Land Drillers Look Attractive in Light of Premium Rig Shift
Land drillers, as a group, are attractively valued today. We believe fears of another collapse in drilling activity similar to 2009 are overdone. While these drillers have no economic moat, their current competitive position is perhaps the best in the past decade. Prior industry cycles were driven by supply/demand dynamics, but with a U.S. fleet of mostly mechanical rigs that were refurbished over time as they aged. In our view, there was little differentiation between the top drillers and the rest of the industry. However, the shift toward horizontal and oil-directed drilling away from vertical and gas-directed drilling, thanks to the emergence of various shale plays in the United States, has driven huge demand for new premium land rigs, allowing the industry’s top drillers to differentiate themselves from smaller peers by offering more powerful rigs.
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BS Ranch Perspective:
Land Drilling is looking attractive now?? now it is looking attractive.. there has been many reports that there is oil located still in Pennsylvania & North Dakota, in fact in the last ten years there has been what is called a "Black Gold Rush" that has been going on there in those states.. The First Oil Strike in the United States was located, Not in Texas, but in Pennsylvania. There is still oil being searched out, and drilled for in that state.
The Modern Methods of locating Oil, using Geology, and Satellites, and exploration methods have reported that there is more then likely the biggest oil reserves still under the Rocky Mountains here in the United States, These Reports have said the Oil Reserves under the Rockies, are as big or bigger then the reserves left in Saudi Arabia! If this is true, why don't they just go after them now.. This find could lower the price of the Oil that in the last two years has more then doubled in price per Gallon at the Pump, since 2008, when the Current President took Office...
These Higher Prices have done very little to curve the Appetite for Oil in the United States of America, since 2008 when almost in one year the price for Gas doubled at the pump.. I can remember the day when it cost approximately $50.00 to fill my truck, now it costs me over $120.00 to fill my tank when the gauge is pointing just above the large "E"...
Now to this report I have to say, "DRILL BABY DRILL!!!"
THE QUESTION STILL REMAINS, WHY IS THE PRICE OF DIESEL AT THE PUMP MORE EXPENSIVE THEN PREMIUM GAS AT THE PUMP.. SINCE THE COST TO MAKE DIESEL IS 1/10TH THE COST TO MAKE GASOLINE?? ANYONE? ANYONE??
It is my belief that this price difference is the way that it is because the gas prices at the pump is being controlled by the Secretary of Energy and the President of the United States of America (POTUS)!!.....
If the prices are not being controlled by the POTUS, or Energy Secretary, is probably not set by them, but possibly Suggested by the Energy Secretary, and or the POTUS himself... What I have done here is Speculated.. that the price of Gas and Diesel is set by the Energy Secretary, and possibly even the POTUS... It is funny because Gas/Diesel Prices are set through what is known as Speculators... People that get paid to "Guess" how much oil there is or will be available, by what is going on Politically in the Middle East!! The difference is that I speculated without getting paid, so I am an Amateur Speculator... HA!
Definition of Speculator: a person inexperienced or unskilled in a particular activity.........
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