for Pioneer Natural Resources
Shale executives have repeatedly proclaimed their commitment to capital discipline, promising not to return to profligate spending in pursuit of growth at all costs. But output is growing sharply, poised to reach 12 Mbd in 2019.
Independent producers are struggling to hit output targets at current price levels while the majors are focusing on becoming more efficient.
With so much focus on OPEC cuts and shale growth as of late, declines at existing fields and demand increases from low prices mean that a supply gap will eventually form, even if the rosiest scenario pans out in the Permian.
Small independent shale producers are dealing with a the possibility of another oil price plunge with aggressive hedging, a development that should allow output to grow.
Even though the oil market has risen considerably since February, bankruptcies, staff layoffs, capital expenditure cuts, and falling productivity continue to be commonplace during the price downturn that has so far lasted for seven straight quarters.
As oil prices head towards $30 per barrel, oil companies are forced to use layoffs, asset sales, capex cuts, and debt in order to survive.