Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Vista Projects
Copper Tip Energy Services
Copper Tip Energy
Vista Projects


Consolidation needed to quell U.S. shale production


These translations are done via Google Translate

The shale industry needs more consolidation to curb volume increases from smaller producers, Scott Sheffield, chief executive officer of top U.S. shale producer Pioneer Natural Resources (PXD.N), said on Wednesday.

Privately-held firms have been adding rigs and increasing oil and gas production in the Permian Basin of west Texas and New Mexico this year, potentially undermining the efforts of publicly-traded companies to focus on shareholder returns over volume growth when the market is well supplied.

“I hope other privates are taken out that are growing too much,” Sheffield told investors on an earnings call. He was responding to a question on whether Pioneer’s deal-making contradicted the company’s philosophy of not adding to global oil supply.

U.S. oil prices have climbed to almost $66 a barrel , from under $20 a year ago, helped by coronavirus vaccine roll-outs and output cuts from the Organization of the Petroleum Exporting Countries (OPEC).

Sheffield said an uptick in drilling by private firms is not yet at the point when it could undo the impact of supply curbs in place by OPEC.

 

 

Entelec Conference and Expo 2024
ROO.AI Oil and Gas Field Service Software
GLJ

Shares of Pioneer were up 3% by midday to $163.32.

Pioneer aims to expand its output at about 5% annually, adding one or two drilling rigs. Some publicly-traded peers, such as Diamondback Energy (FANG.O), have said they plan to hold production flat through 2021.

Pioneer this week closed a $6.4 billion acquisition of privately-held DoublePoint Energy, a few months after acquiring rival Parsley Energy for $4.5 billion.

Analyst Paul Sankey in a report Wednesday said attitudes towards the DoublePoint deal among his clients had been negative because Pioneer previously had implied that no additional acreage was needed as a result of its Parsley Energy purchase.

Sheffield on Wednesday said public oil companies, including Chevron Corp (CVX.N) and Occidental Petroleum are marketing Permian assets.

Reuters this week reported Chevron was marketing about 73,000 acres and production in New Mexico. Occidental did not immediately respond to a request for comment. read more



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE