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Bloomberg: Ryan Byrd worked five years in oilfields from China to West Texas. But after the worst price rout in a generation left him jobless, he’s not ready to jump back into the mix.
Now working at a jail in Huntsville, Texas, the 33-year-old Byrd is happy to have a job that won’t disappear under him. His advice to others looking to the oil patch for fat checks: “Just be prepared to one day wake up, go to work and find that the job is not there.â€
Welcome to the next big Permian Basin bottleneck. A pipeline shortage slowed output this year, leading to a record 3,722 drilled-but-never-opened wells. But three major conduits set to open in 2019 are expected to solve that. The newest snag: Finding hundreds of workers over the next 18 months to open those wells, at a time when the firing of 440,000 workers between 2014 and 2016 remains a fresh and painful memory.
“It’s a huge concern for 2019,†said James Wicklund, a Credit Suisse Group AG analyst in Dallas. “It’s frankly today a bigger concern than oil prices, because oil prices are fine where they are. The availability of labor is not.â€
By the time the new pipelines are fully in service, potentially adding more than 2 million barrels a day of capacity, the number of unfracked wells could reach 7,000, according to the Tulsa, Oklahoma-based consultant Spears & Associates.
Now, there’s 174 fracking crews in the Permian, according to Primary Vision Inc., with roughly 20 to 30 workers each. Colin Davies, an analyst at Sanford C. Bernstein, expects that count to fall even lower. But once the pipes open, Davies believes as many as 100 more crews may quickly be needed.
Schlumberger Ltd., the world’s biggest oilfield services company, said on a conference call last month that it was trying to hold tightly to some of its experienced oilfield workers by looking at shifting them to other jobs until they’re needed back in the Permian field. And the industry is starting to recruit broadly, focusing on areas well outside the Permian so as not to cannibalize companies and communities close to the oilfields.
But it’s not an easy proposition. After being fired in the oil rout, many former oilfield workers, like Byrd, have settled into other jobs with much less volatility. Meanwhile, the U.S. jobless rate is at its lowest level in years.
“We’re already underwater in regards to finding qualified talent in that area,†said Amanda Dale, who is hoping to double the size of her Houston hiring firm, Energy Careers, to eight staffers in 2019, anticipating an oil industry buildup.
Rather than simply finding warm bodies to do the work, Dale said companies are pressing for experienced or qualified people. But she’s having a hard time filling those requests, she said, mainly because workers just got sick of the inconsistency of a boom-and-bust industry. “The work is there,†Dale said in an interview. “But they can’t find the people. I can only imagine what it’s about to be in a year to year-and-a-half.â€
The industry made a “giant mistake†in letting so many people go during the last downturn, said Chris Wright, chief executive officer at Liberty Oilfield Services Inc. “Our industry isn’t sexy today,†he said by telephone. “That piece of the story, the human piece over the next two years, is going be the biggest strain for the industry.â€
Crystal Webb, chief executive officer of the oilfield recruiting firm Intent Houston LLC, said she believes the industry needs to change the focus of its worker search moving forward. While the industry has depended primarily on high pay in the past, it needs to add better working conditions, more affordable housing and better benefits to compete for workers in the current job environment, she said.
Byrd, meanwhile, said he misses the money he made in the oil patch, noting he once felt free to pick up a $2,000 bar tab for friends. Now, his goal is to become a deputy as quickly as he can. “Do I miss it every other Friday? Absolutely,†he says of his oilfield payday. “There are kids out there getting paid $6,000 every 2 weeks.â€
But law enforcement offers him “the best job security,†he added, “because everybody is always breaking the law.â€
By David Wethe
Photo used under CC0 Creative Commons
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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