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00:00Scott you were speaking on the analyst call after your most recent quarterly report earlier this morning saying that oil could easily go to one hundred and fifty dollars in a bear a barrel in the coming months but that that won't change your production plans and your growth rate of 5 percent a year. If other players in the shale patch don't follow suit where is that going to leave. Pioneer. Yeah. Thanks, Kailey. great to be with you today. We have committed to our long term shareholders. We'll be growing 0 to 5 percent regardless of the oil price. Obviously we're going to be sending 80 percent of our cash flow back in form of dividends to our investors. In addition where we've announced a four billion dollar stock buyback. So it's been well received. Both the dividend and the stock buyback in that regard will continue. That fourth quarter we sent over 100 percent of our free cash flow back to the investor. About half the independents the public independents are adhering to that zero to 5 percent. The few privates are growing faster than I have stated publicly. They're their inventory will be depleted depleted fairly quickly going forward. So I just don't see U.S. production contributing the amount of barrels that it has as it has over the last several years. Scott it's guy I can just talk to me about how you think the private operators should be quote reined in. What does that actually look like. No I showed this is a flaring chart from Rice did they collect collected data from all the shale basins from the regulatory bodies in each state and we still have several privates well over 1 percent flaring. We need to rein them in a combination of both state regulatory bodies and EPA under the federal guidelines the federal bodies and also investors whether they're bond investors private equity investors or public investors the privates need to rein in so we can reduce that black eye in these shale basins. Well Scott a story we've been following over many weeks and once again today is geopolitics the situation on the border with Ukraine and potential Russian action which of course Russia denies. Should there actually be armed conflict. Should that result in a disruption of energy flows. Would pioneer in that scenario potentially increase production to help make up any potential shortfall. No pioneer will stay with our plan. We announced a cap ex plan as I said regardless of whether it's a hundred fifty dollar oil two hundred dollar oil or a one hundred dollar all. We're not going to change our growth plans. It's going to be up to Saudi and UAE. They have a pact with OPEC. Plus they probably are about the only two countries that could change that. And they'll have to decide what to do in this scenario. If Russian oil is sanctioned or if Russia decides to stop exporting then it's going to be up to the Saudis in new ways to decide whether or not to break the pack and increase production. Under those guidelines the president phoned you up Scott and said you know what we need some more oil. What are you gonna say to him. I'll tell him we have a pact with. It's all about the shareholders. Our shareholders own this company. They want a return of cash. We know what's happened when we increase US shale too much over the last 10 years as we've had a collapse. And so we are growing. What's good. We are growing 5 percent long term. And that's probably good enough for the. Hopefully it's good enough for the president if he calls me. All right. Well let us know if that day happens. We would love to talk to you about that conversation Scott in terms of what your shareholders want. Obviously you're prioritizing returning money to them. Does that mean no M & A is on the table at the moment. No. No I'm on a at all. What we're doing I answered on the call. We're doing small deals. We're buying small deals. We're selling small deals. But Pioneer has the longest inventory of anybody in U.S. shale. It's 15 to 20 years. There's no reason to buy anybody a large emanate. We got the greatest dividend the highest dividend of the S & P 500. So what kind of inflation are you seeing right now. Where are the bottlenecks. Where are you struggling. Is it people. Is it materials. What's the story. No. Being the largest in Permian Basin operator producer and also the most with drilling rigs we get the best cost in the basin. We've seen about a 10 to 15 percent increase over the last second half of 2021. We're seeing probably a five to seven percent increase in 22 that's built into our CapEx guidance. And so besides that pioneer is set now. Several other producers are having trouble getting frac roost. They're having trouble getting labor and they're having trouble getting sand. And so that is an issue. And that's going to keep anybody from growing even if the president wants us to grow. I just don't think the industry could grow anyway. Finally Scott we began this conversation with your statement that we can see oil going to 150 dollars in the coming months. When will we see that come down and supply and demand come more into balance. What is your expectation. Yeah. This I've been through six cycles of the last 40 years in the industry. This is the last time we had a demand cycle was back in 1980 81. Oil was about 15 and went to 50 dollars. We had spot market up to 100 dollars at that point time. And so we have to get to a price where people reduce demand. And most people are saying that's around 150 dollar oil. And so is always great to catch up. We're gonna leave it there. Thank you very much indeed. We're seeing a little bit of scratching on the mike that's going to lead the conversation. Scott Sheffield Pioneer Natural Resources C E.

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Oil Prices Won't Impact Pioneer's Growth Plans, CEO Says

Pioneer Natural Resources CEO Scott Sheffield says rising oil prices won't impact the company's growth plans. He speaks with Bloomberg's Kailey Leinz and Guy Johnson on "Bloomberg Markets: European Close." (Source: Bloomberg)