As C+C productivity begins to wane in the Permian Basin the use of BOE will continue to be more prevalent. Remember, at a ratio of 6 MCF to 1 BO, as GOR increases so does BOE production. Or put another way, BOE makes decline look less than it actually is.

Take, for instance, Rystad's latest hoopla on 90% decline rates of Permian wells the first three years of production life...on a BOE basis.

On a C+C liquids basis, it's worse than that. It was 89% in 2022. Look what is happening to well productivity and the rate of decline in 2025, below:

If Shale R Us, LLC drills a $10MM Wolfcamp A well in the Midland Basin in three years it's going to make roughly 320K BO and some change. That is about 76-77% of its EUR. And pending. Parent/child degradation and pressure depletion is causing well EURS to decline and that will only get worse over time.

At $65 oil 320K BO is NOT going to pay that well off on a full cycle, all-in corporate basis.

Pundits that suggest wells "break-even, below $50 are lying to you. They are saying that on a half cycle accounting basis leaving out entirely the cost of doing business, paying dividends, corporate overhead, deleveraging long term debt and P&A set asides. You can't ignore stuff like that; how else can Shale R Us pay its bills and keep the doors open other than from production revenue?

As the chart suggests, things are getting worse, not better.