Why in God's name are rig counts still falling in the mighty Permian Basin at what will most certainly be a weighted WTI oil price for August of of $78 a barrel? Frac spreads were way down for the week. Whazzup?

THIS is not the tight oil sector we've grown to love and support,...since when in the past 14 years has the tight oil sector dropped rigs with prices going up? Those are kick ass product prices if the "breakeven" dookey is anywhere close to $40. Something is bad wrong. What is it?

Well, here's a thought...

• When 50% of your revenue stream is now gas and natural gas liquids related, economics for $11 MM wells suck at<$2.00 per MMBTU and $20 liquids prices.

• FCF in the manner it is reported is non-GAPP non-sence because it's calculations seldom include the cost of G&A, interest expense on legacy debt (rising), nor ever includes dividend expense per incremental BO, or what investors now demand in the way of payback. At the end of the month there is actually not near the real money reported.

• None of these tight oil dudes can raise CAPEX anymore unless its through bonds. RBL/LOC's are maxed out. They have to rely entirely on net production revenue, after interest expense and dividends, to drill more wells and to replace 45% normalized legacy decline rates each year.

• New wells are not making as much revenue because gassy oil wells are now becoming oily gas wells and liquids well productivity is declining. Wells are NOT as good, on a purely C+C basis. Revenue is declining, accordingly.

• Old legacy tight oil wells are declining at an acclerating rate. The hyperbolic type curve BS was BS. Over 40% of legacy tight oil wells are at, or near, economic limits and are a drain on revenue from NEW wells. Produced water costs are through the roof. 2Q23 earnings were far less than spectacular, save a very few exceptions, an indication that real revenue is not all that great.

• There is no more OPM to borrow, the sector must rely on net revenue for CAPEX, after dividends, and that revenue is NOT sufficient to keep rig rates high.

• Things still "look" positive on a snapshot, but that is only from a growing rig and frac spread count 6 months ago. And DUC's. Remember, in the Permian over, 500 DUC's have been completed in 2023 adding >400,000 BOPD to the big picture and greatly distorting the productivity per drilling rig hooey. People are lying to you about wells being better and rig efficiency leading to higher production rates. They are also lying to you BIG TIME about remaining DUC's that will count.

• The "growth over profit" business model only worked with abundant borrowed CAPEX. Now that the tight oil sector has to stand on its own financial feet it cannot maintain current rig and frac spread counts, even at $80 oil prices.

On why rig counts are falling, standy by for a tidal wave of lies. Anybody, I repeat anybody, that relies on the tight oil phenomena to make money, or feel important on social media, is going to lie to you about why rigs are falling. It will probably have to do with Biden, Wall Street, OPEC, greedy investors, lack of infrastructure or methane and the EPA. Ot it will be about falling demand and how the tight oil sector now, for the first time EVER, has its hands on the pulse of product prices and is voluntarily cutting back...in complete cooperation with OPEC ?

Right.

I tend to believe rig counts are falling because wells are not as productive, they're producing the wrong stuff (more gas and more water), D&C costs are still high, economics suck and net reveune cannot support the current number of rigs running without more outside, borrowed, OPM. I don't see how much of that changes.

This is all a function of resource depletion. Prove to me I am wrong. I will apologize, admit I am idiot, and give you full credit. Go head on with yourself, please.