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



Jonathan Wagner

Ion Energy Group

180 Maiden Lane 25th Floor

New York, NY  10005

Direct: 212-709-2261

Cell: 914-843-6986




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