Chesapeake Energy co-founder Tom Ward said Friday that oil prices need to recover to about $75 a barrel in order for most drillers to ramp up production.
Crude futures have recently approached $50 a barrel after rebounding more than 80 percent from this year's lows in the mid-$20 range. Some worry those prices will incentivize high-cost U.S. oil producers to put more rigs to work, worsening a global supply glut and putting off a sustainable price recovery.
U.S. oil production has fallen from a high of nearly 9.7 million barrels per day last year to about 8.8 million barrels per day.
But $50 is not high enough to elicit a production response, said Ward, who is now chairman and CEO of Tapstone Energy. That is because the capital markets are essentially closed to drillers, and drillers need to outspend cash flow to increase production, he said.
"In our business, the dirty little secret is you can't really spend within cash flow and grow production," he told CNBC's "Squawk on the Street."