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Executives from three of the biggest independent U.S. drillers say they won`t increase activity just because prices rise after the Organization of Petroleum Exporting Countries and its allies agreed to extend output curbs. The emphasis. instead. will be on maintaining spending discipline and generating profits to return to investors. according to Pioneer Natural Resources Co.. Parsley Energy Inc. and Newfield Exploration Co.
While crude is trading near the highest level in more than two years as OPEC and its partners limit supplies in a bid to drain a global glut. investors have been concerned stronger prices would encourage U.S. drilling and undermine those efforts. The biggest oil crash in a generation began in 2014 as a boom in American shale output spawned a race for market share between global producers.
`Higher oil prices can bring in more cash to the balance sheet. and you can enjoy that cushion. but there`s no need to chase additional activity.` Matt Gallagher. Parsley`s chief operating officer. told Bloomberg on the sidelines of Van Eck Associates Corp.`s U.S. Shale Forum in Singapore. `It`s paramount that you`ve got to be disciplined and give visibility on spending.`
That`s not to say the companies won`t grow. Pioneer. which drills in the Permian Basin and Eagle Ford shale plays. plans to boost output from about 300.000 barrels of oil equivalent a day this quarter to more than 1 million by 2026. Chief Financial Officer Richard Dealy said. Parsley also drills in the Permian. while Newfield is focused on the SCOOP and STACK plays in Oklahoma.
