Pioneer Natural cuts budget almost in half
Pioneer Natural Resources Co. has cut its 2020 drilling, completion and facilities budget by 45% and expects it to range between $1.6- to $1.8 billion. The company is also reducing its budgeted water infrastructure spend to $100 million, resulting in a total 2020 budget range of $1.7- to $1.9 billion.
The updated capital program will be funded from forecasted cash flow of $2.3 billion and generate free cash flow of $500 million, assuming WTI oil prices average $35 per barrel for the rest of the year.
As part of the plan, Pioneer will reduce its operated rig count from 22 to 11 within the next two months. It’s also reducing its contracted completion crews from six to two to three during the same timeframe. Management expects full-year 2020 oil production to be similar to the company’s 2019 Permian oil production average of 211 thousand barrels of oil per day (MBOPD).
“As they have in the past, global headwinds and macroeconomic factors are impacting commodity prices,” Scott D. Sheffield, President and CEO, said in a written statement. “After successfully managing through the previous five cycles, it is apparent to me companies that maintain strong balance sheets and low leverage during these difficult times will prosper when economies eventually rebound and commodity prices recover.”