BIG LAKE, TX (KWES) - The oil industry has taken a hit with the decreasing price of oil. Many companies have already made cutbacks in the Permian Basin. Pioneer Natural Resources is the latest and will be decreasing oil drilling by 50 percent.
At the end of 2015, Pioneer was operating 24 rigs. By mid 2016, however, that number will be cut down to 12. Those 12 remaining rigs will be in the Northern Spraberry/Wolfcamp area.
"Pioneer remains confident in the Permian. But in order to preserve capital and maintain our strong balance sheet, we are reducing our rigs from 16 to 12. However, we are also transferring employees associated with two Pioneer frac fleets from the Eagle Ford to the Permian to support ongoing operations," said Robert Bobo, Director of Communications at Pioneer Natural Resources Company.
Others are not as lucky, the six rigs operated in Eagle Ford in south Texas will be shut down completely this quarter.
Pioneer CEO and chairman, Scott Sheffield, remains positive about the oil downturn and the Basin.
"The performance from our Spraberry/Wolfcamp horizontal drilling program continues to be outstanding. We have the financial flexibility to prudently manage through the current commodity price downturn or quickly ramp up drilling activity when prices improve," said Sheffield.
Pioneer is also dealing with a $2 million budget cut after reporting at net loss of $623 million last quarter. The new budget is $2 billion. They say it's a result of the reduction in drilling activity and spending. Pioneer says the cutbacks will include layoffs but none in the Permian Basin..