Pioneer Natural Resources CEO predicts US Crude oil production will reach 14 million barrels per day with improved drilling technology

Technological improvements will allow energy companies to scrape more crude out of the ground and drive U.S. oil production higher. Although government forecasters expect U.S. oil production to peak around 9.5 million barrels per day in 2016, Scott Sheffield, CEO of Irving, Texas-based Pioneer Natural Resources told an energy conference here the real pinnacle could be 14 million barrels daily.

“The only thing that can stop it is oil prices,” Sheffield said, warning that a price collapse for domestic West Texas Intermediate crude would cause “a tremendous turndown.”

The industry may not discover any more big elephant fields boasting up to 75 billion barrels of oil, Sheffield said, but will continue to find new opportunities in conventional plays. And he noted the industry is pursuing new techniques for boosting the recovery rate at wells up from the 2 percent to 3 percent common today.

Continental Resources is using megapads with 30 wells in them to reduce costs. The average cost of a Bakken-Three Forks well declined to $8.0 million from $9.2 million in the past year and a half, and the company expects to further reduce costs to $7.5 million by the end of 2014. Bott said the average industry well cost is $11.3 million. The Bakken-Three Forks accounted for 93,300 boe/d of Continental’s production of 144,300 boe/d at year-end 2013, and company-wide output is expected to more than double to 300,000 boe/d by 2017. Continentals continuing efforts to improve its understanding of the Bakken-Three Forks are contributing to a rising reserve base. Proved reserves totaled 1.08 billion boe at year-end 2013, a 38% increase compared with yearend 2012.

Pioneer has a $30 billion market capitalization.

Nextbigfuture notes that with continuing fighting in the middle east (particularly Iraq) will support higher oil prices. About 10% of the world’s oil production could remain under producing.

Steven Mueller, CEO of Houston-based Southwestern Energy, a major gas producer, sees big potential as companies apply unconventional techniques to conventional basins and areas once written off as unworkable.

Mueller predicted that energy companies will return to some of those plays with “crummy rock” — a category he said included “all of Midland and West Texas” — and figure out how to make them economic. Mueller added that every conventional basin also has source rock that can be exploited through hydraulic fracturing, a post-drilling completion method that involves pumping sand, water and chemicals underground to pull oil and gas from rock pores.

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