Shale Pioneer Sheffield Warns Oil Chiefs of Grim Times Ahead

(Bloomberg) -- Scott Sheffield, the retired shale impresario who built a fortune drilling for Permian Basin oil, has grim advice for former rivals as President Donald Trump pushes for “drill baby drill” to bring down energy prices.

“You’ve really got to hunker down,” Sheffield said during a Bloomberg Television interview on the sidelines of CERAWeek by S&P Global conference on Tuesday. “You may have to lay off some people. You’ve got to focus on your best prospects. We’ll see what happens over the next two or three years.”

Sheffield, one of the most outspoken shale executives of his generation, expects crude prices to drop into the $50-to-$60 range as other countries increase output while demand from China peaks. That will present tough challenges for US drillers, he added.

“It’s really hard to make money at $50 oil,” said Sheffield, who co-founded Pioneer Natural Resources Co. and later sold it to Exxon Mobil Corp. for $63 billion.

Trump and his hand-picked energy chief Chris Wright appear to be hoping that efficiency gains will enable drillers to thrive even in a $50-a-barrel universe, he said.

“That could happen,” Sheffield said. “Every time you go through a downturn, you got to think out of the box and how to live with a lower price.”

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