At $80 WTI the Hockley well in Duval County will ultimately have a return on initial investment of 400% or more (4:1), produce for 35 years with an annualized decline rate of <4%. I've drilled them. I know what they cost.

The Diamondback wells cost $15 MM each, including land costs that occurred with the Endeavor M&A. They may require 3 strings of casing given where they are and if there are issues drilling thru the San Andres and Upper Spraberry. They'll be lucky to produce 20 years, max, before reaching economic limits and decline by 90% within 3 years. At $80, full cycle, those wells will have a 50% ROI (1.5:1). $15/$7.5.20=2.5-3.0 % annualized rate of return before taxes.

If you were working out of your own personal check book this is the way you would compare the economics; the shale sector, of course, will make those monster IP wells look terrific using funky non-GAPP, definitions, EBITDA and all kinds of crap I've never heard of until 15 years ago. Based on 1Q2026 SEC filings roughly 50% of the net revenue from those big wells went to investors via dividends. The chances they were drilled 6 months ago from RBL proceeds, at 5% interest, are pretty high. If that is true the interest on debt exceeds the profit margin.

I've had this argument with lots of "financial engineers," none of whom ever paid an AFE or an LOE in their lives. The definition of "profit" escapes them.