Business slowing for many companies as the oil and gas industry reacts to drop in crude prices.
I’ve said it before and I’m saying it again. The oil and gas industry is a roller coaster ride: One day it can be flourishing and the next it could be forcing companies out of business. It’s amazing what this industry can do for whole areas too.
Take for example a report released by the Energy Information Administration in late April listing the top U.S. oilfields. The rankings were initially released in 2009 and the Eagle Ford Shale play, discovered in 2008, wasn’t even listed yet.
This time, however, the southern Texas play had the top U.S. oilfield based on proved reserves in the EIA’s report. The EIA defines “proved reserves” as estimated quantities of oil and natural gas that can be recoverable with reasonable certainty under existing economic and operating conditions.
The Eagle Ford’s Eagleville field took the top spot, while Prudhoe Bay’s oilfield in northern Alaska dropped to the third largest. In the 2009 report, the Prudhoe Bay field was the largest. The No. 2 spot on this year’s list was the Spraberry Trend field in the Permian Basin.
Colorado’s Wattenberg field was fourth, while Eagle Ford’s Briscoe Ranch was fifth.
In natural gas, the top U.S. field is the Marcellus Shale, which includes areas of West Virginia and Pennsylvania. Marcellus stole the top spot from Texas’ Barnett Shale area.
GROWTH OF THE MARKET
Since the early 2000s, the industry has grown immensely. Just look at oilfield services company Southern Spur Enterprises, profiled this month. The Saskatchewan-based company started operations in 2004 with just one truck and today has over 20 vehicles in its fleet.
The company, which cleans tanks and production facilities in the oilsands region of Canada, operates within a 100-mile radius of Lashburn and only serves the oil and gas industry with its fleet of vacuum trucks and trailers.
Jim Donald, Southern Spur’s field supervisor, spent a week in February at the Water & Wastewater Equipment, Treatment & Transport Show in Indianapolis trying to gather ideas for diversifying the company.
While Southern Spur has grown considerably over the last 11 years, the company needs to think about diversification if it wants to continue growing. That’s thanks to the decline in crude oil prices, which has affected the company.
The Bakken Shale play is one of the areas that’s been hit hardest by the price drop. In this month’s Bakken Extra feature, we tell you about a company and some workers who have been affected firsthand by the volatile crude oil prices.
For many contractors, it’s a time to tighten the shoestrings a bit and find out where they can save money.
HOW ABOUT YOU
How is your company dealing with the crude oil price slump, and what advice would you give to other contractors? We’d like to hear from you. Email me at firstname.lastname@example.org or call 800/257-7222 to let me know.
Enjoy this month’s issue of Gas, Oil & Mining Contractor!