Probably Undeveloped

The problem with shale isn’t the economic viability of the rock. There are thousands, if not tens of thousands, of well locations (yes mostly in Permian) that will generate a half-cycle return of >40% IRR. The problem with shale are the companies that operate in shale.

We must develop these assets, slowly, smartly.. understand the science behind spacing and well interference. Stop exaggerating to investors about the future of “manufacturing phase”. Reservoirs have always been hard and will continue to be. Cut overhead. Slow down. God bless

Now, instead of taking their medicine, reducing G&A (mostly their own pay) and just being honest with shareholders about the complexity of their assets, they are personally incentivized to perpetuate the story. Investors have lost faith and rightfully so.

For years management teams overhyped the spacing, inventory and typecurve. Frankly, it was out of ignorance because most had barely even begun delineation of their assets. They took on too much debt, paid too much for assets, and now have dug themselves a deep hole.