U.S. tight oil has never had a proven developed producing reserves to production ratio (PDPR/P) of more than 4. That means at no time in its history would tight oil proven producing reserves from existing wells have lasted more than 4 years, maybe 5 depending on the price of oil. Decline rates are now approaching 86% in the first three years of production life and 49% of all HZ tight oil production depletes, is gone, every year.

Novi suggests over 50% of U.S. tight oil production is less than 18 months old. I would suggest that at or near $65 WTI, over half of the existing HZ tight oil wells in America make less than 30 BOPD, on AL, over 100 BWPD, are still declining at the rate of 15% per year. If prices don't rise these wells will need to be plugged within the next 3 years. Produced water problems in the single biggest threat to the Permian, bigger, even, than horrible well economics and debt.

One of the biggest misconceptions in American involving shale oil is that any price above "breakeven" is profit. Nothing could be further from the truth. I have shown you that if full cycle costs are included in the breakeven estimate, including corporate overhead, interest on long term debt, the payment of dividends to investors, the actual payment of long-term debt, and plugging and decommissioning costs... the true breakeven price for tight oil is $90 a barrel. Below $90 per barrel, no shale oil company will be able to pay its debt back nor plug its wells.

The chart above is based on historic, known decline rates of U.S. tight oil. If drilling were to cease, tomorrow, for any host of reasons, the sector has enough active, producing wells to generate 7.8 B barrels of oil over the next 5 years. The sector then would have to earn, after all royalty deductions, OPEX, administrative overhead, taxes, interest on long term debt and dividend payments to investors, $23 per incremental BO to pay its debt back.

Rystad analyzes full cycle break even prices for U.S. shale oil are $62.50. Based on WTI NYMEX on 7.31.25 the American shale sector is making $6.64 netback per BO.

Nevertheless, the sector continues to drill wells, burn thru its remaining drilling location inventory and flare associated gas. Overall, the sector is not paying down debt, it is adding debt. It borrowed $168 B in 2024 and or burned net cash flow on...stock buybacks.

I don't know what Singapore, or Rotterdam, or London pays for Permian Basin HZ tight oil but I assure you it will not pay anywhere close to enough for the Permian shale sector to pay off its massive debt. So, effectively, it receives U.S. oil exports, below costs.

You good with that?