American Oil and Gas Reporter - PBIOS 2016 Official Program Guide - 99

Permian Basin Reports
How has the upstream landscape for U.S.-based independents changed since Pioneer was formed? How do you
evaluate the overall opportunity set for independents today? What
are the main business challenges for independents going forward,
and are they considerably different from what PXD and its predecessor faced 10 or 20 years ago?

acterize the company's prospects for continued growth?
Pioneer has great rock, the right people to develop it, and the
balance sheet to support the development plan. We continue to
drive both capital and operating costs lower, reducing the breakeven cost of what is already one of the most economic fields in
the world. Pioneer has a tremendous inventory of wells in the Permian, and we can continue to grow at 15 percent for the next several years.
We continue to get more efficient with our drilling and completions operations, allowing us to put
more wells on with fewer rigs
and less capital. Pioneer's growth
will be driven by the Permian. We
have the best rock in one of the
world's most economic oil fields,
and a large inventory of wells to
work through.

Technology and innovation drove major advances for U.S.based independents over the span of my career, but clearly in the
case of Pioneer, the major
change was horizontal drilling
and completions in shale formations. That was the game
changer for us, and we are a different company today than we
were in 1997. From that time
through the early 2000s, we
were in Argentina, the Gulf of
Mexico, Alaska and Tunisia . .
. that would be unheard of for
a major U.S.-based independPioneer has estimated the
ent with assets in the Permian
resource potential of the
today.
Spraberry and Wolfcamp plays at
That said, many of the same
75 billion barrels of oil equivalent,
challenges and opportunities
remain. We still need to find
making it one of the world's largest
and hold good rock. We abfields. What is the cost of typical
solutely must maintain a strong
Spraberry and Wolfcamp wells
balance sheet. And we have to
Scott D. Sheffield has served as chief executive officer of
today? How do the plays stack up
Pioneer Natural Resources Company and its predecessors for
get the right people doing the
economically to conventional
more than three decades. He joined Parker & Parsley as a
right jobs. Many of today's
petroleum engineer in 1979, and later was promoted to
basins around the globe? Is it
opportunities lie in leveraging
chairman and CEO. When Parker & Parsley merged with Mesa
technology, data and processes
possible that unconventional oil
Petroleum to create Pioneer in 1997, Sheffield was named CEO
to continue to push the boundwill one day become the world's
of the new company. He has received numerous industry
aries of what is feasible and
lowest-cost supply?
honors and awards, including the Permian Basin Petroleum
what is economic. We have
Association's Top Hand Award and induction into the Permian
seen incredible change over
Our Wolfcamp wells are averBasin Petroleum Museum Hall of Fame. Sheffield holds a B.S.
the past few years in terms of
aging
between $6.5 million and
in petroleum engineering from the University of Texas.
the way we develop uncon$7.5 million to drill and comventional formations, and more
plete, and that is with larger comchange will come.
pletion jobs and longer (9,000 feet plus) laterals. These wells likeAdditionally, the industry faces an increasingly challenging
ly will produce in excess of 1 million boe in their life spans. Preregulatory environment, and independents will have to contintax production costs for our Permian horizontal wells are in the
ue to keep safety, environment and social responsibility at the top
$2-$4/boe range, which makes us competitive with some of the
of their priority list.
lowest-cost basins in the world, including Saudi Arabia.
I would say it certainly is possible to become the lowest-cost
supply. We are operating in the right basins with the right comThe Permian Basin is where it all began for Pioneer. Tobination of rock, infrastructure, access to markets, and technolday, the company holds a 785,000-acre lease position and
ogy. We have only just begun to unlock the potential of unconis one of the largest producers in the basin. What would you idenventional oil, with recovery factors below 10 percent of the oil
in place, so there is a lot of room to grow.
tify as the key to PXD's success in the basin? How would you char-

OCTOBER PBIOS 2016 99

American Oil and Gas Reporter - PBIOS 2016 Official Program Guide

Table of Contents for the Digital Edition of American Oil and Gas Reporter - PBIOS 2016 Official Program Guide