Cartoon Of the Week

Sorry, I can't hep myself.

There is some really good stuff on the Forum Page these days suggesting Tier 1 & 2 level drilling locations in the Midland Basin now being down to less than 4 years. Novi data. Enverus data. But that is at $70 oil prices and last Friday's close for WTI on the NYMEX was $58.90.

Rystad says full cycle breakeven prices for Permian HZ wells is $65; Enverus says $70, going to $95 by 2030. Associated gas prices at WaHa in West Texas has hit negative $8 per mcf several times the past 3 weeks. You either have to flare it or write a check for them to take if off your lease so they can flare it there.

What's the sector in the mighty Permian doing in response to all that bad news? Full speed ahead. Everything it drills it completes, over 370 wells per month. Nobody, I repeat NOBODY, not even Exxon, makes money at $58.90 per BO and negative WaHa. They don't make enough money to pay the cost of news wells back, to pay dividends, service debt, to EVER pay that debt back and to P,A & D its wells and clean up its mess. Anybody that says differently is lying to you.

Four years of remaining drilling inventory. In the Midland Basin of the Permian, for God's sake! Talk about running out of ammo.