Big Digital Energy

0:00 Hey everybody, welcome to BDE pre-chuck heading to Vegas for

0:06 the World Almonds Poker Tournament edition. Which one will this be for you? I don't know how many I've actually gone to. It's the 18th overall because we started the same year

0:21 the poker tournament and the roast. I believe this will

0:26 be the 18th roast. It's the 18th World Almonds Poker Tournament. I think I've got a record crowd this year, some 350, 400 people going. So it'll be interesting to be out there and get the pulse,

0:40 see what people are thinking. How many of you made of those 18? Maybe about half of them. And what's your high watermark? High watermark, I finished 9th. I made the final table one year. Gosh.

0:60 That was probably eight or nine years ago. Something like that. The, it was a fun story 'cause what we used to do back in the day, back when I was rich and had my plane, we would take off and we

1:13 would just go pick up all the CEOs in the portfolio. So we would stop off in Dallas, Tulsa, Oak City, Denver. And it would take eight or nine hours to get there, but it was a bunch of folks you

1:27 liked. I had good wine on the plane So it was like a flying cocktail party. So we did it, and it was fun. And anyway, one time I'm on the plane, I'm sitting there talking to Carl Brinsicki,

1:39 who's the best poker player in our industry. He's one that, he started it, as well as he's won it four times. He's hands down the best poker player we've got. And anyway, I'm like, Carl,

1:52 what's the issue? Why do I suck? And he goes, you just pay way too much to see a flop. He goes, I don't want you to play a hand this tournament unless you're willing to raise it. And I was like,

2:04 oh, okay. So I just sat there and basically folded all day long over and they get the tournament done in one day. So they jacked the blinds and

2:16 ridiculously as it goes along. But over the seven hour period, I played 14 hands and I won 12 of them. And that's how I made the final table I just don't have the patience to play good poker 'cause

2:30 playing good poker is just folding, right?

2:35 It is. And I played by the book Blackjack. So I haven't played in any high stakes poker tournaments. So what's the qualifier or how do you get invited? Kurt Hartman's in charge and yes, Kurt for

2:54 an invite So if you want to get an inch here. Let me know, I'll let you know. Hopefully I have some money by then. There we go, yep. All right, story number one, what's going on in energy?

3:08 Well, we had this order actually got issued last week. It's been a bit in the headlines and I think energy specific headlines of maybe taking a bit of a back seat, but the Bureau of Energy

3:23 Management issued a halt work order to Equinor, which is the developer constructor of the New York's Empire when they're currently in the throes of construction of a very large offshore New York wind

3:40 project that was fully permitted from a state and federal level, but interior and to some extent commerce, which actually oddly has marine fisheries. under its umbrella, basically forced the halt

4:00 to

4:03 do some additional environmental assessment. So, you know, what's good for the goose here is good for the danger.

4:12 That's what it looks like. And, you know, this is not trivial to Ecuador because they're, I think, a billion and a half drawn on their facility and, you know, they've got some, they've got

4:26 some, certainly got some equity risk. If this thing ultimately does not move forward, they've got termination payments that they have to make to suppliers, et cetera, et cetera. So it's a pretty

4:40 meaty deal given that the project is in motion. And, you know, we can argue about what the permitting stipulations were under fast tracking all this stuff over the last, you know, four or five

4:53 years, but. We've also spent some time on this show, which Kirk was here talking about, his observations

5:05 of, from, you know, the accent - Dan Wales. Yeah, Dan Wales. So, you know, Trump's been pretty fiery and he's rhetoric about hating wind, et cetera. So, you know, this feels like a kind of

5:21 a headline we can score some points here that we're gonna follow through and what we said we're gonna do You know, by the way, everybody I'd be concerned about.

5:31 The things that are evident in the environmental and wildlife areas that were apparently just, you know, kind of sped past. Those were caution lights. And we're sped past to get this thing

5:44 fast-tracked and under construction. What's the line from the movie Wall Street? Tell me how I feel about it It's like Lord Wyman going off the cliff. but in my brand new Ferrari. I mean, brand

6:00 new Maserati, whatever it is. It's kind of, I've got mixed emotions on this. I'm not a wind fan. That being said, if somebody wants to go build wind farms, I'm not sure they're that bad for the

6:14 environment versus anything else we do. I mean, yes, there's some current concerns there. We should study them, but I think I'd be a hypocrite if I stopped a wind project because of environmental

6:27 concerns. And recall that there have been a number of higher profile project cancellations and pullbacks, and that's just the confluence of events related to primarily what was going on and what has

6:46 been going on with materials inflation and interest rates. So you've got

6:57 PUC is that are part and parcel of these things taking a look at what these projects are ultimately going to

7:09 get finished in terms of cost and budgeting and what that implies for decisions on rate cases and what it ultimately means for the cost of powers and the

7:24 decisions that are made by the PUCs that are involved in these things Maybe, maybe going off the cliff and two of my Maserati's.

7:36 Yeah, exactly. So, yeah. And I mean, if subsidies were removed tax credits withdrawn as part of tax law change, I might be okay there. That's, hey, if you're gonna make an economic decision

7:55 based on tax law and Congress can change the tax law, then so be it. The environmental stuff feels a little petty, but to your point, payback's a bitch. What have we been about in US politics,

8:14 at least at the federal level? And I would argue at most levels, if you pay any attention to state level politics, we've, Petty's a good word.

8:27 Petty is a good word, they. And this is just another one. You know, Equinor has said that they're certainly evaluating their alternatives, which I would assume and what the article implies is,

8:42 you know, looking at litigation And

8:46 judicial relief would probably be.

8:50 the blindingly obvious paths to maybe undo this, like everything else

8:58 that's come out of the last, what is it now, 100 days or so? Right. Didn't we just reach the 100th day of the administration? Yes, and yeah, we're on whatever number in junction, we are

9:12 something. I will say this as a former political science major who made an A in constitutional law. I do think Congress shall make no ex post facto laws. Is a pretty, pretty important principle.

9:32 You know, if you can change the law to go screw people retroactively, that's really bad. That's given too much power to the government, and this has a bit of ex post facto, Hey, we're going to

9:47 yank a permit. We said yes to. nature to it. So, I don't like that, but I do think that the construction started. So, on phase one. So, yeah, this is putting the brakes on, you know, well

10:06 after the

10:09 starting gun was fired.

10:11 Exactly.

10:15 So, it's going to be interesting to see because when you balance that against some other things that we're trying to get done, and we'll talk about it here in the next item is, you know, we talked,

10:26 I know we talked too much about Canada last time, but

10:31 the name Canada with

10:35 the B. You know, this is just really accelerating the permitting process. And there's going to have to be a lot of that to ultimately make the structural shift that we're trying to make and the

10:49 symbolism, the rhetoric around things like, you know, a minerals deal with Ukraine or some type of annexation or deal to bring Greenland into our protectorate is kind of the way I think about it

11:06 and going after these raw materials

11:16 and resources. But so that kind of leads into the next item, which is on on some rare earth, the Chinese government basically said, we're going to ban exports. And if you look at just about

11:28 everything we use and the military uses in daily life, we've got a number of those rare earths and their derivative products and components and everything from military aircraft to cell phones and

11:43 you know a lot of elements that most of us can't even pronounce. But

11:49 So this is not unprecedented that the Chinese have done this. They threatened it during Trump's first term. There was also some territorial dispute with Japan where there was a ban or a threatened

12:04 ban on exports to Japan. And this is kind of a, who's gonna blink?

12:11 We do have a high concentration and not only

12:17 rare earths, raw rare earths, but I think the important element here or the important segment of the value chain rare earths is the Chinese have got a stranglehold on processing and refining of

12:31 those rare earths. And so, for us to affect some kind of reshoring and structural shift and building the capacity domestically to do all this stuff is certainly not measured in a period of time

12:45 between now and election day and 2026 maybe not even in 2028. You know, how fast can you

12:54 set up one of these, for lack of a better term, rare earth refineries. And so there's a bit of

13:07 a high wire going on here with, yes, the strategic long-term aim is to diversify the supplier risk, which we should have started long ago, 'cause rare earths are not rare. They're just

13:20 distributed in

13:23 very low concentrations. You gotta dig up a lot of stuff to get at the quantities of the purity of the rare earths that you want. But the mining is one thing. It's the rest of the supply chain that

13:38 has got a cycle time on it to get it and develop and find alternatives that's going to take, I think more time than we've got politically will end. You know, I have always said on BDE, on Chuck

13:52 Yates needs a job that at the end of the day, America does a crisis really well. You know, I mean, day to day, we don't do so great. A lot of other countries, I think new day to day better than

14:06 we do, but when the Nazis muster up and wanna come after Europe, okay, we got you guys, you know, et cetera We do a crisis really well. The problem we're having is, I think there is a call to

14:26 patriotism that underlies that ability that the nation needs us. My grandmother's gonna go run a riveting factory to build stuff. I think the false alarm crisis we just went through in COVID has

14:44 really taken the wind out of the sails for us wanting to seed power to the government to deal with a crisis. And so maybe I'm conflating all that or making that up. It just seems like the kind of

14:60 folks that would say, Okay, let's go build a rare earth processing plant here. Let's go start mining here. Let's pass laws that allow us to do that. Or saying, Man, I wanna give that power to

15:14 the government Look at

15:18 what's going on now. And what was causing me to rethink this is on the drive back from the office today, I was listening to folks talk about, we literally have imported 15 million people into the

15:34 United States during the Biden term. And there are folks there that want us to have full-blown court cases to be able to export one And that, you know, you run through the mask. we export 350,

15:50 000 people a year. That number of trials would take 250 years. It would take longer than the republic spent around. Yeah, you're talking about deportations. Yeah, and where I

16:05 was going with that is, is just, there are people willing to game the system. So I'm becoming more sympathetic to the people of, I just don't wanna play along with the system. And I think belief

16:19 in the system and patriotism is ultimately why we deal with crisis very well. Coming back to the point you're making, I do think it's a crisis that we don't mind here. We don't process rare earths

16:35 here. We should be doing all of that stuff together, along with creating more cheaper energy to be able to run AI stuff here I think that's it. We've talked about that almost every episode,

16:51 but I'll get off my soap box, but that's a thought I had to say. I think there's a lot of noise in the hole. What should we re-shore and manufacture here? And I think Jack McClendon said he's been

17:06 fairly critical in some of his recent tweets. I like Jack, but when is he not critical? He said, I think

17:15 his metaphor was on economic policy execution here. It's akin to doing a root canal with a 12-gauge,

17:27 but you're right. You're on to something. The profile, let's take the World War II, call it arms and patriotism and all that

17:39 critical industries that we need to dominate. that we need to reshore for national security are things like rare earths and a supply chain that is protected from or diversified away from, you know,

17:58 monopoly or monopolist who's an adversary like China, and at least have the security diversification whether we're going to bring all of that mining and processing back within, you know, the

18:12 friendly confines the US. remains to be seen, and, you know, we

18:21 do stand the risk of having export bands really cripple our development of things like new technologies and AI, et cetera, because a lot of the source components come from, you know, places like

18:37 China that we've now decided to engage in a bit of a trade conflict. You know, there's a lot of stuff that shouldn't be brought back here, but during work and the lead up in the midst of World War

18:50 II, who was better equipped, both from a technology capacity to do it in a cost standpoint, to produce all that stuff that we needed, we

19:04 were, we were, we were, we were, we were the world's leading industrial power. Yeah, and who, who had the East Texas oil field? We did. We did. Yeah. And you touched on it in one of your

19:17 recent podcasts on your probably second favorite subject, it may be your favorite subject, it's the Jones Act. I mean, what is more critical to our ability to trade and protect ourselves and

19:33 mobilize power around the world than ships, and we are woefully behind certainly China in terms of our capacity and ability to build ships. talked about that before too. Yeah, we built five last

19:48 year and they built what 1900, I think, is the numbers I've seen. So our strategic policy objectives generally makes sense. We need that stuff here. The tactics though, when you're faced with

20:03 someone who can literally cut off your supply with the flip of a policy switch, like China can, that dominates or is such a dominant supplier of some of these key items, everything from

20:17 pharmaceuticals to rare earths and process rare earths, etc.

20:22 The tactical and strategic timelines here are mismatched

20:28 and if we get out of sync again politically and we shift back to

20:34 the opposition party having much more of an ability to engage in more Sure.

20:43 petty quid quid proquos, then that just slows things down. I got

20:53 a DM this week from Anon who was listening to last week's BDE, and they said, yeah, everybody talks about pipe and steel, and that's the tariff, but you got to remember, bowels, well-heads,

21:07 everything

21:10 is going to get hit by tariffs as well as chemicals. They're budgeting for a lot in the way of supplies from chemicals, or a lot of

21:26 the suppliers of chemicals come from China as well, and so they're seeing AFEs cross the board going up. So I guess the way I think about it is the electric going to have the patience to be okay

21:43 with the uncertainty upset, the turmoil of looking longer term and sticking with the strategic timeline to affect this structural shift that this is about or are we going to keep flip flopping and

22:03 have these wide pendulum swings politically because we're now what 17 months away from 2026 midterms? Yeah and you know I mean even I

22:20 think we'll do a better job today than we would have two years ago, five years ago, ten years ago but having the patience to just understand the argument hey guys we have to go mine here hey we have

22:35 to buy a smeltering plant we will do or build a smeltering plant, etc.

22:41 We will do it as environmentally safe as we humanly can, but we have to go do it, and if we don't go do it, the, you know, so far the public has fallen for, it's okay if I have my iPhone and we

22:58 build it in China and they process all the minerals over there. Somehow I'm not polluting here 'cause I'm a good person. We gotta come back and just really nail home There's no peeing and non-peeing

23:11 section of the pool. Sorry, I mean, that's just like - That goes for emissions and human rights too. And you look at the amount of Congo, mine, cobalt and just about everything you use on the

23:25 technology side. So out of sight, out of mind and we're politically okay

23:39 A lot of double standards in all of this, and it's very complex.

23:43 You wanna talk about oil? All right, hold on. Chuck Yates, when it comes to oil production in the nation, is like an LA weatherman. It's gonna be sunny, 72 degrees today, and I could just hit

23:58 replay, and I'd lose my job 'cause once a year, it actually rains So, yes, we peaked and we're declining, babe. That's what you're saying. That, and isn't that what I've said? I guess

24:14 sometimes I've been intellectually honest enough to say, we should have Pete and be declining. I don't understand why we keep going up. So, two things on that one. Chicken little was right,

24:28 finally at the end, and the broken watch is right, twice a day. Right Yeah, we used to use that description about the, the futures curve, you know, it's like, it's like a, isn't that an

24:46 Allison Wonderland thing? Right through the looking glass. Stopped watches right twice a day. Yes. Yeah, so there's a tweet from HFI research that caught my eye and I forget who had reposted it.

25:04 I'm mixing X and Twitter here, sorry But they had a graph on basically US oil production for the EIA 914 and then the EIA 914 adjusted for

25:24 petroleum supply monthly. And you do see from, and we'll post this, you do see over the last, really since mid-year last year, You've got a pretty evident, you know, it's a pretty. severe

25:40 sawtooth set of curves. But the more interesting thing or the kind of the subplot here is US gas production continues to rise. And it's as if we're just once again rediscovering that we've got a

26:04 rising geo-war problem. And that's only going to get worse if we continue to - or if we set about reducing completions here in response to a bit of a queasy time here in commodity prices and raining

26:21 back on capital. So US gas production just hit 107 BCF a day. We've got plateauing oil. It's just the nature of the beast. And so what do you do with all of that? resumption of growth is going to

26:35 be accompanied by. higher and higher gas rates, and even plateauing and declining because of, you know, just the physics of rising

26:50 GOR. Is it your sense, or do you know, and this may be a question,

26:58 I know some of the world's best petroleum engineers, reservoir engineers will be out and at WAP, like that too, from hostel be out there, and I'll ask them, I wonder if that GOR. is baked into

27:17 the reserve estimates. I would think at this point in the shale revolution, with as many wells as we've produced, as long as we've had production history, that that's got to be baked in This can't

27:31 be surprising, but, you know, five years ago. Well, let's go seven, eight years ago. It was shocking sometimes when you'd hit that bubble point going, Uh-oh, where the hell all this gas come

27:46 from? We didn't expect that. Well, it's the nature of the beast. I don't care if it's conventional or shale reservoir. It's just the way it works from a reservoir and fluid standpoint. And so,

28:02 as you deplete, you're gonna go through the bubble point, you're gonna see a lot more as we call it solution or associated gas. We have seen a lightning, I believe, of TI and that's a function of

28:18 just increasing geo-wars. And what this ultimately means or why it matters is because you

28:28 certainly have less higher value higher value. component in your BOE stream, if you will. And it also creates operational issues with respect to you run up against capacity limits and I worked

28:44 Prudhoe Bay back in the day and we had a little bit of an internal contest about predicting when Prudhoe was going to go on decline. And it was largely, if not predominantly driven by the limits of

28:57 the gas handling capacity. We, you know, brand these marginal GOR models and, you know, you're limited by the ability to

29:08 handle and move gas, whether that's putting in a pipe somewhere or putting on a ship or as they do at Prudhoe, still to this day, they put most of it back in the gas cap. But you are rate limited

29:19 and as your pressure drops, you've got more and more gas in the equivalent stream and that's it. Same with water.

29:32 and we've had some discussion about water issues and et cetera, but that's what you're saying. I think, and I was talking to somebody the other day when I was on the cell side, I remember having a

29:46 conversation about the Permian in particular and the notion of this phenomenon in a client call talking about rising geo-wars was really the first thing I've ever heard of it And I think the

30:02 investment community getting reacquainted with or understanding what this means is pretty important. You know, I mean, you bring up the interesting point about Prudhobay that it comes down to how

30:16 much gas you can handle. I mean, in effect, that's the whole Permian basin, right? I mean, there are only so many pipelines take gas away. That's why gas trades for nothing Oh.

30:32 And with high BTU gas, the other limiting factor is your NGL process. Yeah, well, where I was going with that is if you think about it, I mean, we've gone from ball to the wall drilling for oil,

30:56 a shale revolution to building that gas processing capability. We were probably over building, because that's just what we do as an industry, because you've got to build for the peak to maybe let's

31:12 keep production flat, slightly gross. And now we may be in a world where - wouldn't surprise me if, over the next six months, we're talking about multiple public companies coming out and saying,

31:23 we just laid our rigs down We're gonna pay off debt with our cash. Buy stock back and we'll start drilling when we hit higher prices again You kind of get the feeling we might be in range with that.

31:36 So So, you know, you you potentially wind up with a lot of takeaway in That scenario So you're you're gonna have the capability of handling the the gas in the oil But I'm where I was going with that

31:53 is I wonder if potentially that causes you to produce faster each Individual wealth because you've got to take away for the natural gas. That's where I was going I if we do all that do we wind up

32:07 with bigger declines in three years where we Were maybe our declines to somewhat degree out in the permeant limited because of our gas takeaway in our gas processing And I don't know the answer to

32:19 that and and the argument is you're going to have more gas volume per unit of oil volume to have to. to handle process and dispose up, going forward. Because you're in

32:35 tier two, et cetera. You're in areas that are

32:42 relatively depleted. You might be closer to the bubble point, et cetera. So there's just gonna be more gas per unit of oil. And that's what continuously rising

32:52 jurors means I don't think the Permian, this has been a while ago, is around

32:59 3, 000 GOR, which means every million barrels a day. You had three BCF a day of associated gas, which is not trivial. All right, all right, so we'll send this. So it will get into the AI

33:15 engine at Collide. Also, when we search on the Collide video, people can see it. Today is the day that oil peaked in America and it is, hold on, April 21st, 2025.

33:36 Also, I think didn't break the tide. You're making this call? Yeah, this is the first call. And then this is the anniversary. Prince died and oil growth died. They were staring at me in the

33:49 first. You're making the call that oil growth died. You're not, you're - Yeah, so we're in decline. Yeah, we will not produce more than this in the foreseeable future. I didn't grab it for the

34:03 run of show, but Josh Young tweeted out something with a graph showing a disconnect. You know, I'm sure you've seen it over time where you have oil prices plotted against the inverse and global

34:19 inventories. Yep.

34:22 Correlation is usually pretty tight and holds. So how we always say, watch inventories. Right. And the last little while there's been a big, big decoupling of that, you know, I think it

34:33 ultimately comes back. And if we, you know, if we compound it with your prediction of, yeah, we've hit peak,

34:43 at least for the time horizon that anyone cares about, then, you know, we ought to see that that relationship resume, if the physical markets are as tight as low and low, lower relative

35:00 inventories would imply they should be. But, you know, the headwinds are coming from a lot of things, not the least of which is concerned about things like recession and what's going on with

35:11 overall global demand. Although I did read, I think Chinese imports were,

35:17 We'll say a record, maybe a

35:20 year or two record.

35:25 That could also be a lot of things too. Yeah, we'll say this. Josh, come join us in the next couple of weeks and update on all this. All right, I definitely have to go pack to get ready for it,

35:41 but I wanna hear about BTA as well. This is kinda cool. Yeah, I'm gonna start this with a plug for a sub-stack called AFE Leaks to which I subscribed last week. It's a hundred bucks a year And I

35:54 have only seen a little bit in terms of their posts but something that caught my eye and their weekly update, I believe it was on Sunday. You know, they send out kind of a pretty granular breakdown

36:11 of rig activity and changes, et cetera. But the more interesting ones are the color on some of the wells, I'm not sure where this information gets sourced, but I'll read it with great interest.

36:19 Apparently a small independent automaton called BTA, Never heard of them before.

36:26 just released the rig on a175 million,

36:32 6, 500 foot Barnett lateral in Crane County.

36:38 And I do have long ago experience and not successful as it was for kind of the same outcome for most people who dabbled out there in the deeper Permian Barnett and other horizons All of that then was

36:54 verticals. I don't want to say it was 2007, 2008. Quicks over had a big position out there. Chesapeake had its Haley JV. And they were drilling some big expensive wells. But apparently this well

37:12 took over six months, five side tracks, and approaching18 million And I guess it was partially completed because they apparently.

37:25 made the decision to to stop work and release the rig after the production casing got stuck 1, 500 feet off TD

37:37 So you know we we got to the point because what we were doing it came what kind of We were doing what I'd call early-stage assets. We'd go You know drill the first horizontal well in a county. We do

37:51 the first big You know frat slick water frack on something that that's kind of was our niche We weren't scared of raw acreage, but this was just typical of every first time Well, we almost got to

38:05 the point where in the economics We were just junk in the first well because you get a new rig and You're drilling into a zen that you haven't really drilled into because usually what your your your

38:19 analogy is or your comp is it's basically a bunch of old crappy verticals, right? And you needed to see production out of them. You actually wanted to see some variability in production. You know,

38:32 every once in a while, I have a really good vertical because it meant that, you know, some sort of natural fracturing or structure or something meant that it caused the reservoir to produce. And

38:43 so you got to drill your horizontal. Maybe you don't have the greatest well control 3D seismic. Did you really go out and shoot it when you're trying to minimize capital to go test rock. So this is

38:56 kind of just par for the course. And so you always overspend on your first well. And the key, you know, Brian Sheffield down in the beat a loose. Same thing. I mean, it's you over you overspend

39:11 on your first well, but it's ultimately going to come back and you're going to see the deliverability. You got to kind of parse it. What kind of production did I get per 1, 000 and start making

39:23 those type of assumptions? So cuters to those guys. I'm quite familiar with this, but I remember meeting with Geo Southern in

39:37 2009, and they were in the midst of drilling their second eagle for Dwellin-Levo County. The first one, they got down at about, it was close to 15 million And in the second one, they'd cut that

39:49 to under 10, and they certainly approved the thesis given the outcome there. I think that was the all cash deal. Devon bought them shortly thereafter for, what was it, about6 billion? So

40:05 yeah, it's, but

40:09 the thing that caught my eye is, you know, having cleared the cobwebs here, You know, we were playing around in that super deep Barnett. in the, in the Permian with, with verticals and kind of

40:23 following along with what Chesapeake was trying to do in Haley. Um, you know, that was significantly over pressured Barnett with a lot of gas. And so

40:36 it's just a gas objective. Do we need, do we need more primary gas objectives in the Permian? It'll be really interesting to, you know, if we ever hear as to what the thesis and,

40:50 you know, what the, what the play concept is. Yeah, and then one just kind of final note because I think this was an interesting lesson I learned. So hitting, hitting a new formation with a

41:05 bigger hammer, it's all about how little can I spend to figure out what the rock can do. I can optimize later, you know, you never, And then you proform it into it. Okay, you know, if I'm

41:21 certain about what the rock will do, I can lean into, I'll drill cheaper five to 10 wells from now and stuff like that. That whole mindset actually gets turned on its head 180 degrees when you go

41:35 to spacing. 'Cause then, you know, when you space,

41:42 what you needed to do was actually go ahead and drill all the wells at once. I spend more money upfront. You probably in effect needed to leave some reserve behind. If you thought eight wells was

41:59 the right spacing, you probably the first time you did one, you needed to do three or maybe four. 'Cause we found there were times where you overdrilled, it wasn't just a case of you spent too

42:10 much capital to get the oil and gas out. you actually damaged the reservoir down there and you would get one third of the reserves you were expecting, you know? So, yeah, no, it's crazy how all

42:24 those lessons we learned about how to create a new play and sell it to Chesapeake or XTO or whoever the buyer did your was when we actually had to then go develop it, we had to go learn a whole new

42:39 set of rules too. Yeah, yeah, there are at least the public sides littered with a few high profile examples, most notable one that I can recall was Concho's Dominator Pat. Yeah. They spent

42:55 upwards of200 million and it was not a flame out, but one plus one didn't equal two. Yeah, definitely less than two. And you know, when you're talking about, okay, on a single well basis, five

43:10 to eight million, not a lot,

43:13 as you're describing that

43:17 rapid fire development, where you're spending a lot of money on multiple downspaced infills and all the facilities, et cetera, you can get to a few hundred million dollars in a hurry, and

43:31 ultimately it's kind of like one of those big ticket deep water dry holes we used to write about. It was totally okay to overspend on figuring out what the rock will do on a first time play. Totally

43:47 not okay to overspend first time you try to figure out spacing, go understand. All right, I'm gonna go pack so that I can go to Vegas. If the BTA guys are out there watching, come on the podcast,

44:00 tell us what happened, tell us about the play. If you've got your acreage locked up, I think that'd be cool to hear. So am I supposed to say good luck or break a leg? Yeah, something like that.

44:13 They, uh, no one to hold them, no one to fold them. That's right. All right, man, safe travels. We look forward to your, uh, to your vibe download the world oil man's poker tournament in the

44:27 midst of all this turmoil, what, what the vibe is. We'll, uh, we know, we know you're a little shy to talk to people, but, you know. Absolutely. Just have a couple of drinks, you'll be fine.

44:39 There we go. All right, everybody, if you liked the podcast, be sure to subscribe to it, share it with a friend. Mark and I will be next, back next week. We'll try to get Kirk out. And like I

44:50 said, Josh, if you wanna come back, we'd love to have you on.