Jim Cramer & Dan Dicker Is Shale Oil a Flash in the Pan

12 Comments on "Jim Cramer & Dan Dicker Is Shale Oil a Flash in the Pan"

J-Gav on Sun, 1st Dec 2013 8:10 pm 



Not saying he’s never been right about anything (he did correctly state that by illegally naked short-selling companies you could make a ton of money for example). So for me, anybody who listens to the Criminal Crammer for their news has better options on these subjects …

rollin on Sun, 1st Dec 2013 9:34 pm 



Your better off using a magic eight ball.

mo on Sun, 1st Dec 2013 10:34 pm 



Apparently never read drill baby drill or energy watch groups take on us shale gas production

Plantagenet on Sun, 1st Dec 2013 10:52 pm 



Obama promised Americans they will be energy independent. Who r u gonna trust—-JC or BO?

Newfie on Mon, 2nd Dec 2013 12:38 am 



Whaaaat ??? You mean oil is finite ?

Kenz300 on Mon, 2nd Dec 2013 1:22 am 



Diversify…diversify…diversify…..

ted on Mon, 2nd Dec 2013 3:42 am 



Can anyone tell me the “truth” about what is happening in the Eagle Ford? My brother in-law lives there and everyone is bragging there about how rich they are and how much oil there is…but I wonder what happens there when the oil runs out…and people there have been spending money like there is no tomorrow…Ted

rockman on Mon, 2nd Dec 2013 12:57 pm 



Ted – I’m guessing you’re being a tad sarcastic: “…what happens there when the oil runs out…”. Easy answer: when the well depletes the royalty checks (“mailbox money”) stop. It doesn’t matter how much oil will be produced from the EFS: a well drilled on a mineral owners lease will produce and then will deplete. How much that mineral owner gets depends upon what he was paid in lease bonus and how much oil/NG is produced. This is no different than every other oil/NG play developed in the US. One unique aspect of the EFS was the high lease bonuses once the hype started.

The only ones bragging are the ones who had mineral rights leased and produced. Once the well on their lease depletes the money stops. Maybe forever. Or maybe until the next play, if it exists under their land, develops.

The truth: many land owners have made $millions. One got a check for about $1 billion from Shell Oil just in lease bonus. And then Shell broke their back drilling his lease and has thus stated they were exiting all US shale plays. That land owner will get a nice chunk of charge from the royalty but not nearly as much as he thought he would. BTW: I understand the grandson was given $200 million to start his own oil company.

Old joke: How do you end up with an oil company worth $100 million? Easy: start out with $200 million. LOL. But seriously: I’ve seen that happen a fair number of times.

ted on Mon, 2nd Dec 2013 1:53 pm 



Well my concern is from a personal selfish level. My relatives that live there are living high on the hog so to speak. They think that the oil has at least another 10 years before it starts to peak. They just bought their third house; and laugh at me when I tell them about the history of shale deposits. “I am not from Texas and how could I possibly understand oil?!” Has the Eagleford peaked? If not what is your projection? Can it make it another 10 years? Or are we going to have to go out there and bring them back when all this crashes?

rockman on Mon, 2nd Dec 2013 4:18 pm 



ted – depending on how much acreage they have their income could fall very quickly. You need to think of individual well performance…not the entire EFS trend. It doesn’t matter if the trend will produce a billion bbls of oil in the future if none of it comes off their property. The decline rate of a new EFS well is high…35% to 60% the first year. And while some wells might produce 350k+ bbls of oil many have and will produce less than 30k bo. When were their wells drilled? If the last well went on production 3 or 4 years ago their royalty income has probably dropped 60% to 90% from the peak. There are some other trends coincident with the EFS but not too much activity.

The EFS trend might not peak for 10 years. But their individual wells peaked the first day they started producing and began declining significantly within just a few months. I can assure you short of another drilling boom in another formation under the land their oil/NG royalty revenue has peaked some time ago. Personally I never cared for folks that bragged about money to their relations especially about their royalty income. All they did was being lucky enough to own land in a commercial play. If you like you can send me their names privately and I’ll look up their production if their lease carries the same name. Who knows…they could be lying their ass off…only a small % of Texans are getting big royalty checks.

ted on Mon, 2nd Dec 2013 5:04 pm 



No they are not in the oil bus…per say; they sell real estate and think that I am crazy to tell them to be careful with their money because when it all goes away the town will die or be in steep decline. But I am just another doomer to them trying to rain on their parade. Everyone there is obsessed with oil and that is all they talk about..so and so smells of oil etc… I think there is no “givins” ahead in this time. 10 years for the Eagleford peak? I would have thought more like 3 or 4…..but what do I know, I still drive the same old pickup truck and live in a small efficient house. I see a lot of up hill obstacles for that development…depletion,,,no more fed money and a deep recession…one or all of those scenarios could make their 8,000 square foot house worth pennies on the dollar

Danlxyz on Mon, 2nd Dec 2013 7:58 pm 



What about unitizeation? Do they still do that?
When I for a company with some production, some properties were part of a unit and even if your well was not producing you still got your share of the unit’s production and expenses.