> People think the oil business is all about drilling. In reality it's first about reserves While this is true traditionally, shale is a different ballgame. A

> People think the oil business is all about drilling. In reality it's first about reserves While this is true traditionally, shale is a different ballgame. A lot of the money spent in these shale plays is gone forever. If you spend $8 million to drill a well and expect to make a 20% ROR at $70 oil, you're going to have a bad time when the price of WTI collapses to $40. And these shale wells have such fast decline rates that 10 years later they'll be making 1/100th of their initial rates. You either make your money fast, or take a big loss on the chin. The major price decline beginning in 2014 and the huge hit during the pandemic (oil prices went negative, remember!) has made shale a major loser for investors. And plenty of the reserves companies booked had to be written off, either because of overly optimistic price requirements or inflated production estimates. Just look at Apache's Alpine High fiasco.