More new lows as the night trade opens. Jan crude new low of 64.78.

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Yeah. No chance Chevron is laying people off yet. I am talking about operators specifically. Service companies will have to lay off well before the operators would be my guess. Anyone heard of operators laying people off?

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The graph that was shown earlier in this thread showed CVX more leveraged compared to their peers. This was different that my perception of CVX (those people know how to find oil). If the Woodmac article was correct, I am curious as to why your so confident in CVX's response to such a big drop in revenue.

$64.13 new low.

Going to be a December to Remember...

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Most have no concept how bad it will get in Houstin in 2016. Many families will go from close to $200k in dual income to unemployment overnight.

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Eh. It's a cyclical business.

Real Estate bubble in Houston gonna pop?

Literally just got a job offer for a fracking/oilfield services company.... Finance role. It's a pay raise, but this thread makes me think I'd be absolutely crazy to accept. One yr old daughter at home.

Decisions decisions....

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Literally just got a job offer for a fracking/oilfield services company.... Finance role. It's a pay raise, but this thread makes me think I'd be absolutely crazy to accept. One yr old daughter at home.

Decisions decisions....

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I wouldn't jump into a service company right now. But I'm relatively risk-adverse.

looking at the chart, I think 55 is the bottom for WTI which is also around the 50% retracement from yearly high.

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Literally just got a job offer for a fracking/oilfield services company.... Finance role. It's a pay raise, but this thread makes me think I'd be absolutely crazy to accept. One yr old daughter at home.

Decisions decisions....

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Orders usually come 6 months in advance, so you may already have an idea how much things are slowing down. Unfortunately it seems that the worst is yet to come. What E&Ps/projects/plays are they exposed to?

I work for a service company in west Texas. I don't see you being effected much by a slowdown if you are in a finance role. They will lay off the new hands first and then trickle down the line. I see is losing our high profit margins and keeping the amount of work until layoffs actually occur. As of right now in the Permian the current attitude is to ride it out and see what happens. They have invested too much money in facilities etc to just start haulting operations. If prices do
Stay like this we will find out what company managed their money and what companies are riddled in debt. As of right now we have five crews, are booked up for a while and haven't heard any talk of slowing down yet. It will be interesting and hopefully prices will go back up a little to keep people from screaming the sky is falling.

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Literally just got a job offer for a fracking/oilfield services company.... Finance role. It's a pay raise, but this thread makes me think I'd be absolutely crazy to accept. One yr old daughter at home.

Decisions decisions....

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Maybe they need help cleaning up their balance sheet

Its a small private company, mainly fracking. They are an operating company of a large private equity firm. Plan is to do an IPO eventually. Have crews in PA, ND, TX and Alberta.

Well, PA you are probably fine. Very low gas break evens and if associated gas production goes down as a result of lower liquids production, we may even see increase in gas prices.

ND depends where you are at, but that can be pretty costly as well as parts of Texas. As someone mentioned, you are probably safer in finance than guys in ops. Then again, you are PE backed so that's always a risk when it comes to significant cost cutting and knee jerk reactions.

Most oil companies did not lay people off the last time oil spiked down. Doubt they will do it this time either. January is awfully close to be laying people off IMO. Maybe CVX is much different than I perceive but I perceive them to be stronger than most. If oil prices stay below $70 for 6+ months, I think companies will start laying people off. Who knows.

Now pundits are coming out of the wood work calling for further immediate declines. So look for a very strong relief rally starting very soon.

If you have any questions about PA, OH, WV please let me know. I've been in Pittsburgh since 2008. I'm happy to help

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Most oil companies did not lay people off the last time oil spiked down. Doubt they will do it this time either. January is awfully close to be laying people off IMO. Maybe CVX is much different than I perceive but I perceive them to be stronger than most. If oil prices stay below $70 for 6+ months, I think companies will start laying people off. Who knows.

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Exactly.

Next year, first hurricane in the Gulf, boom 120/bbl.

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Most oil companies did not lay people off the last time oil spiked down. Doubt they will do it this time either. January is awfully close to be laying people off IMO. Maybe CVX is much different than I perceive but I perceive them to be stronger than most. If oil prices stay below $70 for 6+ months, I think companies will start laying people off. Who knows.

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Exactly.

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I am Pete "78" and you bet their will be layoffs if low oil prices persist. A few years ago a friend who started with me at Getty, which was bought by Texaco, which was bought by Chevron discussed surviving all the downsizing. The geologists got creamed much worse than the engineers.

The reason why 'blood isn't in the streets' is because most people still think a 40% haircut from the highs is no big deal.

You guys seem to be soley talking about operators and the big guys but remember that there are probably more folks working in the equipment manufacturing and the service sector than for the actual operators. Hell of a lot less glamorous, lower pay, crappy benefits , few of the " perks" that the average "ChevronShellEnsco" type gets........... . These are the folks that will be feeling it first. The majors cut their E&P budgetsby say 10% and that translates to a direct loss of business for many manufacturers. A 10% cut may be an entire project that some manufacturing facility or yard has geared up for and ....instant layoff.
I've been through this too damn times, I could write the book. I am saying FOR A FACT that the discussions and planning has already started. The "force multiplier" effect of these cuts is HUGE in areas like Houston. Projct XYZ gets shelved...only a 5% cut for MegaOil but it kills 40% of little Whoopalloy Valve's business which kills 25% of Acme Coatings business which kills 10% of Spectacular Paints business....on and on and suddenly you have a few thousand fewer jobs in NW Houston. It just feeds on itself. I hope to HELL that I may be premature on this since this will be my LAST rodeo, NO WAY I survive another one of these things....

who do yo work for?

I am hoping that a strong natural gas price helps us weather the storm.

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who do yo work for?

I am hoping that a strong natural gas price helps us weather the storm.

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If we have another cold winter, that could help NG pick back up. But there is so much production being choked back or on the sidelines since it's HBP'd that over supply could happen again quickly.

Guess we will find out who did the best job hedging oil and keeping debt low in 2015.

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You guys seem to be soley talking about operators and the big guys but remember that there are probably more folks working in the equipment manufacturing and the service sector than for the actual operators. Hell of a lot less glamorous, lower pay, crappy benefits , few of the " perks" that the average "ChevronShellEnsco" type gets........... . These are the folks that will be feeling it first. The majors cut their E&P budgetsby say 10% and that translates to a direct loss of business for many manufacturers. A 10% cut may be an entire project that some manufacturing facility or yard has geared up for and ....instant layoff.
I've been through this too damn times, I could write the book. I am saying FOR A FACT that the discussions and planning has already started. The "force multiplier" effect of these cuts is HUGE in areas like Houston. Projct XYZ gets shelved...only a 5% cut for MegaOil but it kills 40% of little Whoopalloy Valve's business which kills 25% of Acme Coatings business which kills 10% of Spectacular Paints business....on and on and suddenly you have a few thousand fewer jobs in NW Houston. It just feeds on itself. I hope to HELL that I may be premature on this since this will be my LAST rodeo, NO WAY I survive another one of these things....

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You young guys need to listen to Original AG 76's advice. I started in the oil biz in 1980 and lived through the oil sector collapse of the mid 1980s. Some of his earlier posts about working for several years not knowing if that was your last week hit home as that is exactly what I experienced as well. It was so uncertain, that my wife and I put off having kids for several years. I was transferred during the downturn and wisely rented instead of bought in the new city. Meanwhile, I fielded calls from classmates from A&M as well as other contacts in the industry after they were laid off and were looking for work. It was so depressing I finally changed careers in the late 1980s and never looked back.

Another point Original AG 76 made is dead on...the service sector of the oil business will take the brunt of the slowdown. Employment will absolutely whipsaw...and quickly as the bids and notice of proposals dry up from the oil companies. As an example, the small office I was in went from spending several million $/year on seismic data in the early 1980s to a few hundred thousand/year by the late 1980s. If you work for a company that supplies equipment or services that are mostly related to exploration...look out. Those companies more focused on production will fare better as companies will still produce existing oil fields, but they will really scale back on exploration.

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You young guys need to listen to Original AG 76's advice.

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What advice? All I see is "the sky is about to fall, so..."

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You young guys need to listen to Original AG 76's advice.

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What advice? All I see is "the sky is about to fall, so..."

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I don't think you saw personnel cuts in '08-'09 in the majors for one, due to one the amazing run in prices through about August of 2008, and then speed of the crash and recovery. Lay off discussions were occurring and plans were probably already built, but there were signs of recovery before anyone pulled the trigger in a major way.

As to CVX they did announce 225 layoffs in Aberdeen and "restructuring" in Pennsylvania.

I work in pipeline construction, how worried should I be by all this doom and gloom? This thread has me freaking out.

Please excuse me Martin. I thought this was a discussion. I'm not in the advise business nearly sharing some very painful experiences.
Cutbacks have already started. There have been sime layoffs and I am afraid that we MAY see a huge crash. I hope I am wrong but feel free to attack the messenger.
Advise column closed!

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You young guys need to listen to Original AG 76's advice.

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What advice? All I see is "the sky is about to fall, so..."

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Well this for one:

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This BOOM has been going on too damn long and has to end at some time. ALL of my fellow old timers are saying the same thing and , sadly, virtually 100% of the younger guys are completely in denial. Our corp genii are in the same mode as they were in 82 ( those 82 guys are al dead or long retired ). We have been there before and can smell it on the horizon.
This will be the last hurrah for most of us vets of the "BUST" , its still gonna take a couple of years to develop but in 2-3 years we will be right at retirement age and will be the first to go. I hope I'm wrong and the boom lasts another decade like all the corp prognosticators say BUT.....

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There are a lot of parallels between what is happening now and the bust of the mid 1980s. In the early 1980s as production exceeded demand the Saudis tried to prop up prices by cutting production. No one else in OPEC followed suit. After a few years the Saudis were only producing half or less of what they used to. They finally said F' it and decided to teach the rest of OPEC a lesson. Also their economy was hammered as they were now spending way more than they were taking in from oil sales. They raised production back to where it was and absolutely tanked the price of oil.

Fast forward to today. The Saudis learned their lesson from the early 1980s and are keeping their production constant and just letting the free market take care of it, meaning prices will continue dropping. How much further? I do not know. It will correct itself as demand will catch up and the pace of new reserves being found drops with decreased exploration drilling. That may take a few years, it may take a decade.

So his advice, while not stated in explicit step by step detail can be quickly inferred from his history lesson.

If you are in the oil business, especially if you work for an oil service company (drilling, seismic, well logging, etc etc) batten down the hatches. Don't take on new personal debt. start looking at a plan B. In my personal case, I started taking MBA classes at night while still employed in the oil business so that I had more options if I got whacked. Hopefully the downturn will be mild and most people will still have jobs. I sure hope so. But to give you guys some idea of the scope of the downturn in the 1980s, IIRC the oil economy lost 400,000 jobs in the space of a few years. Way more than the auto downturn that the press fretted about at the time.

'Restructuring' up in PA = layoffs and internal transfers. I'm up there and it's going to be a nervous few months....

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Please excuse me Martin. I thought this was a discussion. I'm not in the advise business nearly sharing some very painful experiences.

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Not your fault. Someone else was saying you were giving advice.

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Don't take on new personal debt. start looking at a plan B. In my personal case, I started taking MBA classes at night while still employed in the oil business so that I had more options if I got whacked.

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Good idea. What is your plan B? What industry do oil & gas engineers go to?

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Please excuse me Martin. I thought this was a discussion. I'm not in the advise business nearly sharing some very painful experiences.

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Not your fault. Someone else was saying you were giving advice.

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Don't take on new personal debt. start looking at a plan B. In my personal case, I started taking MBA classes at night while still employed in the oil business so that I had more options if I got whacked.

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Good idea. What is your plan B? What industry do oil & gas engineers go to?

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Martin, yes that was me that was saying that OriginalAg was giving advice. He was giving advice on how to put the current downturn in perspective. Not what to do about it.

Well, what do Geophysicists do? I was in the same boat as you are now. There was basically no market for my skills other than O&G and no one, I mean no one was hiring. Some of my classmates at A&M stayed in O&G. Some of us went back to school. You may have to retrain. You may have to go back to school to get a different type of engineering degree. Or something else. It is hard. I don't wish it on anyone. I finished my MBA and got a good job with a good high tech company....making half of what I did in the oil business. I am not trying to be Debbie Downer here, but everyone would be wise to look at oil prices and play out in their head what that may mean for them personally and start thinking about what ifs.