These two stories on the same day in the same paper speaks volumes about my feeling that companies "laying down rigs" to cut costs is a red herring of a story in the oil patch.
The two stories: the first one I just posted moments ago, about MRO stating they are laying down rigs to save costs. The second one, the one linked above: a shortage of truck drivers in the Bakken.
Trucking companies are facing a labor shortage exacerbated by the needs of the oil field, but its growing population has also made North Dakota a more attractive state for truckers.
“The driver shortage is probably one of our biggest concerns,” said Tom Balzer, executive vice president of the North Dakota Motor Carriers Association.
Randy Roberts, terminal manager for Midwest Motor Express in Bismarck, said companies are stealing drivers from one another and many drivers are more likely to travel an hour to the oil field to make $25 an hour.If you still doubt that laying down rigs to cut costs is not a red herring of a story, go back and consider the QEP - Helis deal in which QEP paid somewhere between $20,000 and $40,000/acre depending on how one pencils out the numbers. And the shortage of truck drivers in the oil patch.
I tend to agree. Also QE3 should change the profit dynamic along with better infrastructure. Higher prices and better spreads will only bring more players into the game
ReplyDeleteThank you.
DeleteI am not saying that companies are not looking for ways to cut costs, but I am saying that some folks are putting too much emphasis on rig reduction.
I don't know the correct "MBA" term for it, but "management of oil reserves" is a very, very important part of the oil and gas industry. There are websites devoted to this issue and that plays into this whole issue of active rigs drilling in the Bakken.
Couple of things are happening in regards to service providers. The oil companies have options, whereas two years ago they paid whatever price, whether it be for housing, workers, materials, they paid. Today, there are options. Water storage for example, wasn't any, today many players, as a result prices are dropping. So profitability for the oil companies should start going up along with the price of oil staying strong.
ReplyDeleteSecond, rig count. Look at the number of wells being drilled. There are more wells with less rigs. Why is this? The new rigs are better techology. So the bakken is getting the benefit of the best and brightest equipment. This again is a positive. Use the factory anology, if you have an old factory with old equipment and the company doesn't upgrade, the factory will get shut down. In this case the oil field is the factory and its getting the new equipment to drill with. This is only viewed as a positive. Less rigs, more wells, more wells means more everything. At some point we will cross a line in which more permanent oil service jobs will be in the bakken than the more transient rig jobs. Those people buy homes versus live in a man camp.
All good.
Agree 100%; well said. Thank you for taking time to comment.
DeleteThe over focus on the reduced rig count most likely comes from thoes that want to be the first to claim the boom is going bust. More wishfull thinking from the anti-hydrocarbon types with their very narrow tunnel vision.
ReplyDeleteAgree 100%; well said. Also, going from 218 to 193 is hardly earth-shaking, especially considering how much more each rig is doing compared to two years ago; and considering how many of these rigs are now on the Montana side of the border, but still in the Bakken.
DeleteMy hunch is "we" could go down to 175 active rigs in the Bakken and still outstrip pipeline takeaway capacity.
I'm a retired trucker. I was interested about the trucker shortage. I tried to inquire about jobs there in Williston. I found it almost IMPOSSIBLE to get ANY INFO on how to apply for a trucking job there. Geez ---n c'mon. What does a person click on to find out about truckin jobs there? FRUSTRATIN!!!!
ReplyDeleteDid you try this site:
Deletehttp://www.ndworkforceconnection.com/jobbanks/joblist.asp?session=jobsearch&t=q&geotype=zip&geo=&zip=58801&radius=50&keyword=truck+driver&ff_keyword_option=1,%202&ff_greenjobs=0
At that site, for truck driver, within 50 miles of Wiliston:
DeleteYour search found 59 job(s), representing at least 183 position(s), that matched your search criteria. To change your search criteria, click here.
We have a oil and water hauling operation, can not keep drivers. We provide housing and market rate wages. It is just a tough environment for workers and companies. If you are CDL and Hazmat certified, please contact me. Kent@taxtop.biz
ReplyDeleteThank you. I appreciate folks taking the time to comment, hoping to help others.
DeleteHi Kent, that email address didn't work, do you have another way for us to get ahold of you? thanks
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