Bust is sooner than you think....

Shell also shelved plans to build a natural gas to liquid fuel refinery in Louisiana.. No longer profitable.
Shell closed drilling operations in Northwest Colorado, to expensive, compared to drilling in Eastern Colorado.

We are at the plateau stage of the oil cycle, just don't know when we will drop off that edge.

Don't buy a house either in the oil patch at this time... they are going for double their value.
And when the bust comes, that house will be worth half its value.. I know rent is expensive also, a supply and demand problem, but if you plan on selling that house after the bust, you will get bottom dollar for it.

 

You would have to know where drilling technology is today to know how long till the bust. The "experts" who claim to "Know" that a bust is coming may not be privy to the information that an oil company exec has. There may be no new technology in the works at all, in that case there could be a bust next week, or Shell has some new science fiction scheme that will blow our minds and there is another 50 years of drilling coming. Unless its the sitting CEO of Shell, Exxon, or BP telling us something (trust me they won't say a word either way) I wouldn't put too much stock in it.

 

Shell is focusing their Nat Gas development to NE BC and building the liquefying plant/export terminal at Kitimat BC. The gas will be bought in Asia where the price is much higher.

Nat Gas has nothing to do with with the current boom in Nor Dak. Price per bbl or Gov't interference are the only things that could stop the boom.

 

Oh but the CEO's do tells us what they are up to. By their actions, and their long term investments... which they are NOT making in 2013 in the USA. Many companies are scaling back on investments, new leases, selling older leases, all the forerunners of the bust. Localized busts, come with very little warning, like when Shell pulled out of Northwest Colorado, announced on June 15, 2013, effective July 1, 2013. Locals who paid attention, saw it coming, as the rigs were not starting new leases.

 

I was told the Midland area has 800+ active drilling rigs right now...

 

I was told the state of Texas has 800+ active rigs.

 

The entire state of texas has 800+ rigs.... and 226 of those are in the eagle ford. 443 are in the permian basin.

[h=1]Baker Hughes: US drilling rig count lifts to 1,775[/h]

HOUSTON, Dec. 6
12/06/2013
By OGJ editors




The US drilling rig count jumped 12 units to reach 1,775 rigs working in the week ended Dec. 6, Baker Hughes Inc. reported.
Nine from that total were land-based rigs, which reached a total of 1,696. Rigs drilling offshore increased 4 units to 61. Rigs drilling in inland waters lost 1 unit to 18.
Gas rigs added 8 units to reach a total of 375 while oil rigs gained 6 units to 1,397. Rigs considered unclassified dropped 2 units to 3 units working.
Directional drilling rigs edged up a single unit to 223. Horizontal drilling rigs jumped 10 units to 1,137.
In Canada, a tally of 17 more units brought the country’s total for the week to 402. Oil rigs comprised most of that gain, collecting 15 more units from a week ago to 230. Gas rigs claimed 2 more units to reach 172.
Major states, basins
Productive weeks in Texas and Oklahoma headlined changes in the major oil- and gas-producing states. An 8-unit gain in the Lone Star State gave it a total of 842 rigs working. A 5-unit rise in Oklahoma lifted its total to 180. California was up 2 to 37. West Virginia, Utah, and Alaska each added a single unit to 35, 28, and 9, respectively. Unchanged from a week ago were New Mexico at 78, Wyoming at 57, Ohio at 35, Kansas at 30, and Arkansas at 11. North Dakota and Colorado ended the week down 1 unit each, with respective counts of 167 and 66. Louisiana, at 110, and Pennsylvania, at 53, were both off this week by 2 rigs each.
Movement in the major US basins included a 3-unit boost to the Permian to 473 and a 2-unit addition to the Haynesville to 40. A few states lost 1 unit, including the Eagle Ford at 226, Williston at 179, Marcellus at 86, and DJ-Niobrara at 48.

 

That makes more sense...then again they said "around here"...which I took as Midland area...I guess "around here" meant Texas LOL!

I see a lot of them, I know that!

 

True but in the last year alone the area has also had a construction boom of new apartment complexes and houses. About 50 complexes have gone up in the Midland Odessa area in the last 18 months, probably more Also 2 new truck stops that are almost always full

 

here is a CEO telling us exactly what they are doing...
Capital Spending and Cost Overview
During the 2013 third quarter, Chesapeake operated an average of 67 rigs and invested approximately $1.2 billion in drilling and completion activities. This represents a decrease of approximately $350 million compared to the 2013 second quarter.

Mr. Lawler noted, "Although we have reduced our drilling and completion activities in the second half of 2013 and we are planning for a lower capital expenditure budget next year,we expect to continue delivering organic production growth in 2014. We anticipate our growth will be led by an increase in oil production from the Eagle Ford Shale and an increase in natural gas and NGL production from the Utica and Marcellus shales, which will benefit from new gas processing and pipeline takeaway capacity."

More pipeline = less need for trucks.
Fewer rigs drilling = less need for trucks.