In light of falling oil prices, Pioneer Natural Resources has made the decision to sell off a pipeline in the Eagle Ford Shale in order to continue operating efforts in the Permian Basin.
Dallas Business Journal reported that Pioneer CEO Scott Sheffield made the announcement during a conference call with investors. In addition to the pipeline, the company will also offer up $1 billion in stocks.
It allows Pioneer to really prudently develop its assets in what I believe could easily be a $70 to $80 (per barrel) oil price environment over the next two years,” said Sheffield.
Although the Irving, Texas-based company is one of the most prominent Eagle Ford players, the business has seen its equity drop 25 percent since oil prices started diminishing roughly four months ago. In July, oil prices still floated above $100 per barrel versus the $70-75 reality facing companies today.
This is perhaps the biggest move among more to come from oil producers in the United States. Saudi Arabia’s fierce competition in oil production and selling prices has finally started to discourage unconventional shale companies in the states. In addition, with Saudi output still high in the figures of around 9.6 million barrels a day and potential price gauging in oil exports to the United States, America’s shale boom is in for a jagged price war reality.