I can show you photos of David all night long. He is a direct dissident of the Coots Matthews, particularly the Boots Hansen style of well control...stand back, way back, so you don't get hurt, and let me take care of this. Which he did, hundreds of times.

The dozens of times I was with him I was often amazed. He actually scared the shit out of me, often, but I followed him, everywhere, because I was too ashamed not to. This man had nuts as big was watermelons. He was good at what he did. Hard to get on with, sometimes, but a heart as big a barrel. As good at his profession as anyone.

It is a great honor to work for him, with him, to call him my friend. He is 74 years old now, a year younger than me.

Last week David parked his truck on…

So, Iran closed the Strait of Hormuz. Oil supplies are choked off to both friend (Europe) and foe (China). Now, the ceasefire is failing.

What I have noticed with that with this extra push, Europe might be on the brink of a civil war. Their societies are very divided along liberal-elite/conservative-populist similar to the US. Their economies are much more fragile than they appear to be. UK, for example, is running out of jet fuel. Australia is running out of diesel.

The cause of them running out of fuel is global warming hysteria. UK has oil fields in the North Sea to drill, but won't. Australia farmed out its refineries to Asia, so it has oil but no way to refine it. The climate policies are starting to bite. Netherlands shut down the largest gas field in Europe. No one dares speak the F-word, fracking.

I certainly hope that Europe…

The author of this article is a Senior Contributor for Forbes and the chief editor of Shale Magazine, both of whom cheerlead profusely for tight oil and LNG exports, non-stop.

U.S. shale oil production totals over 9.3 MM BOPD (2025), has been above 8.0 MM BOPD for the past three years.

In 2025 tight oil exports from the Permian Basin averaged 4.4 MM BOPD, in 2026 they are down to 4.1 MM BOPD (EIA etal.). U.S refineries have been absorbing 4-5 MM BOPD of LTO and turning that oil into useful products for many years. obviously. Products beneficial to the American consumer. Clearly U.S refineries can "handle" shale oil. I certainly have never said otherwise.

The Shale Boom Changed the Equation

Then the shale revolution flipped the script.

We don't have it to spare, no. Folks will understand that better in just a few short years and then have an absolute cow because they have been deceived so long. They'll wish we had that 15 B barrels of tight oil we exported since 2016, below costs, back. Betcha.

The US gets over 80% of its gas from shale. That gas, among other things, fuels 43% of our electricity generation. As far as I can see, everyone thinks the US has an endless supply of it.

The US is an exporter of gas, meaning that when the US has a shortage of gas from falling production, prices will zoom to world prices. A good shorthand is to divide the price of WTI by 6. That will be the new price of gas. At current prices of $102/barrel, that yields about $17/thousand cubic feet. Even back at $55/barrel, that still yields $9/thousand cubic feet.

Currently, the US price for nat gas is $3/thousand cubic feet. We would face a natural gas shock of enormous proportions. A three- to six-fold jump in gas prices is baked into the cake with every new LNG terminal we build. If we simultaneously face an…

The EIA, of all things, taught me this week that 49% of all U.S. oil and condensate production now comes from the Permian Basin.

But the Permian you think of is vast, thousands of square miles with benches in it layered like a German chocolate cake, all full of oil and profitable as can be.

Nah.

Ninety percent of all Permian tight oil production comes from just 8 counties and little slivers of four more counties, two in the Midland and two in the Delaware. These areas have 58,000 wells stuffed into them already, many drilled on <600 foot spacing between wells that communicate with each other vertically and horizontally. There are actually only 3-4 productive benches (formations) in each of those cores and those primary benches generally make up more than 80% of total production.

The Permian currently produces about 6.1 MM BOPD. Every year that production declines by 2.4…

www.dallasfed.org

Activity in the oil and gas sector increased in first quarter 2026, according to oil and gas executives responding to the Dallas Fed Energy Survey.

It's always fun to read these things, particularly the comments. Everybody's oatmeal is all stirred up now because of Iran and $100 WTI.

My only dumbass roughneck comment about these comments is that generally speaking balance sheets are big train wrecks, most the tight oil sector is adding debt, still, after 15 years, and the sector's ability to ramp up is based on debt, how much of it is still available. Because they do NOT have vast sums of money, if they want to ramp up, they'll have to borrow baby, borrow.

And 2026 is an impairment year from SEC declines in usable oil prices for 2025. Or will that get dumped by Trump? Lenders are going to have to have enormous cajones to loan money to the shale sector given existing debt, poorer wells and the high probability between now and 2028 that oil prices will go DOWN, no…

I saw a video today, and maybe I can get feedback on it.

There is a 200' deep sinkhole in Winkler County. It's growing.

Under the Permian, there is a large layer of compressed salt. The salt used to be stable, but now the salt is slowly being dissolved by deep injection of produced water. Other causes are abandoned wells and the fact that groundwater is able to seep deep underground due to so much alteration of the subsurface due to drilling.

The result is caverns under the Permian. Every once in a while, the ground collapses and forms a sinkhole. There are about 50 areas in the Permian with this problem, and some of them have pipelines, tanks, towns, etc. over them.

No one has a solution to stabilize the ground. Professor Mike, is this true? Ever heard of this?