With natural gas, what happened was everybody started drilling. And they
rushed out and had a wonderful time. But now it’s four or five years
later, and we’re finding out these wells decline very quickly. And so
people are finding it’s not nearly as much fun as it was in the
beginning, especially in the beginning when a lot of them had to drill
acreage quickly to maintain their leasehold obligations.
I think the reserves may not be what we thought. And some of the gas
companies have reported decreases in their estimated reserves because
the wells dry up pretty quickly.
The same is happening with oil. The oil boom started later than the boom
in shale gas. And we’re finding that those wells decline at the rate
of, depending on who you believe, 38 to 69 percent in the first year. I
don’t have a clue, because I've never drilled a shale oil well. But we
do know that those are fairly short-lived, too. So this has been great
fun, and it may last a while. But I would suspect it’s not quite the
boom that the press seems to think it is. We’ll find out.
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.