America’s Saudi Arabia? Why Investors Are Still Hot On The Permian Basin – Forbes

A year ago, U.S. oil production topped out at 9.6 million barrels per day. By last month, output had fallen to 8.5 million bpd. More than 10% of supply, lopped off in one year.But Scott Sheffield doesn’t think America’s frackers will be down for long. The CEO of Pioneer Natural Resources said on his quarterly earnings call last week that Pioneer’s 800,000 acres in the Permian basin of west Texas were so economic that “definitely we can compete with anything that Saudi Arabia has.”Sheffield said that Permian production costs had fallen to $2.25 per barrel, a price so low that the region will keep growing no matter how low the price of West Texas Intermediate crude goes. “My firm belief is the Permian is going to be the only driver of long-term oil growth in this country, and it’s going to grow on up to about 5 million barrels a day from 2 million barrels.” That’s enough to replace all our declines, and then some.

Source: America’s Saudi Arabia? Why Investors Are Still Hot On The Permian Basin – Forbes

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