From: Wagner, Jonathan
Sent: Tuesday, April 14, 2020 10:26:21 AM (UTC-06:00) Central Time (US & Canada)
To: Wagner, Jonathan
Subject: U.S. Production Cuts Are Illusory, Pioneer Tells Railroad Comm. – Bloomberg
Pioneer Natural Resources CEO Scott Sheffield tells Texas Railroad Commission that U.S. production cuts are illusory and organic, with market-driven reductions mainly coming from lower growth and driving output down just a fraction from 12.3m b/d to 11.8m b/d.
- Additionally, so-called stripper wells — older wells at the end of their lives — will come back online very quickly as the oil price rises, he says
- Sheffield raises the idea of curtailing production by shutting in wells operated by companies that flare the most natural gas
- That’s something the Environmental Defense Fund has also floated
- The Railroad Commission has a notoriously lax position on flaring, having never denied a permit
- Cushing storage will be full in 4-5 weeks, he says
- Cutting 1m b/d Texas oil output will free up 30 million barrels of storage a month — thereby preventing the waste the commission is charged with avoiding, says Pioneer Executive VP Mark Berg
- Research firms he’s consulted all estimate demand destruction in the range of 20m to 30m bbl worldwide
Ion Energy Group
180 Maiden Lane 25th Floor
New York, NY 10005
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