Berkshire's Munger Sees Oil To Become Incredibly Short In Supply

SeekingAlpha is reporting:

Initially EOG believed that from 640 acres of its Eagle Ford property the company could recover 4.5 million barrels using 65 acre spacing.

Through trial and error, EOG has discovered that 40 acre spacing is actually going to work better which means the company will increase the amount of oil recovered by 42% and the net present value of that acreage from $76 million to $103 million.

In an age of increasing oil prices, I believe holding companies like EOG that control the most oil in the ground is a sound strategy. Time and experimenting with how to develop the land is going to increase the value of the acreage these companies control.

What Munger has to say as posted at the beginning of the linked article is simply the view of one individual. I think everyone who opines on the future of oil is correct (some will be correct tomorrow, some will be correct in six months, some will be correct in ten years, and some will be correct in 100 years). But everyone will be proven to be correct, just as a broken clock is correct twice a day.  

The important point in the linked article, which I posted in the "indent" above, by the way, has to do with NDIC Case #20678 and Order #22983. I will get to that story later. Stay tuned. It is a great story, noted by a reader. I never would have seen it.