When the price of oil goes down too much, oil producers can't afford the expense of drilling. Rigs are parked. Workers are laid off. That impacts the entire listening region.
Business Insider reports Helmerich & Payne recently announced it would idle 50 more drilling rigs in February, after having already idled 11 rigs. Each rig accounts for about 100 jobs. This will cut its shale-drilling activities by 20 percent.
The other two large drillers, Nabors Industries and Patterson-UTI Energy, are on a similar program. All three combined are “likely to cut approximately 15,000 jobs out of the 50,000 people they currently employ,” says Oilpro Managing Director Joseph Triepke.
Small to midsized driller are making even deeper cuts to slow the cash outflow.
The hardest hits are in Texas, follow by North Dakota.
Christopher Helman is a staff reporter for Forbes. He says the least known impact of the falling prices will be on the farmers and ranchers who lease their land for drilling. They won’t feel the crunch until March because royalty checks have a two month lag.
Helman predicts crude oil prices aren’t at the bottom.
