Posted on 12/30/2014 5:28:11 AM PST by thackney
Oil-field lodgings company Civeo Corp. said it has slashed its workforce in the United States by 45 percent and in Canada by 30 percent as it prepares for weaker occupancy rates at its oil-field camps next year.
The Houston-based company had more than 4,000 employees when it spun off from oil field services firm Oil States International in June.
The announcement is the latest oil-field services layoffs in reaction to falling oil prices and anticipated oil-company budget cuts. Houston-based Hercules Offshore said it would reduce its headcount by 324 and oil field giant Halliburton said it would cut 1,000 jobs across multiple regions in the Eastern Hemisphere.
Civeo also is cutting its spending plans for 2015 to $75 million to $85 million, down from its budget this year of $260 million to $280 million, as it anticipates lower demand for lodging services. It said it may be required to record impairment charges on its assets.
The company’s shares have fallen 28 percent in after-hours trading on Monday to $5.95 on the New York Stock Exchange.
As oil companies began cutting their capital spending budgets in the fourth quarter, “we began taking steps to reduce marketed room capacity, control costs and curtail discretionary capital expenditures,” Civeo president and CEO Bradley Dodson said in a written statement.
“These efforts reflect our proactive approach to improving the company’s structural efficiency, managing cash flow and maintaining our balance sheet,” Dodson said.
The company said it expects $160 million to $175 million in revenues in the first quarter of 2015. That would be down from sales of $252.8 million in the first quarter of this year.
Will the oil price slide affect your type of ops at some point?
My company serves the oil industry. I’m nervous. Been laid off twice already during the Commie regime.
I can empathize. As a consumer, it has been nice to pay so little at the pump. However, I am a bigger picture person and realize the impact this has globally, and definitely locally (Texas specifically). It will trickle to all areas of the economy, not just the oil industry. Hopefully, you are currently employed and will remain so. I’m on the job hunt myself
I’m on the production side so we’ll se little impact but the exploration, drilling side and those servicing it will take the initial hit. Those servicing existing wells will see less damage.
I sell lumber to companies that build these “man camp” buildings. 2014 was a record year for my largest customer in the Boise area where many of these modular buildings are constructed. He is nervous. That makes me nervous.
These modular manufactures can switch to make apartment buildings or other residential buildings. However, these man camp buildings have made up the bulk of their business in the last few years.
It’s tough when your mainstay income producing product goes into a slump,
but, that’s economics.
Building more of these would be a waste of resources (including manpower) that should be applied somewhere else as dictated by demand.
Makes sense. Had not thought about it that way. I’ve always been fearful to go into the oil & gas industry due to its boom/bust nature.
Been down this road before folks...not easy but the patch is tough.....oil dropped to below 10 bucks a barrel in the early 80s......got ugly for some and hurt speculators the most. Workers will move on and the most experienced will be kept on as needed.
Many of the sawmills and modular home builders got into making products for the oil & gas industry during the great recession. When housing starts dropped to 500m in 2009 there was not enough demand for regular dimension products for new home construction. Now, housing starts are back to just over 1 million. They will slowly climb back up to 1.3-1.4 million over the next few years. Sawmills and lumber brokers are pretty flexible.
There was a time when every Canadian sawmill sold X percent of their production to Japan. Now almost none. Now they all sell X percent to China and Vietnam and Taiwan. We sell a lot of low grade pine boards to Pakistan and India. Ten years ago we used to import a lot of Euro spruce dimension lumber. Now there is almost none. Everything changes. Change is the only constant.
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