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00:00Your thoughts on the deal . Yes. Thanks. Ouch. Always great to hear from you . I want. I do want to thank the president for getting involved with Putin and Mohammed bin Salman and bringing a historic deal to bear of nine point seven million bail they cut. The sad thing is probably not enough. I was surprised how weak the press releases came out of the G 20 and in regard to U.S. Canada and Brazil . It was a very weak three point seven million barrels a day. No really cuts 5 million from G. 20. No really cuts. I think that could have been the finishing touches. They would have put that part of the deal together I think would have been a homerun . As you see oil prices are up just a few pennies. Energy stocks are mixed today. And so we needed something more than 10 million barrels a day . So then to that point how much are you going to cut in relation to this deal voluntarily or involuntarily and will you cut extra . Yes we are testifying tomorrow. The Texas Railroad Commission we're asking for a 20 percent cut. We'll probably phase it back like open cars maybe go down to 10 percent a second month and third month it's one month at a time. So we're still asking the commission tomorrow. Both partially and pioneer for a 20 percent cut for the first month. As you know May and June are the worst month. It's a high very high storage. There is all the cuts you're hearing about from EIA and U.S. and Canada is just going to take a long time to see those cuts. We need some immediate troop cuts over the next 60 to 90 days. So we'll be asking for a 20 percent cut phased down to about a 10 percent . So last time we talked you and personally had just kind of brought this to light sort of asking all all Texas players to cut 20 percent. I asked you how everyone else felt about it and you didn't seem totally optimistic. But now that you have the president behind these cuts and the entire global oil community what is your read on what could happen . Yes it could go either way. We had about the same amount of pros versus cons. It was about 50/50 . We do feel sorry also for the medium and small producers. They are going to be totally disadvantaged. When George does get hit a lot of those companies will not be able to get their crude oil down to the Gulf Coast. Most of them are going to be shut in 100 percent. So it's totally dis advantaged marketplace. So we're doing it because of waste. Today you see the twenty three dollar for WTI. We're really getting six dollars less. It's called the storage effect. So we're really getting 17 per Midland and we're getting about eleven to twelve dollars in the Delaware. So selling all at that price is a waste and that's what the commission started back in 1929. Preventing waste is why they made their historic decisions in 1932 . So Scott does that mean that if does this deal as is prevent single digit six dollar a dollar nine dollar oil prices . I think it still could. I think the nine point seven million barrels is not going to be enough. It's sort of late as you know. It's sad. We had to go through the last six to eight weeks since the meeting in Vienna. We lost probably a good 10 to 15 dollars. And we need to do we need to take the next step . The G 20 really needs to come through on some troop cuts. In my opinion . So can you give us some insights got into how quickly you can turn on and off production so let's play this out. Texas Railroad Commission tomorrow you testify is an agreement . Everyone cuts 20 percent. How soon does that come off the market . We're asking to start May 1st. So as long as they make a decision they have a another tentative date on April 21st to make that decision. I would also tie it to help from. They do make the decision. I think it's important to tie it to Brazil tied to Canada asking for other G. 20 help. That agency just Texas do it by itself. We've already got the nine point seven . I'd say tie it to the G 20 more cuts from the G 20. Let's get a bigger cut and let's get the price all back up to. We need 30 dollar all to really save the industry. Not twenty three . Scott if you take a look at the curve many analysts see short term prices kind of out of luck. But if you go down the curve this kind of cut could actually mean a lot more higher prices later. Twenty twenty one twenty twenty two. If you get thirty forty dollar oil do you turn production right back on . No you were at 30. All you will turn on most your margin well so is about nine or a thousand barrels a day that the guy has coming off in there. In their analysis in their report. And that's coming off at sixteen dollar all most of it. But you get back to 30 you term most of that production on a lot of it that that small and medium producers that has those wells it saves their lives it saves those companies it saves from employees . So that 30 dollar oil is so much more important than 20 to 23 . And so that's why it's important to continue these cuts and get a bigger cut a true cut out of the G 20 . It was a what's really been so stark has been the relationship of President Trump to this whole deal. Have you talked to him . What's your relationship like. And you me some insight into how he sort of turned around from we like low oil prices to intervening quite materially into this deal . Now I have not talked to him but we have sent several messages . The industry has. We have a pioneer impartially both through Treasury both through DLC both who are our senators Cruz and Cornyn. So we sent several messages how important it is for him to get involved in this industry . This probably not should happen about three or four weeks ago but the cut of nine point seven is not going to help the storage situation in the Gulf Coast and in Cushing. It's going to fill up by May 15 and we're going to see very very low prices at least for the next 90 days .

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Pioneer CEO to Argue for 20% Cut to Texas Oil Production in May

U.S. shale needs a $30 oil price to really save the industry, says Pioneer Natural Resources Chief Executive Officer Scott Sheffield. He discusses the historic OPEC+ output cut and the need for a mandatory production cut in Texas with Bloomberg’s Alix Steel on "Bloomberg Markets." (Source: Bloomberg)

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