The oil and gas industry is experiencing signs of a slowdown with reduced drilling rigs, E&P financial distress, reduced headcount and a pull back from investors. Industry experts agree that this is part of a normal cycle in the course of oil and gas business. However, the overall theme is that business activity in the industry will slow down in Q4 and as we head into 2020.
Let’s unpack some of this gloom. From a recent Baker Hughes rig report, the U.S. rig count fell for 7 weeks in a row from 898 down to 855 as of this writing. A handful of exploration and production companies filed for chapter 11 bankruptcies during Q3. Some notable independent E&P companies filing bankruptcy include Sanchez, Halcon and Alta Mesa. It has been reported that a few could lead to liquidation and not recapitalization with creditors. The U.S. unemployment rate fell to 3.5 percent in September and employers continued to add jobs. Although, in the oil and gas sector, the industry shed about 5,000 jobs in Texas alone over the past three months. Finally, numerous reports indicate that investors are nervous about investing more into shale properties and would rather see operators control capital expenditures, produce more product and increase cash flow.
There are positive signs out there. Overall the Permian Basin is doing well, in fact New Mexico added five drilling rigs in October. Much needed pipelines to drive product to market have come online and several are due to start next year. There are also several LNG terminals in development and refinery expansions in the Gulf Coast region.
The CEO of U.S. Energy Media, Emmanuel Sullivan is a technical writer who has built up his profile in the oil and gas industry. He lives and works in Houston, where he publishes Oilman and Oilwoman on a bimonthly basis, and Energies quarterly, distributing the magazine to energy thought leaders and professionals throughout the United States and around the world. At a time when technology is rapidly changing, he provides an invaluable service to oil & gas, and renewable energy executives, engineers, and managers, offering them both broad and specific looks at the topics that affect their livelihoods. Sullivan earned his BA in Communications at Thomas Edison State University and his MA in Professional Writing at Chatham University.
Oil and gas operations are commonly found in remote locations far from company headquarters. Now, it's possible to monitor pump operations, collate and analyze seismic data, and track employees around the world from almost anywhere. Whether employees are in the office or in the field, the internet and related applications enable a greater multidirectional flow of information – and control – than ever before.