http://www.usatoday.com/story/money/mar ... /16282301/
If you do a basic search for the term "US oil production," chances are that you will come across a slew of articles singing the praises of the oil and gas industry. Adjectives like "flooding" and "overwhelming" are used to describe the amount of production coming online, and Americans are having a serious conversation about the possibility of overturning decades-old laws that restrict the export of oil. Here's the funny thing, though: This isn't the first time that America has experienced a near euphoric mindset surrounding a surge in a high value commodity
Everyone knows the investing mantra that past performance does not guarantee future results, but knowing the history behind these previous booms can teach us some very valuable lessons about how to approach this one. So let's take a stroll down memory lane and see what we can learn from three previous booms: ...
...The lesson here is that even the most lucrative ventures--whether gold, oil, or even precious minerals--can be a poor investment if the costs are simply too high. This is a message that certainly isn't lost on today's energy boom, either. Some may recall that just a couple years ago, Chesapeake Energy was in a situation where despite the promise it held with vast acreage positions in several prospective shale formations, the costs of holding those leases as well as the debt load to cover their purchase became extremely cumbersome and impeded its ability to spend on the actual development of those fields. This forced Chesapeake to sell off huge swaths of land to lower lease expenses and trim its debt profile, leaving it with a much smaller portfolio, but a much more profitable one today