Two of Permian Basin’s most active oil companies, Parsley Energy of Austin and Pioneer Natural Resources of Irving, in a letter to the Railroad Commission of Texas Monday asked the commission to conduct an emergency meeting on market demand and to order production cuts as record low crude prices threaten thousands of jobs. The request came as U.S. benchmark crude settled Monday just above $20 – nearing a two-decade low – as a global price war and coronavirus pandemic combine to slash prices. The commission cancelled a meeting scheduled Tuesday and is not scheduled to meet again until April 21. Matt Gallagher, CEO of Parsley, said, “The situation requires urgent and immediate action… We need leadership from Texas.” Gallagher and Pioneer CEO Scott D. Sheffield requested a meeting no later than April 13 with production cuts to take effect in May.
Gallagher and Sheffield said the move to limit production “would be a responsible measure in the public interest,” and they sent letters to Gov. Greg Abbott, Lt. Gov. Dan Patrick, and senators John Cornyn and Ted Cruz.
Steve Pruett, president and CEO of Elevation Resources, told Midland Reporter Telegram that crude oil purchasers could force a slowdown. With storage facilities and pipelines filling, Pruett said pipeline companies are sending curtailment letters to producers.
Commission chairman Wayne Christian and commissioner Christi Craddick, according to Texas Tribune, have not publicly commented on reducing production, but commissioner Ryan Sitton reportedly supports the prospect. A spokesman for Christian told the Tribune, “He believes we should act in collaboration with other states and the federal government, not unilaterally.” And Todd Staples, president of Texas Oil and Gas Association, reportedly opposes the idea.