of $6 per thousand cubic foot and oil prices of $40 a barrel are
suggesting to executive accountants that more production could make
more money. It is an intriguing concept that is beginning to be
talked about in corporate board rooms: Perhaps money could be made
in the petroleum business by investing in exploration and development?
As one who has participated
in the boom/bust cycles of the past 50 years, I can point out that
history provides some cautions.
Any fool can cut costs;
damn few people know how to make money by wise investing. Is your
executive suite really up to the new challenge?
You can't make money
if you overestimate worth and future revenues of new projects. Wishful
thinking is how fools daydream.
Beware of buying another
company at a 30 percent premium over market, and immediately claiming
profitable synergies and cost savings. As we say in Texas, "It ain't
a-going to happen, Bubba."
Remember that Persistence
is a virtue; Patience is a girl's name.
And, if the world is
really giving us another oil boom, say ... thanks, Lord!
And promise not to screw
it up again.