Oil Boom Bust Lather Rinse Repeat Oh Sh*t

[Tom Kirkman + 8,860]

Good analysis, worth reading.  A number of valid points raised for consideration.

The lather-rinse-repeat of the oil boom-bust cycle might be in for a serious jolt this time around.  

U.S. Shale Oil debt could be a seriously flawed economic monkeywrench that screws up the oil "growth" model.

Yes, we are heading for an oil industry boom, and without fail, booms are followed by busts.

This next boom / bust cycle could be a game changer.

Is The Oil Industry Repeating A Critical Error

Note this clarification, at the very bottom of the article:

* For the uninitiated, peak oil in this context refers to the moment in time when the worldwide RATE of oil production reaches a peak and thereafter enters a permanent but possibly bumpy decline. It does NOT, as many wrongly claim, mean the world will run out of oil. In fact, oil will continue to be pumped as long as human society has a need for it and can afford its extraction. The cost of using oil as our main energy source, however, may be too great for the economy to bear in the long run after the peak.

[Curtis Stewart + 32]

The pace where so much money is chasing projects is becoming breathtaking. Belief in how different things are is mind numbing. It seems all sanity is being lost as money is being shoved into this industry that will never see daylight again. What has scared me more than anything is not the shysters and flim-flam artist that have been in this business since Drake but the new masters of the universe who have drunk their own Kool-Aid. They can look at their own balance sheets and see they are not making money! But they go out, raise more and keep up the dance. I don't know if the shoe has already dropped or if it is coming, but when it does, its going to be a doozey.

All those bumps in the back of the new hands heads with the sand companies, service companies and producers along with the water companies, gas processors, and pipeline companies will wonder what has happened when the boss reaches around and "Toggles" them off. This business tends to forget how quick this can happen. In November of 2008 on one Monday in November at 06:00 the Stripes on South Mustang Drive in Andrews Texas was three deep to get a burrito. I could not buy or beg a vacuum truck for a project. Next Monday there was no one, NO ONE buying burrito's. Two weeks later every vacuum truck company I had called earlier was begging for a chance at work. Now 2014 was a slower wreck. There were H&P truck running south through Seminole going to Odessa to stack out. It took about a month before people started to realize what was going on. CapStar rigs on North West County Road in Odessa. When it happens you better have your sock full and a roll in a coffee can in the back yard. I don't think there will be a FED with chingles free $$$ to pull it out next time. What is going to be interesting is this time it may not be a price collapse in oil, it will be a credit scare where $$$ will simple not be available. Who cares if the price of a barrel of oil is $100 if you are loosing $10 a barrel.