Permian Basin heavyweight Pioneer Natural Resources Co.’s executive team sees a possible drilling ban on federal property as the biggest exposure facing the oil and gas industry if Joseph R. Biden Jr. hangs on to win the presidency, management said Thursday.

Assuming that Republicans maintain a majority in the Senate, there “should be no effect with regard to taxes going forward,” CEO Scott Sheffield told analysts during a third quarter earnings call.

“The big unknown for people that own federal acreage is will he stop giving drilling permits?” Sheffield asked. He noted that Biden has pledged not to ban hydraulic fracturing (fracking), “but he can do other things like stop giving drilling permits, which would affect New Mexico, Wyoming and the Gulf of Mexico in federal waters.”

Sheffield added that he would expect under Biden, the Environmental Protection Agency could reinstate Obama-era greenhouse gas emissions standards that were rolled back by the current administration. 

“We were against Trump doing that,” Sheffield said.

As of Thursday afternoon, Biden had captured 264 of the 270 electoral votes needed to take the White House, compared to President Trump’s tally of 214.

The election is one of several factors that could impact oil prices over the coming months, Sheffield said.

These include a third wave of coronavirus cases and an upcoming meeting late this month of the Organization of the Petroleum Exporting Countries and its allies to discuss extending supply cuts.

In any case, no matter the oil price, Pioneer plans to maintain a value-over-volume strategy for annual oil production growth, said Sheffield.

“I’ve stated before, we will never go above 5% long-term” output growth, “regardless of what the oil strip is doing.”

However, “I’m a firm believer that long term, Brent will be above $45.”

Pioneer reported oil and gas production at the upper end of guidance during the third quarter, totaling 354,968 boe/d from 350,725 boe/d in the third quarter of 2019.

Output comprised 200,670 b/d oil, 82,614 b/d natural gas liquids (NGL) and 430.1 MMcf/d natural gas.

These figures compare to 3Q2019 output totals of 215,204 b/d oil, 74,814 b/d NGLs and 418.6 MMcf/d gas.

The company generated $131 million of free cash flow in 3Q2020.

Pioneer raised its full-year 2020 production guidance for a second straight quarter, but capital spending guidance for the year remains unchanged.

Full-year oil production is now expected to average 209,000-211,000 b/d, while total production is seen averaging 365,000-369,000 boe/d.

Pioneer is currently running eight horizontal drilling rigs and four fracture fleets. It placed 37 horizontal wells on production during the quarter.

About 5.5 million b/d of lower-margin, higher-cost vertical well production was curtailed during the period, which is expected to remain offline in the current commodity price environment, management said.

Pioneer’s pending acquisition of Parsley Energy Inc. is expected to reduce the  reinvestment rate to a range of 65% to 75% from 70-80%, “allowing for significant free cash flow generation while maintaining a strong balance sheet,” Sheffield said.

Pioneer reported a net loss of $20 million (minus 12 cents/share) for the third quarter, compared with year-ago net profit of $231 million ($1.38).