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Here is a Novi chart for all HZ tight oil wells drilled in the Permian Basin from 2016 to July 2025. These well profiles (by year) are normalized for lateral lengths. At month 24 for 2023 wells the c

There is a giant reason to always portray well economics in a non-GAPP, 'everything-is-good-and-getting-better' manner in the tight oil biz. I don't need to go into that; it's just the way it is.

I happen to believe three quarters of well economic projections are made by people on the internet that don't know any better, never wrote a check for LOE's or an AFE, in their lives; the other quarter is by people who know better and are intentionally trying to mislead folks. Some folks don't even care about well economics...ALL technically recoverable resources will ultimately come out of the ground. Period.

Breakeven, for instance, is something I never heard of in my half century of drilling wells until the shale thing came along. Who cares about breaking even? I want to know what the full cycle, all-in net back price of oil is at a certain NYMEX price, after all past, present and future costs are deducted. I then need to know if the well I am drilling is going to make enough oil at that netback price to earn at least a 200% ROI. I'd prefer 300% but that has only historically occurred for less than 5% of HZ wells drilled, in for instance, in either sub-basin of the Permian.

Why lie about well economics? It all comes out in the wash fluid, bottoms up.

There is no such thing as "free" cash flow when your company is $15.2B in debt and has another $4B of P,A &D liability it has not set back. Dividends are NOT a success story and using breakeven prices is a stupid, overused metric.

Of course it is the "most important; " everything else is a half-cycle half-truth. How does a corporation engaged in oil and natural gas extraction keep its doors open other than thru revenue from production sales, less ALL costs relative to that extraction, beginning to end?

No shit on distorting behavior. It also distorts domestic and foreign energy policies and has led to something in the order of $300B of losses in the tight oil phenomena...and counting.

Not including land costs in the economic projection is a big whopper of a lie. As a result of mergers and acquisitions in the Permian in 2023 and 2024, for instance, Exxon and Diamondback paid over $4.5 MM per drillable location from their respective predecessors. Ignoring that is dumb.

We've shown you elsewhere on Oilystuff.com that full cycle, all-in breakeven prices (ug!) are actually in the mid to high $90's when considering debt has to be paid back (it actually does, you know!) and wells plugged.

Nobody is making enough money in the tight oil business below $65 to ever get out of a pickle. What it IS doing to burning thru its already pressure depleted cores drilling the last of its Tier 1/2 locations. When the price of oil does improve there will be little left to drill that is economic, way out yonder...in goat pasture.

Goldman Sachs and I estimated net long-term debt for public companies in the Permian at over $186 B. I bet half of that, at least, never gets paid back and I reserve the right to up that percentage at any time.