This fella is an independent oil and gas producer from Okahoma who I am sure has skin in the game, in other words uses his own money and knows how to earn a proftt from oil and gas extraction... from concept to reality. He is like me and a few others in America. He sees down the road and is not afraid to speak out. He is concerned about the direction we are going. I do not believe this fella and I are perfectly aligned politically, but we agree on the long term detriments of oil and LNG exports from our country, fer sure. My friend Anne suggests this video stuff is what I should have done years ago, instead of writing about it, but I am too old and too ugly to put myself all over YouTube. The Mr. Global fella has made a big name for himself speaking out on oil and natural gas. Energy Secretary Doesn’t Know Energy The new Energy Secretary has gone off his rocker. Politics does this to people, even MIT graduates, and is an evil disease that can be contacted quite easily these days. To remain in a position of power, policians will sell their souls to the devil and say and do things that make no sense for another vote. Like U.S. shale oil and shale gas can grow exponentially, even at much lower product prices ($50?!!)... because of, what else, better technology. What happened to the responsibility of influence and the moral obligation to always tell the truth in our country? Who, exactly, do we turn to these days for the truth? Why should the truth about our nation's oil and gas future, for instance, cost us money? What's the big "secret" all about?

United States shale oil is NOT profitable at $65 WTI NYMEX. At that price it takes 3 plus years and 80% of a Permian Basin's type curve EUR to reach payout. That leaves a 20% margin, realized over 12 more years, give or take, to accumulate enough to be able to keep drilling $10MM wells, pay 5-7% dividends, pay long term debt back (still over $100B in the Permian Basin alone, and growing) and to rack back enough for retirement of wells and decommissioning of infrastructure. Forget the $500B the shale oil sector has already lost, $65 oil is not enough for shale oil to pay all of its current liabilities. Making pizzas, changing truck tires, producing oil and natural gas...liabilities have to all be paid. Until they are, you are never truly profitable, nor is there such a thing as "free" cash flow, is there? U.S. shale oil production in the Permian Basin is still holding its own, barely, because of super long laterals being squeezed in between 55,000 legacy tight oil wells already drilled on less than 800 foot spacing in the Permian. That cannot continue before the sector is forced to move out into goat pasture where wells will cost more, make even more gas and less liquids, where profits will be worse. Trump wants prices even lower than $65. He promised to cut gasoline prices in America by half. Mike Sommers is NOT telling the truth. Chris Wright is NOT telling the truth; we cannot grow U.S. shale oil or U.S. shale gas when product prices are headed lower and costs are headed higher. I love my country, I love my industry, but I am up to my hard hat in lies. It is getting harder and harder to be a Republican these days...because of this dumb shit above. Did anybody in this meeting have the cajones to tell Trump the truth? Or do you stand up to a fella who told you to your face he did not care if you drilled yourself out of business? Well, Hamm got close with his comments about $80 WTI NYMEX and Sheffield got close with 8 more years of profitable locations in the Permian (if you whack that by half)...who else? Diamondback has $18 B of long term debt to pay back, and 8,000 HZ and vertical wells to plug in the Permian. How much of that sort of stuff got discussed at the pow-wow yesterday? Not much, I'll bet. Best not cross the man that controls LOTSA other people's money. Mikey S.

This image from the United States Geological Society (USGS) dovetails the Berman (Supetra etal.; 2021) chart discussion elsewhere in Forum Stuff. It is a structure map on the top of the Wolfcamp formation in the Permian Basin. The grey area essentially outlines the entire Permian Basin which was included in the 2016 and 2018 USGS assessments of technically recoverable tight oil. The pink cores outlined in each sub-basin (Mike), represent 10-11 partial counties by areal extent and from these cores roughly 85% of ALL Permian tight oil production has been produced. There are an estimated 48,000 HZ wells in these cores, some of them drilled as close to together as 500 feet, lateral to lateral. In the Midland Basin three benches produce roughly 75% of shale oil extracted in the sub-basin; in the Delware there are five productive benches that produced 90% of all production. The pink cores do not represent the productive limits of each sub-basin, however, and some 6-8,000 additional wells have been drilled outside the cores, in less productive acreage that some people like to refer to as Tier 3/4 acreage. I sometimes refer to this flank acreage outside the cores as goat pasture. The USGS recoverable resource assessments covered the entire Permian Basin outlined in the two images and placed enourmous technically recoverable tight oil resources everywhere, even as far north as Lubbock, and has messed with people's heads, badly. There are lots of people in the U.S. who want you to believe if its technically recoverable, its all going to come out of the ground, all it takes is more money. The actual cores of the HZ shale oil play in the Permian represent approximately 20-25% of the assessment areas and productive limits, where wells have been drilled and found bascially no commerical shale oil, about 40% of the assessment area. The rest, where theoretical technically recoverable, as yet unfound resources lie, would not support a goat for 1 day. Lets call that Never-Never Land. In their 2021 paper, Saputra etal predicts there can be 100,000 more HZ wells drilled in flank, Tier 3/4 acreage, outside the cores, and 21 G BO +/- more oil can be produced over and above the 16 G BO that has been produced from the cores. The authors even believe wells can be drilled in Never-Never Land and more shale oil produced. Yikes. No word on what the price of natgas would have to be to make THAT happen. Again, thus far less than 15% of Permian shale oil has come from flank areas. Core areas and sweet spots within those cores are "sweet" for a reason. They represent the best rock and the oil and gas business always drills its best stuff, first. As you can see in the structure map the lowest top of the Wolfcamp lies pretty much in the cores. A net isopach map would show the Wolfcamp correlative interval to be the thickest in the core, a function of deposition and how sediments washed into the basin and stacked, bottom up. The interval in the core has the best oil saturations, the highest initial GOR, better nanopermability, higher carbonate content, the best thermal gradients, total organic carbon and the lowest sulphur, nitrogen, etc. contents...everything in the core kitchens are perfect to cook and produce the most oil when hydraulically frac'ed. Cores are where they make the highest volumes of oil and the most money. The mudstone (shale) down structure, in higher structural areas, is thinner, generally has higher water saturations and is much gassier. Nobody is anxious to drill Tier 3/4, non-core goat pasture at oil prices of less than $100 and $5 natgas, sustained. Given declining liquids productivity in the cores, rising GOR, rising WOR and obvious well inteference, if it was good in the goat pasture they'd be out there right now drilling the snot out of it. About the two cores in the Permian....the shale sector doesn't call it low-grading, they call it high-grading. There is a reason for that.

I assume by four main Permian "plays" Mr. Berman means four main benches, like the Lo. Spraberry, Bone Spring and Wolfcamp A and B. If production in the Permian is plateauing, its "rolling over." From growing like a house 'a fire since 2014 to going flat 2H24, thats "rolling over." Depletion doesn't happen over night, it happens over time. Whatever; lets don't start changing definitions again, please. That bullshit is getting old. "Base + core" means current legacy production plus Tier 1/2 level locations left to drill in the core areas = 5 more years of plateau at current production rates. Core areas are Midland, Martin, Lea, Eddy counties, etc. Base + noncore means legacy production plus Tier 3/4 flank stuff, like Culberson, Pecos, Reagan and Glasscock counties, etc. Actually this is not Berman's chart it's a chart from a paper written in 2021 by three University of Texas Petroleum Engineers, Wardana Saputra, Wissem Kirati and Tadeusz Patzek, Dr. Patzek is a man I have heard lecture several times, NOT a stripper well operator. and very smart. The paper is titled Forecast of Economic Tight Oil and Gas Production in Permian Basin, published in 2021. It can be found in SPE publications or MPDI. It was a good paper except it made some very incorrect assumptions about well economics. OIl prices today are the same as 2021, well costs, however, are up 30%. More on EUR assumptions, below. From the paper itself... As previously mentioned, in 2021 this paper clearly assumed well productivity and EUR's were going to increase because of longer laterals and more proppant loading per peforated foot. From the paper: "The newer wells yield significantly higher EURs due to longer laterals and bigger hydraulic fractures. However, in areas of poor reservoir quality, these advancements of completion technologies do not help much;" With regard to EUR's, Berman himself concluded a year ago that longer laterals and more proppant loading per perforated foot had reduced the average EUR's in the Permian Basin by +/-25% the previous 4 years. Given the exponentially higher decline rates of longer laterals and in new frac designs (73% in the Midland Basin at month 13), I concur with this. Short term production went up but, then declined quickly, implied EUR's are falling. With regard to the remaining number of wells to be drilled over the next 5-6 years to maintain a plateau, at current rig counts the Permian can only complete approximately 5,200 wells per year. Gassy oil wells are turning into oily gas wells and first year declines have increased since 2018-2019 at 47% to over 73% in 2024, basin wide. Costs are going up (25% tarriffs on steel!), profits will be going down. The Permian shale oil sector can only support a rig count of 300 without other people's money; it is adding more debt to the nine figure debt it already has just to pay dividends to investors. If FANG buys Double Eagle for $6.5B, its total long term debt will be a knat's ass below $20B and it will be paying close to a B a year in interest. To the casual observer the Permian HZ play is doing fine and can keep 300 rigs running, no problem; I personally do not think so. If so, why all the M&A's? Past results are NEVER indicative of future performance in the oil and gas business. For the record, current Permian production is 6.3 MM BOPD as a result of a massiive number of DUC completions in 2023 and big six month production numbers from longer laterals, more densely populated staging along that lateral and much bigger frac's. The annualized decline of that legacy production (6.2 MM BOPD) is 43%, or 2.58 MM BOPD. To maintain a plateau the Permian has to find and replace 2.58 MM BOPD, every year, for the next 6 years. That's a new 700 MM BO oilfield, per year...as big or bigger that lots new structures being found in Guyana off the east coast of South America ! And as to remaining drillable, Tier 1/2 locations in the cores, a big contention of the Saputra paper is infill drilling. I am not buying that, particularly in the Midland Basin where wells are already drilled on <600 foot spacing, GOR is threatening bubble point in entire counties (Midland, for instance, Martin, next!) and wells are interfering with each other. I therefore do not believe 35,000 additional wells can be drilled in the next six years that will add another 16-17 billion barrels of UR to current Permian totals...it will take many more wells than have previously been drilled. We always drill and complete the best stuff first; its naïve to suggest the last 55,000 HZ wells drilled in the Permian will be better than the first 55,000, longer laterals or not. Look at at TRRC GIS map and find room for 2,000, 15,000 foot laterals in Permian Tier 1/2 cores. You can't do it. The greater efficiency, better technology sound bites are clearly proving to be just that, sound bites. That technology bullshit is getting REALLY old. The heart of the Permian Basin watermelon has already been eaten. Henceforth new wells will be gassier, less liquids productive, be more expensive to drill and complete, have lower EUR's and be even less profitable, if that is possible. The amount of long term debt the Permian has to pay off, and the retirement/decommissioning of existing wells, pads, infrastructure and fee land is still in access of $200 B. Where is all the money going to come from to keep drilling these expensive, marginally profitable wells?