Policy & Regulations

Texas Oil Industry Discusses Opening ‘Pandora’s Box of Proration’

Some oil companies, without support from many of their peers, are asking Texas Railroad Commissioners to cut oil production by 20%.

Velda

Addison

Hart Energy

Wed, 04/15/2020 - 07:53 AM

Drilling activity takes place in the Texas Panhandle. (Source: Jim Parkin/Shutterstock.com)

Drilling activity takes place in the Texas Panhandle. (Source: Jim Parkin/Shutterstock.com)

Texas Railroad Commissioners are digesting nearly 10 hours’ worth of testimony received during a public hearing April 14 as they consider whether to mandate a 20% oil production cut or let market forces play out without intervening.

A decision on the request, brought by Permian Basin players Pioneer Natural Resources Co. and Parsley Energy Inc., could come April 21 when the three-person regulatory panel meets again. Much is riding on the decision that would remove about 1 MMbbl/d of Texas production from the oversupplied global oil market amid a pandemic that has slowed demand.

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Texas/La Gulf Coast

Velda Addison

Velda Addison is the senior editor of digital media for Hart Energy’s editorial team. She covers exploration and production.

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