Dear Reservoir Engineers (you knew it was coming)

You are the steward of asset value and since it’s just you and me talking, can we be honest? The gig is up. Spacing tests are coming out and it looks bad. In the Bakken; Stack; Eagleford; Midland; Delaware. Everywhere is showing significant EUR degradation because YOU recommended drilling wells too close together. Increased density has massively hurt EURs per well and we both know “b” factors ARE lower and terminal declines ARE higher at tighter spacing and commodity price isn’t going to cover your mistake.

Sure- I get that you are thinking no one will know for 2 years and by then, you will have a different role and won’t be blamed …but your company might be Chapter 11 by then. If you ran your type curve economics with a 20% lower “b” and 20% higher df…everyone would see you aren’t actually making money at this density.

I forgive you. I understand that your boss wanted higher inventory so you increased it by decreasing the distance between wells and not changing EURs. But making one Tier 1 location into four Tier 3 locations is not really an accomplishment.

It’s hard to tell MGMT your inventory is 40% lower than they think but $1 in quarters is still $1. And what’s worse, you know I’m right.