A part of my work for an electric co-op that has been constant over the last few years is the oil and gas patch.?ÿ Drillers will poke a hole in the ground in some of the most remote parts of the county.?ÿ The amount of money to be ultimately realized in a producing well is apparent when you see them building 4 miles of road just to get to the site.?ÿ And the subscriber's cost portion for delivering power service to such a remote site can be several hundreds of thousands of dollars.
I had a business huddle the other day with the R/W department to discuss handling the current social and economical changes that are upon us.?ÿ One of the matters we discussed was the possibility of the oil patch drying up for a while with the volatility of the market.
When these producers need grid to run their wells and such the co-op's engineering get the plans complete and then the producer's portion of the cost is calculated.?ÿ Like I said, sometimes this can be a staggering figure.?ÿ So nothing really happens on the ground until the production company ponies up their part of the cost to get the grid extended to their well site.?ÿ It's evident that this can take some time because it's not uncommon to get a work order that is 6 months or even a year old.?ÿ In the interim the wells are powered by APUs.?ÿ Over the last few weeks my number of oil and gas related work orders has actually increased by quite a bit.?ÿ The oil producers are writing big checks now to get all these wells permanent electric service.?ÿ And the dates on the work orders are predictably older.
Seeing how we all had just discussed this portion of our work would be "slowing down" I was confused with the increase.?ÿ I had to call head of the R/W department and ask if he thought it odd also.?ÿ He had noticed it too and talked to some of his contacts at the production companies.?ÿ Well, it seems as though they are all polishing up all their "loose ends" on their well sites so they can "put them on the market" to attempt to offset a sudden need for cash, no doubt due to crashing oil prices.
I hate see any industry suffer.?ÿ I guess my work picked up for a bit due to their misery.?ÿ Who'd a thunk??ÿ But I'll take it.?ÿ?ÿ
Oil this year as opposed 2019 is down almost 66%. 2019's average year price per bbl was $61.06 as opposed to $21.00 now. Most big Oil has plenty of cash so they are probably in speculation mode while prices are down. The demand for oil is not going to diminish anytime soon as the demand/production of electric vehicles is still in its infancy. ?????ÿ
We are busy too, but the circumstances are different than yours.?ÿ We have a major gas and a major electrical company as clients in a fairly major metropolitan area.?ÿ We signed a multi year - multi million $ survey only contract last fall with the elec. co.?ÿ Work has not stopped.?ÿ It might get spotty at time, but right now, it's 40 hrs./wk.?ÿ The work we are doing is considered for "Essential Infrastructure" therefore we are authorized to work on these projects.?ÿ But I think I'd much rather be holed up in some cabin out in the boonies miles away from anyone else with 4 months of supplies.
Besides my regular Survey activities, i have to carry an authorization letter with me.?ÿ ?ÿI have a wash station set up in the back of my truck.?ÿ I found 200 latex gloves that I'll have to use wisely and try to stretch out.?ÿ I'm wearing a homemade mask, which probably isn't that great, but it's better than nothing.?ÿ Yesterday, I sanitized my work truck the best I could.?ÿ Luckily I found a bottle of Clorox cleaner + bleach last week.?ÿ You can only do so much.
?ÿThe good part is that I'm in areas with very few people?ÿ out and about and I keep a 4 cat distance from them.
Florida goes on lockdown tonight at midnight. Surveyors in the State are considered part of ??essential activities? so we can still work. Good thing too, production housing is going gang busters. Are y??all the same with respect to work? ?ÿ ?????ÿ
@flga
Super busy right now, I'm considered essential so I'm not slowing down. The oil companies in Paden's OP have usually been very reactionary, they stop drilling when the price goes down, then when it ramps up they drill and as production finally gets going for the new wells the price drops and they miss out if they would have drilled when the price was low. Of course it's easy for me to observe and watch since I'm not investing.
Eventually work has to get done, and sooner better than later. I believe this is the only state where there has not been a death from the virus, yet we are shut down; at least somewhat.
When I start my rambling on about work it's misleading. I'm retired but still have an interest in my successor. My VP bought it from me however I still own the office building which she leases from me as well as a promissory note when paid over a period of 3 years will release stock I hold in escrow. She is going to hire more employees to keep up with her current load. And that makes me, or whoever inherits it, happy. ????
@flga
Somedays retirement sounds good, right now after getting back from vacation I can see, it's not for me yet. About time for my next get-away I'll probably think differently.
I will send good thoughts that the virus won't shut down your former VP and she can weather through and pay off the note, then you will be really free. ????
There is an angle to be considered. That is that the (whatever) industry needs to draw down its cash reserve so as to qualify for (more) government grants.?ÿ
