Hey Oilfield Guys!!

[LovinTxHuntin]

We have now been hit. My company cut a few guys Friday

[tex4k]

Our company has got several of those letters demanding we cut our prices. Anywhere from 10% up to 40%, or they just quit using us altogether. Had to let a couple of crews go, had to fire a couple of customers to, a company that works several pieces of equipment on a regular basis ask for a 10-15% cost reduction is something you can work with, a customer that only calls when their preferred company can't work them in, demands a 40% cut gets fired. It's cheaper to park equipment and wait. Hope we don't have wait to long or else I'm gonna be hiring out backhoes to put in food plots for some of you guys.

[Cold 1]

Day rates will go down a lot faster than they will come up when things turn around.

[100%TtId]

I just don't see how in the world anyone could or would cut rate by 40%!!

40% cut on prices is crazy. I've had some friends who got asked to cut prices by 20%, they are in the rental side. The company just asked for a flat 20% cut on everything that was on location, all the way down to portapotties.

As for my company, I'd cut prices some depending on which company asked, but not 40%

If you can cover your variable costs of production and still cover some portion of your fixed costs, then selling with a 40% discount is better than no sales at all.

[KR-oldmexico]

Rents a little but more of his work is service related.

Ten 4! I know the rental business can have margins that high but not normal in other sectors of the service business.

I feel for him and wish him the best luck in the world!

Our company has got several of those letters demanding we cut our prices. Anywhere from 10% up to 40%, or they just quit using us altogether. Had to let a couple of crews go, had to fire a couple of customers to, a company that works several pieces of equipment on a regular basis ask for a 10-15% cost reduction is something you can work with, a customer that only calls when their preferred company can't work them in, demands a 40% cut gets fired. It's cheaper to park equipment and wait. Hope we don't have wait to long or else I'm gonna be hiring out backhoes to put in food plots for some of you guys.

Luckily we haven't been hammered down too much yet, but I couldn't have out it any better myself when you say there are some customers you have To "FIRE"! We have laid a few off and are taking a really hard look at all the services we provide. If they aren't profitable by our standards we are shutting it down now! Sometimes a down turn gives you an opportunity to really look at you business and get better and more efficient pretty quickly!

[KR-oldmexico]

If you can cover your variable costs of production and still cover some portion of your fixed costs, then selling with a 40% discount is better than no sales at all.

A rate reduction is a very hard thing to get back! Especially when you cut every ounce of your margins out! This mindset will put you under more times than get you through the hard times! We don't work, provide jobs and provide services for the fun of it! We as companies have to make money too! There are many, many other ways to cut back, watch expenses, cut back hours and overtime to assist in a reduction of cost with the production companies! A 40% reduction in rates is ridiculous and bad for the service industry! No one can survive that nor should be asked to!!

[boh347]

I've cut my rate maybe 5% for one customer, I own a small trucking co. I've never gouged the customer when times were good and my rates were competitive wih most which was 125 an hr for heavy haul. I've heard of quite a few charging 150 and I thought that was a bit much.

[boh347]

boh347 what app are those screen shots from?

It's commodities.

[Bowtech Shooter]

We are sending a letter back to them today. We can possibly survive a 5% reduction in our prices for our goods but that is it. Hopefully it doesn't cost us our business. We have been busting our tail for them for the last 25 years and have a great relationship and have never raised prices when times were good. Hopefully that relationship will be enough. The costs they are asking for will not even cover our raw material costs. We would me machining the parts for free.

[Bowtech Shooter]

Just rubs you the wrong way sometimes. The guy that sent over this price reduction request sent me over pictures 6 months back of all of their high end office guys with 200+ deer that they went and shot as a company bonus. How much are they actually cutting cost on their end? They want all of their suppliers to do the dirty work for them.

[boh347]

We are sending a letter back to them today. We can possibly survive a 5% reduction in our prices for our goods but that is it. Hopefully it doesn't cost us our business. We have been busting our tail for them for the last 25 years and have a great relationship and have never raised prices when times were good. Hopefully that relationship will be enough. The costs they are asking for will not even cover our raw material costs. We would me machining the parts for free.

I hope it goes your way.

[Bowtech Shooter]

Hopefully,
they are still expediting orders this week and paying extra fees to get them out early, so doesn't make much sense.

[miket]

If yall have any leads please let me know:

My younger brother is looking. I dont know much about the actual jobs/titles, technical stuff on the rigs so bear with me ( Im on the manufacturing side ) The company he worked for allowed him to go to Mud School right when things went to crap. When he got out they had layed off and couldnt hire him back. He is a solids control/closed loop technician, service tech, skilled at centrifuge repair. He also has a drilling fluids engineering certificate. ( from the mud school I presume ). He has about 15yrs total in the oil field and has worked all over, offshore and land, Angola, ND, WYO, all over Texas, NM, OK etc.

Thanks

[RJK70]

Just rubs you the wrong way sometimes. The guy that sent over this price reduction request sent me over pictures 6 months back of all of their high end office guys with 200+ deer that they went and shot as a company bonus. How much are they actually cutting cost on their end? They want all of their suppliers to do the dirty work for them.

Push back on them and see if they are bluffing. We have received many of these letters and only reduced pricing where the customer had a real case for it.

[JTRichardson]

Push back on them and see if they are bluffing. We have received many of these letters and only reduced pricing where the customer had a real case for it.

every single customer we have has asked for 20-30% cost reduction across the board.

we let one customer have a 7% discount because of how much and often they order, every other customer got told respectfully, NO.

Only one customer has "quit using" us for commodities, but still buys motor parts from us