Sam Bradford, The Detroit Lions, and Oil Company Exploration Practices
Sam Bradford has decided to return to OU for another year. Perhaps because he loves college and perhaps because he doesn’t want to play for the Detroit Lions. I got a chance to see the Lions play the Packers when I was back in Wisconsin over the holidays. The Pack defeated the Lions condemning them to an 0-16 season. Calvin Johnson (a Lions’ WR) is quite impressive. The rest of the pride doesn’t look so hot, however. The consensus is that the Lions have been assembled through a series of horrid drafts.
The NFL draft is an interesting animal; the worst team gets the first pick. But football isn’t a game that lends itself to a single player completely changing a team’s fortunes and the draft prevents any team from accumulating more than two or three of the very best players in any year’s draft class. A team like the Lions has to look at itself and realize that they have a history of making bad decisions (I recognize that they fired Matt Millen; the former GM). The last thing they need is the opportunity to spend a great deal of money on a single player.
Oil companies almost never take the top-heavy approach inherent in exercises like the NFL draft. They spread their risk. When very large structures are available, and when large amounts of money are required to drill a prospect, they form exploration partnerships to spread their risk (Actually to minimize the fraction of the exploration budget exposed on any particular venture). For example, here is the original lease agreement for one of the blocks on the Jack prospect in the Gulf of Mexico. Note that this lease was originally a 50-50 partnership between Chevron and Texaco. Even though the bid on that individual lease was chump change ($215,000) neither company wanted to be in a position where exploration of that lease would require an inordinate amount of their exploration budget.
The application of the famous Nebraska Cornhusker Football walk-on program to these issues is left as an exercise for the reader.
Posted: January 21st, 2009 under Uncategorized.