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Its been great, shale, but whoa Nellie, wait until you see the total bill.

OPEC's control of world wide oil prices have caused a lot of pre-mature abandonments and orphaned wells in America since 1975; in the mid 1980's OPEC managed to drive the price of WTI down into single digits.

U.S. shale used debt to grow LTO by 4.8 MM BOPD from 2009-2014 and that oil, on an otherwise balanced world market, drove the price down from the mid 90's to the mid 30's. OPEC did not do THAT, the American shale sector did that. Its estimated that 180,000 stripper wells, and nearly 350,000 BOPD were abandoned after 2015 (NSWA). Development of deep-water Gulf of Mexico came to a complete standstill after 2015.

COVID in 2020 and ensuing oil price collapses caused the abandonment of thousands of marginal wells in the U.S.

Today over 50% of all the U.S. HZ tight oil wells drilled in the country since 2008 produce less than 25 BOPD, and water, on artificial lift, mostly rod lift. At those production levels the annualized decline for those wells is 12% and the older the wells get, the steeper that 'terminal" decline generally becomes (Enverus, EIA, Novi). In the DJ and Eagle Ford plays those terminal decline rates are 18-20% per year.

These <25 BOPD wells are hanging on by an economic thread at $70 WTI and $1 Waha gas. Below $50 most of these estimated 65,000 wells nationwide, soon to be making <15 BOPD, reach economic limits and are gonners, particularly if they make water. At the close of 2023 there 6,800 wells in the Permian already temporarily abandoned (not the same as a DUC) and mis-classified DUC's (dead DUC's since 2020) likely ready to be plugged. IMO, half the well inventory in the Eagle Ford is on pump off controls and shut-in 6 days a week; they need to be plugged even at $70 WTI.

Do the math on 15 BOPD, use 25% royalty burdens, don't forget something in the order of $8 per incremental BO for produced water, IF you can dispose of it, interest on long term debt, G&A overhead, that well's role in paying down long term debt and that wells obligation to pay its own P,A and D costs. Think you can still make money at 15 BOPD and $50? It takes 2 years to pay for replacing tubing, rods, a TAC and DHP on the simplest of down hole maintenance interventions. Replace a tail bearing on Lufkin 620 and you are net income neutral for six months.

This dude on the right wants oil prices below $50 and he doesn't care if the U.S. shale sector drills "itself out of business" doing it.

Okeedokee then, so who is going to pay for all the plugging? The after-birth of the drill baby, drill plan on the HZ sector alone is about $10B of immediate P,A and D costs, pad per pad. Start taking pipe out of the ground and putting land back the way it was and those costs tripple.

Then there are all the additional stripper wells in the U.S, still making 3 BOPD, or 40 MCFGPD; at below $50 they go back to Hospice Care and then to their graves. If the shale sector hadn't over-produced 2010-2014, how many wells, and how much conventional production, the kind that declines <3% annually, might have been saved?

If you think the U.S. tight oil sector has all its retirement costs set aside for a rainy day, your nuts. Look at SEC statements. Do you hear Chris Wright, or Harold Hamm, or Mike Wirth, or the Exxon Petroluem, sorry, I mean the American Petroleum Institute talk about this side-affects of drill baby, drill ?

Nope. Those folks all want fewer regulations, not more, and they would all whine like little girls about increasing bond requirements, or pre-paying plugging costs for the shale sector, or taxing exports to raise money for plugging.

The Permian barrel quote pisses me off. I think the entire U.S. shale sector thinks of itself as "bullet-proof" and is sure its too big, and too important...to fail. If it takes down the rest of the U.S domestic oil and gas industry with it, so be it.

Its an odd attitude to have when 70% of your entire production has to be exported to foreign countries, below costs, to get rid of the stuff.

Author's note: I drilled and/or participated in over 400 new wells and bought another 300 already producing from other operators over 60 years. Never once did I not plug and abandoned a well I was responsbile for, all them under TRRC guidelines and witnessed by the State. From my standpoint, if you operate a well, then just leave it for somebody else to plug, however broke you think you were, or whomever you need to blame for your "misfortunes," you should be deported to the Falklands. You can operate down there.