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Old 02-03-2009, 07:56 PM
 
Location: San Juan County, New Mexico
261 posts, read 867,065 times
Reputation: 316

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Well, the local paper has reported that one of the oilfield service companies has just announced a layoff and the closing of their division here. This announcement is sort of a harbinger of things to come. In the last month or so I've been hearing more and more about the slowdown in the patch. Several servicing companies have already laid employees off although it wasn't reported in the paper. When you drive around the county, you can see that there are way too many rigs stacked out and way too many pieces of equipment parked.

I've been through no less than three of these busts in 50 years here, and this one looks like it's already upon us. There's no way to tell how deep or how long it will be, but for anyone who is thinking of coming here without a secure job, be forewarned. It's going to get tough here. Best of luck to you.
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Old 02-03-2009, 08:23 PM
 
Location: Where I live.
9,191 posts, read 20,041,495 times
Reputation: 4889
Quote:
Originally Posted by sjbasin View Post
Well, the local paper has reported that one of the oilfield service companies has just announced a layoff and the closing of their division here. This announcement is sort of a harbinger of things to come. In the last month or so I've been hearing more and more about the slowdown in the patch. Several servicing companies have already laid employees off although it wasn't reported in the paper. When you drive around the county, you can see that there are way too many rigs stacked out and way too many pieces of equipment parked.

I've been through no less than three of these busts in 50 years here, and this one looks like it's already upon us. There's no way to tell how deep or how long it will be, but for anyone who is thinking of coming here without a secure job, be forewarned. It's going to get tough here. Best of luck to you.
Yes. Very familiar. Having also grown up with the oil industry in Texas--and also seen 50+ years of boom-bust, it's not surprising.

People were complaining about high natural gas/oil/gasoline prices, and were saying that they'd never come back down again. I told them to give it some time, and it will bust again. It always does.

It will also come back. Your guess is as good as mine on that one.
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Old 02-03-2009, 08:33 PM
Status: "'wokeness' is a cancer" (set 29 days ago)
 
33,586 posts, read 22,459,894 times
Reputation: 18037
i saw this story on the DT as well. weatherford, wasn't it?
OPEC has been slashing production like mad to get the price of oil back up, and it's bound to have an effect before too much longer. still, we're probably not going to see $4/gal. gas again for some time, as long as the world economy stays on a downturn.
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Old 02-03-2009, 09:54 PM
 
2,857 posts, read 6,217,685 times
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The oil industry operates on a big loop. Oil prices fall and the industry stops drilling, resulting in a reduction of supply which makes prices rise, which makes the industry begin drilling again, which increases supply, which eventually leads to falling prices, which leads to the industry cutting back again, which leads to a fall in supply, which brings prices back up, which encourages more drilling, which increases supply, which results in oversupply and falling prices, which leads to . . . you get the picture. The industry's slow reaction/overreaction to these events (recognizing oversupply and excess demand) is what causes these wild fluctuations in price, and boom and bust in the industry. Panic on the part of purchasers also contributes to thie wild price changes. It's a vicious circle. Successful companies position themselves to take advantage of the cyclical changes.
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Old 02-03-2009, 10:23 PM
 
Location: Where I live.
9,191 posts, read 20,041,495 times
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Quote:
Originally Posted by domino View Post
The oil industry operates on a big loop. Oil prices fall and the industry stops drilling, resulting in a reduction of supply which makes prices rise, which makes the industry begin drilling again, which increases supply, which eventually leads to falling prices, which leads to the industry cutting back again, which leads to a fall in supply, which brings prices back up, which encourages more drilling, which increases supply, which results in oversupply and falling prices, which leads to . . . you get the picture. The industry's slow reaction/overreaction to these events (recognizing oversupply and excess demand) is what causes these wild fluctuations in price, and boom and bust in the industry. Panic on the part of purchasers also contributes to thie wild price changes. It's a vicious circle. Successful companies position themselves to take advantage of the cyclical changes.
The wise ones also learn to sock away funds during the good times...
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Old 02-03-2009, 11:13 PM
 
Location: SoCal
14,531 posts, read 17,014,084 times
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Originally Posted by sjbasin View Post
... for anyone who is thinking of coming here without a secure job, be forewarned. It's going to get tough here...
That applies to every place in the entire country.
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Old 02-04-2009, 08:45 AM
 
Location: Sunny Arizona
622 posts, read 1,588,556 times
Reputation: 526
Weatherford, to their credit, is only shutting down one of 6 departments they have working in Farmington, and is offering positions to those who can relocate elsewhere. So, it's not as bad as it could be, which is nice to hear.

I also think companies are using this time to clean house while public sentiment is expecting it..not necessarily in this specific case, but just in general. All anyone has to do is cry "economy" and nobody bats and eye at layoffs, while in other times they'd be screaming from the rafters and demanding the inquisition.
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Old 02-04-2009, 08:59 AM
 
17,063 posts, read 22,387,028 times
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Same thing going on where I am at in Grand Junction. There is a big 2 page story in yesterdays Denver Post about it. The word I heard a couple months ago was all the companies were cutting back 25%, but am afraid it will be more than that. Weatherford leads the pack on this.
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Old 02-04-2009, 11:10 AM
 
Location: Bella Vista, Ark
77,813 posts, read 91,547,540 times
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Quote:
Originally Posted by Lovehound View Post
That applies to every place in the entire country.
I agree, no one should be considering re-locating without a secure job, money to live on and complete knowledge as to what to expect. This has nothing to do with NM, it is the entire country. In fact NM hasn't been hit nearly as hard as many states, at least not yet..

Nita
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