Irving-based Pioneer Natural Resources said Feb. 16 it plans to operate an average of 22 to 24 horizontal drilling rigs in Midland Basin in 2022. The 2022 capital program is expected to place 475 to 505 wells on production. Average lateral length of wells will increase from 10,000 feet to 10,500 feet in 2022. Pioneer forecasts 2022 oil production of 350,000 to 365,000 b/d and total production of 623,000 to 648,000 boed. Production in 2022Q1 is forecast at 348,000 to 363,000 b/d of oil and 620,000 to 645,000 boed. The company plans a 2022 capital budget of $3.3 billion to $3.6 billion (after $3.4 billion in 2021, including placing 534 horizontal wells on production).
Scott D. Sheffield, CEO, said, “Our deep Midland Basin inventory of high-return well locations, coupled with best-in-class margins and operating efficiencies, provides attractive corporate returns that generate durable cash distributions through commodity price cycles. The company’s high-return asset base and low-cost structure, combined with our leading ESG practices, continue to drive significant value for Pioneer shareholders.”
Speaking to analysts and investors on a conference call Feb. 17, Sheffield said regulators should increase efforts to limit flaring in Permian Basin, especially by private operators. He said many Permian operators have limited flaring to less than one percent of gas withdrawals. “We need to rein in the privates through regulation, whether it’s EPA, state or investors,” he said. Pioneer boasts of some of the sector’s lowest greenhouse gas emissions rates, but Sheffield noted higher flaring rates of private companies, who don’t face as much scrutiny on environmental issues as their public peers. He said private operators also are expecting to grow production more aggressively than Pioneer.
He told Bloomberg that U.S. shale lacks the capacity to “come to the rescue” of consumers facing high energy prices with much more oil production. He said only OPEC countries such as Saudi Arabia and UAE can meaningfully increase production quickly in the wake of supply shortages. U.S. shale is constrained by labor shortages, increases in production costs, and demands by shareholders to return cash.