These unsettled peaks and valleys are nothing new to the oil and gas industry. Many businesses had to tighten their belts in 2008, when the price per barrel took a dive.
But the latest downturn is making it difficult for smaller, local oil companies to stay afloat.
“It’s a fun business to be in,” said Texas Alliance president, Alex Mills. “It’s exciting but it does have it’s volatility.”
When the oil business is good, it’s booming.
And when it’s not, things can get a little tough.
“We’ve had to layoff about 110 people in that subsidiary just because we can’t find any work,” said Eagle Oil and Gas vice president, Warren Ayers. “We usually drill 20 to 30 wells a year, sometimes a little more. And we’re down, in 2015, we probably participated in seven or eight wells.”
Ayers says they’ve budgeted for six wells in the year ahead.
Although this isn’t the first valley Ayers has had to endure, he says it is the most abrupt.
“To me, it seems like the most sudden drop in prices that we’ve ever had,” Ayers said. “Most of the others have taken several years. When the Saudi’s decided to flood the market they just opened the taps and things went down very rapidly.”
Ayers says since a recovery doesn’t look likely anytime soon, it’s all about watching what the company spends to make money.
“What we have tried to do is to monitor our cost because we can’t control the revenue side,” Ayers said. “That’s the only thing that we can really do and that’s through people, the number of wells we drill.”
“There comes a time when the expenses just exceed the revenues to a certain degree that you have no other options, other than closing the doors,” Mills explains. “And that’s the last of the last option that you want.”
Mills said the industry lost more than 60,000 jobs in the last year
That number could continue to climb before a business that has extreme highs and lows starts to see an upswing.