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Is Houston in total chaos? I have a business trip there soon and need to know what survival gear to bring.

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Everyone in finance has a worried look on their face. Just finished getting pricing on condensate and crude sales for December and was very sad looking at the prices versus three months ago.

Our executive team has been fairly quiet since before the holidays. I anticipate some sort of memo/announcement regarding prices if the downward spiral hits $40 bbl this week.

We already have a partial hiring freeze, and annual raises or lack their of have been postponed till Feb 1. Kind of wondering if bonuses will even be given out this year considering how down everyone looked today.

Hardest working, and biggest spending. Also, O&G isn't out of a job because of hard work, they are out of a job because of technological advancements that are changing the industry dynamic. They once said whale oil would power the world forever.

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Hardest working, and biggest spending. Also, O&G isn't out of a job because of hard work, they are out of a job because of technological advancements that are changing the industry dynamic. They once said whale oil would power the world forever.

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Do tell. So this is it. Time to start a windmill business that makes plastic. Smart cars have saved the world. The world energy problems have all been solved?

Seems legit. I would really like to see the numbers on this.

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Hardest working, and biggest spending. Also, O&G isn't out of a job because of hard work, they are out of a job because of technological advancements that are changing the industry dynamic. They once said whale oil would power the world forever.

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Do tell. So this is it. Time to start a windmill business that makes plastic. Smart cars have saved the world. The world energy problems have all been solved?

Seems legit. I would really like to see the numbers on this.

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I think he was talking more along the lines of fracking/shale development enabling a huge surge of supply. Decreased per capita oil usage in the West doesn't help, but my understanding is that this is mostly about supply since demand is technically still increasing.

I've sunk my next decade financially in a highly devalued degree, and many others in this thread have much more at stake than myself. Gloating about "calling" a price plunge in this thread is pretty damned calloused.

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Houston is like New Orleans with Katrina 5 days out when the NOAA was predicting direct hit landfall, but everyone that should have known better waited until it was on top of them to evacuate.

I think the disconnect is that most people in the O&G sector thought and acted like things would never change, whereas most realized that was a statistical fallacy.

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The folks in NO had easy and safe options to get out and be OK. Very very few folks in the O&G industry can do a damn thing about this upcoming storm and have NO CHOICE but to hunker down and wait it out. I find your post to be rather foolish. Will a lot of young uns get a hell of a wake up ? You bet. Will a lot of marginal employees get the axe ? You bet.. BUT thousands of hard working good folks will have a very hard time over the next 12-24 months and there isn't a damn thing they can do about it.
I understand that for about 75% of the posters in this thread this is nothing but an investment event to make money over and cuss and discuss puts and putts and options and all that crap BUT for thousands of us it is about losing homes, jobs, relationships ,dreams and futures.
N.O. idiots got exactly what they deserved, the O&G folks fixin to get hammered have done a not damn thing but work hard and built this energy revolution that the rest of the country is benefiting from.

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Texas bank stocks are feeling the pain. Earnings reports will be something to keep an eye on for energy related weakness.

Well said 76.

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So which is it? Is the 300k just oil and gas jobs as you said it does it include the trickle down jobs as you agreed earlier?

http://www.bauer.uh.edu/centers/irf/houston-updates.php
These folks seem to think overall jobs will net increase for houston but recognizes the loss of 50-60k (don't remember the exact number) of oil and gas jobs.

I think the analysis shown above is more reasonable. Also talks about the consolidation of field offices will like move jobs to houston.

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What exactly did you call gadgets?

Job losses? Price of oil? Was it on another thread? Did you edit it?

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I've sunk my next decade financially in a highly devalued degree.

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If I remember correctly your going back to school for a petroleum eng degree?

The major oil companies are still going to hire graduates. Get great grades and do some internships, have leadership positions and you will still have opportunities. The same conditions for those jobs haven't changed.

Those that believed in the "statistical fallacy" haven't been around very long. "Calling" something like this is not that difficult.

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The Original AG 76 is spot on in his original post.

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Thanks. I wish to hell that I was 100% wrong back in Sept but It doesn't appear that way.
I'm still hoping that it doesn't develop into an 80's bust but a LOT more prognosticators are beginning to line up on the 80's scenario.

Maybe most folks who general support the O&G business. But I'm talking about the ones who are thrilled that companies are losing money/anti hydrocarbons in general, which is a large part of the country.

Hell I'm in O&G and I'm not a fan of the speculative nature.

Seems a little to insane - $20.00 oil?



My thoughts are this is going to be a one - three year deep decline in oil, before rebounding to a more reasonable range (albeit not $70+ oil) enough that everyone in the US is going to realize the growth in GDP has been heavily due to oil and gas growth, the economy is going to start hurting as well.

I am still long deflation, and believe for most developed countries it is here to stay, older and older baby boomers are going to start cashing in on lifestyles and retiring.

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I understand that for about 75% of the posters in this thread this is nothing but an investment event to make money over and cuss and discuss puts and putts and options and all that crap BUT for thousands of us it is about losing homes, jobs, relationships ,dreams and futures.

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Do something about it. You predicted oil prices would fall big back in the summer and could have made a ton of money if been shorting since.

Do something about it?

Sweet, bro!

I have been remodeling a house over the last 24 months in what is soon to be an overpriced section of Houston for a job dependent in large part on the O&G industry. I am over-exposed to this downturn like many of you. I have been shorting O&G for the last two months as a hedge...I am not gleeful for the downturn, but don't hate investors for trying to make the most out of the forecast. Just don't be gleeful about it.

I'm not thrilled about the job cuts. I'm not thrilled people are losing their jobs, and I hope it isn't as bad as predicted.

BUT, it is needed. There was a great quote from Krauthammer last week about the situation. He said, "whenever you take away someone's money supply they are going to get angry, and look to point the finger at anyone but themself."

How do you quantify "hard working "? Sounds like beltway sounds good talk.

Also, like DS said, how can you call someone out for saying they "called" the drop in oil when the entire premise of the thread was predicting the impact of the drop of oil on Houston's economy.

Reading through this it's clear who are the people that work in O&G, and those that don't.

Might as well relabel it "Pity us: Houston, we have a problem" and limit it to the engineers to commiserate about market conditions.

What do y'all manufacture?

We manufacture US made OEM replacement mud-pump spares and we've seen a huge flurry of business lately, we're getting large down payments but I'm confused as to why we haven't seen a slump.

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I've sunk my next decade financially in a highly devalued degree, and many others in this thread have much more at stake than myself. Gloating about "calling" a price plunge in this thread is pretty damned calloused.

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I haven't heard of any hiring freezes at the majors (yet) so if/when your degree is done let me know and I can get you in contact w/ recruiters if you'd like

This price situation really bums me out. My grandfather was a wildcatter for over 50 years and he made millions, lost millions, made millions, lost millions and so on and so forth for over 5 decades before comfortably bowing out in the early 80's as he sold off all his production and leases about a year before the crash, which he predicted was coming due to the Saudi's.

I always thought I would work in the oil patch, but coming of age in the late 80's and early 90's there were few things bleaker than working in O&G at that time. During my time at A&M I remember several guys switching out of PE and Geology to other things. Having moved to South Texas a few years before the crash it was hard to fathom how bad things got hit. Especially deep South Texas with the Mexican Peso crashes, the 83'/84' and then 89' freezes. It was gaunt.

Thus early in my career I opted to get into something more stable and consistent; apparel and textiles (mistake). I lived the demise of the US industry in which over 600K people lost jobs due to production from overseas and then I have seen at least 3 other shifts all with negative consequences. As recently as the late 1960's there were more people in Textiles in the US than in the auto industry and the sad thing is that nobody really gave a damm because they could buy t-shirt cheaper at Walmart. Thus I don't think the general American public will have one iota of true concern for all the good folks that are hammered by the oil crash. Sad, and I don't agree with it, but true.

I don't think we will see Texas be hit as hard as it was in the 80's, but I do think you will see "revaluation" or "correction" in the Houston area and I also think many banks that are heavy duty into O&G are going to take a beating. I hope folks were more frugal this time around. Those damm bumper stickers from the 80's that said something to the tune of "Lord, let the oil patch come back and this time I won't piss away everything" are so damm true.

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I haven't heard of any hiring freezes at the majors (yet) so if/when your degree is done let me know and I can get you in contact w/ recruiters if you'd like

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There is at least one major that is on an informal hiring freeze if you'd like to call it that. They'll still hire petro-techs as they'll always be needed, but certainly not in the same volume. Non-critical production roles won't see much of any activity for quite some time I'd imagine. All contract recruiters are now gone, and rumor among former colleagues is that some full time personnel are next.

I've heard of other full-time personnel (small number of folks) being laid off right before the holidays, the "fat trimming" has begun. Just a wait and see from all things I've heard.

Excellent post. Regarding textiles and the national perceptions... One of the things I'll never forget/forgive was the massive hue and cry over damn yankee auto workers and other yankee trash losing their jobs prior to our crash. Every evening on the 3 news casts there was some sob story over some yankee town or Yankee family hurt by those evil jap cars. Yes it was tragic when some union slug lost his $25/hr job glueing in rearview mirrors with 17 weeks vacation etc.... Of course the Congress rushed thru all sorts of save the Yankee legislation .... Fast forward when 250,000 Texans lost their jobs...... Chirp chirp chirp.... No one gave a damn cause it was those evil oil folks and we love our $.75 gal gas.

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I think real estate ITL will get pinched as well

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not the way i wanted to enter the buyers market.

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What do y'all manufacture?

We manufacture US made OEM replacement mud-pump spares and we've seen a huge flurry of business lately, we're getting large down payments but I'm confused as to why we haven't seen a slump.

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in my experience, the downturn usually starts showing up about 6-9 months after the fall in oil prices......at least that is the measure in the tubular industry.