A two year payout is a really dumb metric to determine breakeven, or remaining drillable locations in an oil play like the HZ Permian play. I never heard of "breakeven" in 60 years of being an oil and gas producer; the goal is to make money, not break even. To me (as someone who has to spend its OWN money to drill wells), ROI is a better metric and for wells that decline over 70% the first year of production, that ROI needs to be 300%.

At $70 gross WTI at the well head (and ZERO revenue for associated gas), the weighted net back price of oil in the Midland Basin, after royalty, G&A, incremental lift costs per BO, including DH maintenace, taxes and interest expense on that debt of the 10 largest producers in the Midland Basin... is $30-33 dollars per gross BO. Thats the profit per barrel.

Using Novi's own weighted EUR per Midland Basin well, and $8MM well costs, that equates to a less than 140% rate of return on investment over 15 years. From that rate of return debt has to be paid back and all well inventory must be retired, as in plugged, abandoned and decommissioned. So you risk $8 MM, to make $4 MM, or less, over 15 years? Thats piss poor economics. Nobody would do that with their own money. Five of the top 10 operators in the Midland Basin have over $6 billion of long term debt. There are 30,000 HZ wells in this Basin and it will take north of $4.5 billion to plug those wells and clean it all up.

There is no where near 15,000 remaining wells left to be drilled at $70 per BO, not even out in goat pasture, particularly not out there as EUR's 'out there' won't be 435,000 BO.

Remember, they're drilling over 2,700 new wells per year in this sub-Basin. Four years, tops and then we're dealing with 40% legacy decline rates.

Drill baby, drill to try and produce another 4 MM more BO from the Permian Basin, all of which will have to exported and diluted across the big, wide world...to lower the price of oil to $30, and gasoline by half here in the U.S.... is a lie.

There are NOT nine more years of good, profitable wells to drill in the Permian, not even close. The entire place is about to bust wide-ass open already with produced water.