Saudi Arabia to lower oil prices, the houston boom is over

You must spread some Reputation around before giving it to Major again.

 

O&G workers hate him.

 

While I don't deny the effect cheaper gas prices has on the average American I'm a little curious how the reduced O&G spending will effect other companies though. I work in IT for a O&G company and I have been told to put all my projects on hold and look at open source tools for the time being. This personally has halted spending of around 300k on outside hardware & software, and over a few million in slashed budget for the small team I'm part of. Compound this reduced spending in the whole company and in this sector all together I wonder what the trickle down effect it has on outside companies.

It could balance though with airlines and companies like FedEx receiving higher profit margins. Not sure, just curious.

 

Tons of service companies and boutique shops will take a hit or go out of business. Probably mostly local though. A lot of IT, insurance, marketing and general service companies have an O&G heavy client portfolio.

 

Oh well. Just got some news that there will be no pay rise this year despite us doing well last year. Glad the job is still here though.

 

Do you work for BP?

 

My promotion has been pushed back, but also glad the job is still there. We are letting go our contract workers and then I assume the 2nd round will hit full time employees.

I'm not mad at it...just part of the cycle and something you take when you get into the field.

 

Hate is a strong word. I can't speak for the guys out on the field but most of us have competitive degrees from good universities that translate into ANY industry. I'm prepared for a worst case type scenario. I should be fine but I feel for the ones that may have their lives turned upside down.

It's pretty obvious that this isn't about saving 25 bucks a week for you. I didn't realize that so many people (not here strictly) genuinely don't like the industry or the fact that people may be eating a little better than them. O&G = big bad wolf I suppose.

 

Rumor has it that I'm bounced in March with 50% confidence.

 

good luck.

 

Same 'cept 99% confidence.

 

Sorry to hear that man. I wouldn't be surprised if the company put out those rumors 3-4 months ahead of time so people will leave of their own accord. Then they don't even have to pay severance.

 

Cheap Oil Burns $390 Billion Hole in Investors' Pockets
http://www.bloomberg.com/news/artic...ge-puts-390-billion-hole-in-investors-pockets

(Bloomberg) -- Investors have a message for suffering U.S. oil drillers: We feel your pain.
They’ve pumped more than $1.4 trillion into the oil and gas industry the past five years as oil prices averaged more than $91 a barrel. The cash infusion helped push U.S. crude production to the highest in more than 30 years, according to data compiled by Bloomberg.
Now that oil prices have fallen below $45, any euphoria over cheaper energy will be tempered by losses that are starting to show up in investment funds, retirement accounts and bank balance sheets. The bear market has wiped out a total of $393 billion since June -- $353 billion from the shares of 76 companies in the Bloomberg Intelligence North America Exploration & Production index, and almost $40 billion from high-yield energy bonds, issued by many shale drillers, according to a Bloomberg index.
“The only thing people are noticing now is that gas prices are dropping,” said Sean Wheeler, the Houston-based co-chairman of the oil and gas industry team for law firm Latham & Watkins LLP. “People haven’t noticed yet that it’s also hitting their portfolios.”
The money flowing into oil and gas companies around the world in the last five years came from a variety of sources. The industry completed $286 billion in joint ventures, investments and spinoffs, raised $353 billion in initial public offerings and follow-on share sales, and borrowed $786 billion in bonds and loans.
50 Cents
The crash caught investors and lenders by surprise. Eight months ago, Houston-based oil producer Energy XXI Ltd. sold $650 million in bonds. Demand was so high that the company more than doubled the size of the offering, company records show. The debt is now trading for less than 50 cents on the dollar, and the stock has declined 88 percent.
Energy XXI, which has more than $3.8 billion in debt, is one of more than 80 oil and gas companies whose bonds have fallen to distressed levels, meaning their yields are more than 10 percentage points above Treasury debt, as investors bet the obligations won’t be repaid, according to data compiled by Bloomberg.
The stocks and bonds of Energy XXI and other struggling energy firms have been bought up by pension funds, insurance companies and savings plans that are the mainstays of Americans’ retirement accounts. Institutional investors had more than $963 billion tied up in energy stocks as of the end of September, according to Peter Laurelli, a New York-based vice president of research with eVestment, an analytics firm in Marietta, Georgia, that gathers data on about $22 trillion of institutional strategies.
Bank Lenders
Energy XXI’s second-largest reported shareholder is a group of funds managed by Vanguard Group Inc., the biggest U.S. mutual-fund firm, according to data compiled by Bloomberg. The top reported owner of the bonds Energy XXI issued in May is Franklin Resources Inc. in San Mateo, California, also known as Franklin Templeton Investments, which manages multiple funds that bought Energy XXI’s debt, according to data compiled by Bloomberg.
Energy XXI didn’t return calls and e-mails seeking comment. The company has “plenty of liquidity,” Greg Smith, a spokesman, said in a December interview.
A reckoning may also be in store for Energy XXI’s bank lenders. The company, which drills in the Gulf of Mexico, has tapped $974 million of a $1.5 billion credit line extended by a group of banks including Gulfport, Mississippi-based Hancock Holding Co.’s Whitney Bank; Amegy Bank of Texas, a subsidiary of Salt Lake City-based Zions Bancorporation; and Comerica Inc. in Dallas, according to data compiled by Bloomberg. Energy XXI has also borrowed money from banks in the U.K., Australia, Canada, Spain and Japan.
Struggling Drillers
The three U.S. banks are also among the lenders to other struggling drillers. The loans are backed by oil reserves that are worth less at today’s prices than they were when banks last performed scheduled revaluations of the collateral.
Representatives of Amegy, Comerica and Hancock declined to comment on the performance of specific loans. Shares of Zions have declined 15 percent this month. Comerica is down 9.8 percent, and Hancock slid 15 percent.
“This is a big deal for banks in states like Texas where oil is one of the most prominent businesses,” said Brady Gailey, an Atlanta-based analyst at Stifel Financial Corp.’s KBW unit. “There are going to be loan losses and it’s going to hit multiple banks that have exposure to that credit. It will slow economic growth, it could ding real estate values, banks will lose money and their stock will get slammed.”
Regional Lender
One regional lender with energy exposure is Lafayette, Louisiana-based MidSouth Bancorp Inc., with 21 percent of its $1.25 billion of lending tied to oil and gas, according to regulatory filings.
Rusty Cloutier, MidSouth’s chief executive officer, said he’s not worried about the oil decline hurting his business because the bank’s portfolio consists of experienced oil and gas companies.
“There will be some players that get hurt, but the real players in the energy market aren’t going anywhere,” Cloutier said. “Companies who are leveraged very highly and got into the business not long ago, those are the ones that are going to get hurt.”
Hundreds of smaller banks in states such as Texas, Colorado, Oklahoma and North Dakota have also plunged into energy lending during the oil boom.
‘Very Concerned’
Gil Barker, the Office of the U.S. Comptroller of the Currency’s top overseer of community banks in states including Texas and Oklahoma, said he has confidence that the smaller lenders were doing what they should, though circumstances might change.
“We’re very concerned about the banks located in these oil-producing areas,” he said. “A prolonged time of low oil prices is really going to cause banks significant problems.”
More people will be affected than realize it, said Michael Shaoul, who helps oversee about $9 billion as CEO of Marketfield Asset Management LLC in New York. “So much of this has ended up in 401(k)s and in pension funds and in mutual funds, and that’s where the bulk of the pain is going to be felt.”

 

It's a joke. Relax. http://knowyourmeme.com/memes/trainers-hate-him

 

Nobody is relaxing in this thread. 75% of the people in here have their nuts on the dresser.

 

Or their t***.

 

Company announced that they're freezing pay this year. No raises. Better than losing my job!

 

Maybe once the global economy realizes it was only being propped up by speculative low interest lending we'll see the real demand for oil

Could we have just been in an asset bubble this whole time?

Euro zone crises, China slowdown.. lots of dominos falling

 

Lol I was amped up that day bc I had lunch with one of my boys who's a contractor. His last day was today. He has two sons and renewed his lease in December.