Pioneer Natural Resources Midland Basin Site Visit

Two weeks ago, ExxonMobil announced a merger with Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion, a move that plans to accelerate Pioneer’s net zero Permian ambition from 2050 to 2035.

The day before the announced merger, The Energy Council had the opportunity to visit the Midland Basin operations of Pioneer Natural Resources with a group of long-hold investors, including the likes of American Century Investments, Boston Partners, CalSTRS, ClearBridge Investments, Nuveen, PGIM & Ceres.

The purpose of this visit was to understand what technologies are being implemented to measure, track & report emissions data at O&G facilities, how these technologies are being implemented, how the data is being collected and verified, and ultimately, what the O&G industry is doing to improve its environmental performance, restore the faith of the generalist investor & attract capital back to the space.

During the day, we visited three different sites across their operations to see first-hand how Pioneer has been reducing emissions & driving performance (and economic) improvement.

• Drilling: we saw a rig drilling a multi-well pad powered by electricity from the grid rather than diesel fuel, reducing emissions and saving money.
• Completions: an electric frac fleet was completing a separate multi-well pad for them, powered by compressed natural gas rather than diesel, also resulting in lower emissions and lower costs vs. diesel.
• We visited a tank battery collecting production from ~50 wells to learn more about their efforts to measure & reduce methane emissions. The facility was equipped with continuous monitoring devices and vapor recovery units to keep gas in the pipe. Keeping gas in the pipe means more revenue and lower methane emissions. The team also walked us through how they carry out flyovers to help detect and eliminate methane emissions.

Many companies in the industry are raising their game with initiatives that are both good for the climate for business. The O&G industry has been doing a fantastic job at decarbonizing its operations, but this innovation isn’t being conveyed in a fashion where it’s receiving due credit. More work needs to be done to get the generalist investor and the general public on side, and to bring the industry laggards up to speed and onto the right path. Hopefully, trips like this one are a way of telling the story and getting that message out there.

Thank you to the Pioneer Natural Resources team for an incredibly educational trip, and congratulations to them for the largest energy deal in over two decades!