U.S. shale producer Pioneer Natural Resources Co. expects oil prices to recover to at least $45/bbl this year, its chief executive said May 7 during a call with investors.
Producers slashed output and energy companies cut tens of thousands of jobs as plummeting demand for fuels and a global supply glut sent prices below $20/bbl last month. At that level, few U.S. shale producers would be able to cover their production costs.
RELATED:
$42/Bbl Crude Oil Price in a Month? Here’s How it Could Happen
Texas Grants Oil Producers Regulatory Relief, Not Proration
Even when U.S. benchmark prices return to $45/bbl, "very few" U.S. producers would be able to afford to expand production because of high debt levels, said Pioneer CEO Scott Sheffield.
U.S. and international oil futures were trading about $25.75 and $31 per barrel, respectively, on May 7.
"There will probably only be a handful of companies that can grow, maybe five in my opinion, in the $45 to $50 WTI and Brent world," Sheffield said of his shale oil counterparts.
Sheffield recently called for Texas energy regulators to mandate 20% production cuts to reduce the supply glut. Pioneer plans to take about 3%, or 7,000 bbl/d, of existing oil production off the market.
Its total output of oil and gas will be about 11% below a target set earlier this year.
"We had the benefit to be able to move all of our crude oil on the Gulf Coast and export a lot of it," he said. Other shale producers have cut a larger portion of their production because of a lack of pipeline transport to export hubs, he said.
Pioneer earned $289 million, or $1.74 per share, in the first quarter ended March 31, down from $350 million, or $2.06 per share, in the same period a year ago. Adjusted per share earnings of $1.15 topped Wall Street's $1.11 estimate.
Recommended Reading
Tech Trends: Halliburton’s Carbon Capturing Cement Solution
2024-02-20 - Halliburton’s new CorrosaLock cement solution provides chemical resistance to CO2 and minimizes the impact of cyclic loading on the cement barrier.
NAPE: Chevron’s Chris Powers Talks Traditional Oil, Gas Role in CCUS
2024-02-12 - Policy, innovation and partnership are among the areas needed to help grow the emerging CCUS sector, a Chevron executive said.
TotalEnergies Starts Production at Akpo West Offshore Nigeria
2024-02-07 - Subsea tieback expected to add 14,000 bbl/d of condensate by mid-year, and up to 4 MMcm/d of gas by 2028.
Well Logging Could Get a Makeover
2024-02-27 - Aramco’s KASHF robot, expected to deploy in 2025, will be able to operate in both vertical and horizontal segments of wellbores.
Shell Brings Deepwater Rydberg Subsea Tieback Onstream
2024-02-23 - The two-well Gulf of Mexico development will send 16,000 boe/d at peak rates to the Appomattox production semisubmersible.