NEW YORK (Real Money) -- I got a chill down my spine last night when I was interviewing Mark Papa, the retiring CEO of EOG Resources (EOG), the fastest-growing major independent oil company in this country.
After listening to how the technology that extracts oil from rock has improved to the point where two areas thought to be just holding steady -- West Eagle Ford and Bakken -- are now accelerating, I was eager to hear about how the Permian Basin could be accelerating.
Was the Permian, I asked, bigger than anyone thought? Was this revitalized field going to blow people away as Pioneer Natural Resources (PXD), the king of the Permian, said it would on Mad Money the other night?
The soft-spoken but clipped Papa answered, "No." The Permian was not going to be as big as I thought. It was not going to turn out to be the biggest new field in North America, it was not going to be the second-largest oil field after Saudi Arabia.Plus, he said, it was time to curb my enthusiasm about finding oil and producing it in this country because we may actually be near peak production even after all the new oil's been found and that the revolution, at least in oil and not natural gas, may soon start to become played out. I was taken aback because I was thinking we are in its infancy and he was thinking that we are more mature. Of course, if Papa is right then the move in these hyper-growth oils is at its zenith, even, perhaps, EOG, although the company did grow production an astounding 39%. I actually don't know what to make of this. I do know the Eagle Ford fields of EOG are every bit as bountiful as Saudi Arabia and I know that Papa's a conservative man. But I think that this is the first that I have heard about how the renaissance may not get any better. Papa, in short, is on the other side of the equation from Scott Sheffield, the CEO of Pioneer, who is saying the Permian is gigantic. Who's right? Frankly, that's not the question. The better way to put things is to simply say that it turns out there may be another side to the story of our new, reinvigorated oil exploration and production business in this country and it may not be as rosy as we thought. Stay tuned to this. We need to find out if that skepticism, and not the sudden decline in oil, is behind the retreat of so many of the aggressive, senior-growth oils in this country. Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned. Editor's Note: This article was originally published at 7:31 a.m. EST on Real Money on Nov. 8.