolled over during the second half of the year, it took Pioneer Natural Resources' stock down with it.

PXD Chart

PXD data by YCharts.

Pioneer's stock ended the year down 15.7% as the price of oil crashed nearly 44%. That said, things could have been far worse -- many other oil stocks fell as much as, if not more than, the price of oil. Here's why Pioneer Natural Resources' stockholders didn't encounter that same fate.

Refining the machine
Pioneer Natural Resources began 2014 with a plan to grow production by 14%-19%. That was a rather wide range, but the company wanted to be conservative as it was still fairly early in drilling horizontal wells into the Permian Basin. However, by the end of the second quarter the company was growing better at drilling new wells, so it tightened its production growth guidance range to 16%-19%. Pioneer also beat second-quarter earnings estimates and noted that it was seeing strong production from new wells, which was pushing up the estimated ultimate recovery of future wells.

For the third quarter, Pioneer Natural Resources again beat earnings estimates and again narrowed its production growth guidance. This time the company put its production growth guidance at 18%-19% while also estimating it would increase output by 16%-21% through 2016. However, it was during the third quarter that oil prices began a steady decline that does not yet appear to have bottomed. This development has raised questions about Pioneer's growth potential, as the company is unlikely to have the money to grow as fast as its previous guidance indicates.

Photo credit: Courtesy of Pioneer Natural Resources, Sands Weems-Photographer.

Being proactive
Reacting quickly to the drop in oil prices, the company shored up its balance sheet by raising $1 billion in equity capital shortly after its third-quarter report. On top of that, Pioneer announced that it would sell its interest in an Eagle Ford shale midstream business, a move that could eventually net it upward of $1.2 billion more. Even more recently, the company shored up an unexpected weakness in its hedging program by locking in the price for 85% of its oil production for 2015.

Pioneer Natural Resources is making sure it can survive the worst of the current downturn in the oil market so that it can thrive once the situation improves. This has kept its stock from sinking too far, even though it is quite pricey when compared to its peers and its own historical valuation.

Investor takeaway
Operationally, Pioneer Natural Resources had a fine year in 2014 as it exceeded earnings expectations thanks to strong oil production. However, the crashing price of oil knocked a lot of the enthusiasm out of the stock. Nonetheless, the company is to be commended for positioning itself to survive the current downturn so that it can thrive whenever the market turns around.