Hey Oilfield Guys!!

[Skinny]

Everything will be just fine.

[denowt]

Not everyone in the field blew their money.

I never once said that everyone did.
I know several people in O/G that have zero or very little debt.
Their house, truck, boat, etc are all paid for.
They will have to tighten their belt a little, but they'll be ok.

I also know several that never have more than $100 in the bank. But they have a new truck, new boat, and new house.
They're most likely going to lose everything because they were blowing their money as fast as they could and never saved a dime for the inevitable O/G slowdown.
It happened to these types of people several years ago when there was a slowdown.
It also happened several years before that during the previous slowdown, and so on and so on.

[tarjake]

i remember a bumper sticker when i was a kid in the 80s here in midland....
Please God, just ONE MORE BOOM! i promise not to p**s this one away!

[Chad_E]

42 gallons a barrel (not all 42 gallons is converted to gas), add in transportation, marketing/distribution, then stack on taxes... At $80 a barrel, I'd guess it would be in the $2.75 range, but how much are taxes going up?

With congress talking about increasing the tax on gas, no doubt to the the current low prices, it seems like some folks forget about who actually profits more for every gallon of gas sold in the US.

the other interesting point is the ban on the US being able to export oil may be lifted.

Gas tax is a different subject, but I am whole heartedly for it. Gas tax hasn't really changed since the 1993. Inflation has in turn reduced how far said gas tax dollar can go toward infrastructure. The US infrastructure is steadily declining and if congress doesn't make a change to being funding infrastructure again, the situation will escalate quickly. If you don't like toll roads, you might want to be for additional funding into the transportation funds. Not to mention all the pipe in the ground that is way past its design life.

http://usgovinfo.about.com/od/incometaxandtheirs/a/Federal-Gas-Tax-Rates.htm

[RR 314]

I remember a bumper sticker when i was a kid in the 80s here in midland....
Please God, just ONE MORE BOOM! i promise not to p**s this one away!


As mentioned above, and herein, I believe this was the genesis of the initial post! Squirrel away some money in the good times and live well within your means. Applies to all of us--not just OFT. . I am certified OFT as I worked after work and weekends for free to help a buddy keep his struggling servicing company going in Midland in 1998-9. Come to think of it, dude owes me some back pay--with interest.

Boys, look at the initial post. A gentleman who works in the oilfield simply stated, "Please, please, please save some money." Historically, from hands to mineral interest owners, those making a lot of money during boom times have been less than frugal/responsible with their money. This cannot be intelligently refuted. This does not mean many were responsible and anticipated the inevitable bust. I have many friends that have done both. Many here, some posting on this thread, don't remember the bumper stickers that were prevalent in west Texas not all that long ago--"Dear Lord, please give me just one more boom. I promise not to pi$$ it away this time."

I know doctors, lawyers, professional athletes and Indian chiefs that are not good with money. Certainly the flaw is not limited to those in the oilfield. Spend your money how you desire, save what you want, but know nothing is guaranteed no matter what your profession.

[coldgas]

Gas tax is a different subject, but I am whole heartedly for it. Gas tax hasn't really changed since the 1993. Inflation has in turn reduced how far said gas tax dollar can go toward infrastructure. The US infrastructure is steadily declining and if congress doesn't make a change to being funding infrastructure again, the situation will escalate quickly. If you don't like toll roads, you might want to be for additional funding into the transportation funds. Not to mention all the pipe in the ground that is way past its design life.

http://usgovinfo.about.com/od/income...-Tax-Rates.htm

I have an idea. How about istead of proposing another tax we quit wasting money and the money saved can go towards infastructure. We can start by not giving money to countries who want to kill us.

[oktx]

I never once said that everyone did.
I know several people in O/G that have zero or very little debt.
Their house, truck, boat, etc are all paid for.
They will have to tighten their belt a little, but they'll be ok.

I also know several that never have more than $100 in the bank. But they have a new truck, new boat, and new house.
They're most likely going to lose everything because they were blowing their money as fast as they could and never saved a dime for the inevitable O/G slowdown.
It happened to these types of people several years ago when there was a slowdown.
It also happened several years before that during the previous slowdown, and so on and so on.

Maybe the term flooded wasn't the best choice of words then.

[firemedic2105]

I have an idea. How about istead of proposing another tax we quit wasting money and the money saved can go towards infastructure. We can start by not giving money to countries who want to kill us.

DING DING DING we have a winner! The .gov wastes way more money than they lose to inflation on the gas tax.

[RiverRat1]

Gas is still 1.97 here in Paris.

I still think they better figure out how to compete and profit at 45-60 dollar oil though.

And I 100% agree. But it's hard when prices tank from 90 to 48 in just a few weeks. Just like it sucks when they rise that fast to the upside for consumers.

If the price stayed between 55-65 for a year or two I'm sure it would get figured out. But it will probably go lower or rise back to 80 or so. Lower and they won't even try, over 80 and they get sloppy because they're in a rush to get the oil out why the price is high.

[denowt]

Maybe the term flooded wasn't the best choice of words then.

The used truck car lots will be flooded with late model trucks if this turn down continues.
The sheer number of O/G employees is huge right now.
Even if only 1/4 of them squandered their money on trucks and toys they really couldn't afford, that will be a huge number of repo'd trucks.
Back in 2008 or so, you could buy a used F250/350 diesel truck for below market value because the market was flooded with diesel trucks at the time. A lot of those trucks were previously owned by a former O/G employee.

It's a simple numbers game.
Go and sit and any major highway intersection in or near to the hot production zones and count how many late model diesel trucks pass by.
I would bet at least 75%, probably 90%, of them were purchased with oil money in one form or another, either by actual O/G employees or by landowners receiving mailbox money from a well on their land.

That was my simple point.
It was not meant as an insult to O/G employees.
It will simply be a repeat of history.
It has happened before, and I guarantee it will happen again in the future.
It's just the nature of the industry to have ups and downs.
It's just human nature for SOME people to live beyond their paycheck, no matter what industry they work in.

[bermise]

The used truck car lots will be flooded with late model trucks if this turn down continues.
The sheer number of O/G employees is huge right now.
Even if only 1/4 of them squandered their money on trucks and toys they really couldn't afford, that will be a huge number of repo'd trucks.
Back in 2008 or so, you could buy a used F250/350 diesel truck for below market value because the market was flooded with diesel trucks at the time. A lot of those trucks were previously owned by a former O/G employee.

It's a simple numbers game.
Go and sit and any major highway intersection in or near to the hot production zones and count how many late model diesel trucks pass by.
I would bet at least 75%, probably 90%, of them were purchased with oil money in one form or another, either by actual O/G employees or by landowners receiving mailbox money from a well on their land.

That was my simple point.
It was not meant as an insult to O/G employees.
It will simply be a repeat of history.
It has happened before, and I guarantee it will happen again in the future.
It's just the nature of the industry to have ups and downs.
It's just human nature for SOME people to live beyond their paycheck, no matter what industry they work in.

So true. I've been looking for some nice toys on Craigslist. I'm hoping a new top drive pops up for a bargain soon

[Chad_E]

I have an idea. How about istead of proposing another tax we quit wasting money and the money saved can go towards infastructure. We can start by not giving money to countries who want to kill us.

DING DING DING we have a winner! The .gov wastes way more money than they lose to inflation on the gas tax.

I completely agree with both of you on the fact that the US government is extremely guilty of wasting money! What I am also against is inaction. Infrastructure is what has helped our nation thrive. That same infrastructure is deteriorating at an alarming rate because so much of it is well beyond its design life. Something must be done. The gas tax was initially set aside purely for infrastructure improvements. As with all things our government does that tax has been dipped into for ear marks to the point where only 60% of the tax actually goes to infrastructure (according to the Transportation Secretary in 2007). I wouldn't be surprised if it is worse than that now.

[RR 314]

Flooded is indeed the proper term. I saw the same in Midland and cash was king. Banks will be taking back a lot of vehicles etc. if there is not a major rebound relatively quickly. There will be a substantial real estate price crash in the Permian Basin. Boats, UTVs, trucks, guns etc. will enter the market in massive quantities.

The used truck car lots will be flooded with late model trucks if this turn down continues.
The sheer number of O/G employees is huge right now.
Even if only 1/4 of them squandered their money on trucks and toys they really couldn't afford, that will be a huge number of repo'd trucks.
Back in 2008 or so, you could buy a used F250/350 diesel truck for below market value because the market was flooded with diesel trucks at the time. A lot of those trucks were previously owned by a former O/G employee.

It's a simple numbers game.
Go and sit and any major highway intersection in or near to the hot production zones and count how many late model diesel trucks pass by.
I would bet at least 75%, probably 90%, of them were purchased with oil money in one form or another, either by actual O/G employees or by landowners receiving mailbox money from a well on their land.

That was my simple point.
It was not meant as an insult to O/G employees.
It will simply be a repeat of history.
It has happened before, and I guarantee it will happen again in the future.
It's just the nature of the industry to have ups and downs.
It's just human nature for SOME people to live beyond their paycheck, no matter what industry they work in.

[texansfan]

And I 100% agree. But it's hard when prices tank from 90 to 48 in just a few weeks. Just like it sucks when they rise that fast to the upside for consumers.

If the price stayed between 55-65 for a year or two I'm sure it would get figured out. But it will probably go lower or rise back to 80 or so. Lower and they won't even try, over 80 and they get sloppy because they're in a rush to get the oil out why the price is high.

I would think a multibillion dollar company would have studied how to remain profitable at $30 oil all the way up to $130 oil in $5 increments.
Do they not have contingency plans (besides fire everyone as soon as oil drops below $50 and hire anything with a pulse when oil goes above $90)?

Has anyone done any studies to see what will happen to our economy if oil hovered between $35 and $45 for a continuous 24 or 36 months?

[firemedic2105]

I completely agree with both of you on the fact that the US government is extremely guilty of wasting money! What I am also against is inaction. Infrastructure is what has helped our nation thrive. That same infrastructure is deteriorating at an alarming rate because so much of it is well beyond its design life. Something must be done. The gas tax was initially set aside purely for infrastructure improvements. As with all things our government does that tax has been dipped into for ear marks to the point where only 60% of the tax actually goes to infrastructure (according to the Transportation Secretary in 2007). I wouldn't be surprised if it is worse than that now.

That still doesn't justify raising the gas tax, especially since it most likely go back down when oil/gas goes back up. It points to the fact that all the BS programs that pull money from everywhere else because they can't be supported otherwise need to go away. The fedgov needs to get out of lots of "businesses" that it's in anyway, keep the taxes and spending decisions at the state level. But that's another conversation for another day in a another thread.