Sunny Sunday afternoon reading…

Very interesting podocast/transcript with Scott Sheffield, Chairman and ex-CEO of Pioneer Natural Rescources…

Pioneer is listed as number one, lowest breakeven, $19 — $20 breakeven price. And so, anything about $20, you start getting your money back. So, you really need something to get a 10%, 15% return. You need something probably in the mid 30s, long term. And the company has come out recently over the last 12 months saying it’s going to a million barrels a day plus and it could easily do that at $45 oil price flat for the next 10, 20 years…

[on Permian growth:]

And I think this year will probably be more in the 1.3 million barrels a day from year end 2017 to year end 2018, we’ll grow about 1.3 million barrels a day. And roughly about 800,000 will be from the Permian. We had about 800,000 from the Permian last year, of oil. Probably they have another 800,000, it can be a little bit higher. There are some issues I’ll talk about later with you, the backwardation, the constraints, pipeline constraints, people constraints, but I’m predicting another 800,000 long term in our discussion. Long term, Permian basin will get up to somewhere — seven million barrels a day, it could go higher. But at least seven in the next 10 years from the 3.2 that you mentioned earlier….

A long way to go. We’re only drilling three benches. There’s about 12 benches of that 4000 feet of Shale and people are only focused on three of those benches. So, we’ve got another nine benches of Shale formation to drill as we play out the Permian basin over the next several years..

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