The graph below shows that the US oil rig count has been slightly declining despite much higher oil prices. While many investors may assume that no growth in the number of operating oil rigs implies limited oil production growth, that assumption is not necessarily true.
To wit, we share Diamondback Energy's (NASDAQ:FANG) May 2026 stockholder letter. This note to shareholders describes a strategic pivot they are taking to increase production almost immediately without adding rigs and drilling new wells.
Diamondback's strategy revolves around its DUC (drilled but uncompleted) well inventory. They have decided to work down its DUC inventories to maintain production at over 520,000 barrels of oil per day, which is 3% above its original 2026 guidance. The rigs already exist and are in place.
Thus, the time for completion crews to bring oil to market is much shorter than the time required to drill new wells. To execute, Diamondback plans to run five completion crews consistently through the rest of the year and maintain its current rig count.
Because of our positioning, our preparation, and this price signal, we are bringing incremental barrels to the market immediately.
The bottom line: Diamondback's fast production response can capitalize on high oil prices almost immediately without betting they will remain high for the next 4-6 months, which is how long it takes to see oil being produced from a new rig.
Famed investor Bill Ackman recently brought his private fund, Pershing Square Holdings (NYSE:PSUS), to market. Trading under the symbol PSUS, the IPO underperformed Ackman's expectations. PSUS is a closed-end fund, meaning it sells a fixed number of shares in a public offering. Shareholders can exit the fund only by selling their stakes to other investors at the current market price, regardless of the fund's actual asset value.
When you buy or sell a mutual fund, you transact at the fund's NAV. ETFs work similarly, with arbitrageurs ensuring the market price stays close to NAV. Closed-end funds have no such mechanism. They raise a fixed pool of capital in an IPO and trade like a stock from that point forward. The market price can drift from the NAV, and often does. In some cases, closed-end funds can trade at a significant discount to NAV indefinitely.
Prior to its IPO, Ackman's PSUS traded around a 30% discount to NAV for years. Simply put, investors could buy $1.00 of Ackman's portfolio for roughly $0.70. At its IPO last week, the discount improved to 16%. Ackman recently said on CNBC that "we look nothing like other closed-end funds," arguing that the quality of the underlying portfolio, the permanent capital structure, and the absence of performance fees distinguish PSUS from typical closed-end funds. The market's response on day one suggests investors aren't fully buying his argument.
The graph below shows that at a current price of $42.98, PSUS trades at 12% discount to its $49 NAV.