“Mr. Gooseball, Greg Shuttlecock, here. With Great American Fracking. We spoke June 17th when you responded to our radio spots on CBIZ for investment opportunities. To quote you then: ‘Maybe later. Thank you. Don’t bother me. Good bye!’ Did I get that right?”
Gooseball had to laugh but caught himself, “Actually, sir, I’m kind of busy.”
“I know you are,” Shuttlecock butt in.” So are we. Last month was the busiest in our history. When oil broke below $80 a barrel, all hell broke loose.
“When it crashed to $70, we started getting flooded with so many mineral rights deals, it was like shooting Democrats on Rodeo Drive.
“And, Hot Dang, now that we got $60 oil, son, it’s like we just found true religion up here on the fourth floor in Minot, North Dakota.”
By this time, Gooseball was really confused. And beginning to salivate a bit. What the hell was going on. He was a sophisticated investor who had bought into everything from Broadway shows to dotcoms to yak farms in Bhutan to a Hooters in Saudi Arabia.
Energy was another story, though. He knew the deal on fracking: potential 30-50 percent returns versus the risks of a total wipeout. Squeezing oil from sand and rock was risky business.
“OK, Greg, you got my interest. How can I make money with plunging oil prices like these? Six months ago, it took $100 oil for a decent return.”
“Great American,” Shuttlecock began, “is one of the country’s largest fracker’s. The farmers who have the mineral rights — the oil rights — the guys who have been saying no to us for years, are suddenly afraid.
“With prices dropping like rocks, the sellers are acting like a crazed herd. Instead of asking for $100,000 an acre and every 5th barrel of oil like six months ago, today they’re happy to get $40K and every 20th barrel. That’s really driving down our costs.
“Wow,” exclaimed Gooseball, “I had no idea. That will show those greedy farmers.”
“There’s more good news,” Shuttlecock was on a roll.
“The oil field supply firms — the pipes and drilling equipments people, and field hands — are now being laid off and desperate for work, so they’re cutting their prices by 30-40%.”
“Ok, I get that costs have been sliced in half,” said Gooseball. “So, gimme the sales pitch.”
“Specifically, for a $500,000 one-quarter share in the ‘Nancy Miller’ well in our newest field just 55 miles west of here, you can expect….”
“Whoa, what’s this ‘Nancy Miller’ business?,” Gooseball demanded.
“It’s very simple,” Shuttlecock explained. “The lead investor, who contributes 50 percent, gets well naming rights.”
“You mean, if I put a million dollars in, it could be the Judy Gooseball well.”
“It will make a helluva holiday gift, Horace.”
“Shuttlecock, you’ve got a deal. Overnight the papers.”
Bill Regardie was the founder of Regardie’s Magazine