By David Wethe
Although the U.S. crude benchmark jumped above $50 a barrel this week for the first time since February after Saudi Arabia said it will cut output in the next two months, Sheffield said that Pioneer’s current production plans are unchanged.
“I never anticipate growing above 5% under any conditions,” Sheffield said. “Even if oil went to $100 a barrel and the world was short of supply,” the economics wouldn’t support adding rigs because service costs would cut into margins, he said.
The CEO predicted more industry consolidation could occur this year if oil stays above $50 a barrel, allowing companies to improve balance sheets.
While Pioneer is focused on completing its recent acquisition of Parsley Energy Inc., the door isn’t closed to other acquisition opportunities in the Permian Basin, he said. The company had considered buying closely-held Endeavor Energy Resources LP but decided a deal couldn’t be done.
“Anything else we would look at after bringing in Parsley has got to be double-digit accretion that’s got to be in the Permian Basin,” he said. “The chances of doing deals like that are slim.”