06/19/2026
I do not care what oil does at $100.
I care what happens at $50.
That tells me if the deal is real.
One of the first questions I ask on any oil and gas project is: what is the breakeven price of oil for this investment? If the answer requires oil to stay above $80 for the deal to work, I am already moving on.
Our threshold is simple. The project needs to return capital within 24 to 36 months at $65 oil. That gives us a meaningful cushion below current market prices. It means the deal does not depend on a bull market to perform. It works even when things get uncomfortable.
This is not a popular approach. Most investors evaluate opportunities based on the best case scenario. What happens if oil goes to $100? What is the upside if production exceeds projections? Those are fair questions. But they are the wrong starting point.
The right starting point is always the downside. What happens if oil drops? What happens if a well underperforms? What happens if costs come in higher than expected?
If the deal survives those scenarios, then you can start talking about upside. But if the deal breaks under pressure, all the upside in the world does not matter.
Build from the bottom up. Always.