Aside from the obvious white elephants in the room of crappy commodity prices and widespread industry layoffs, here’s what we’re hearing in the boardrooms and on the street…
| Date Published | May 21, 2015 |
| Company | Leadstone Group Inc., Oilfield PULSE |
| Article Author | Kevin Turko |
| Article Type | May 2015 Issue |
| Category | Articles |
| Tags | Cost Efficiency, End Of Well Reconciliations, Human Capital Costs, Kevin Turko, Oilfield HUB, Oilfield Operations Reporting and Costing Tools, Optimization Of Preferred Vendors, Service Reconciliations |
| HUB SEARCH | LeadstoneGroup |
Aside from the obvious white elephants in the room of crappy commodity prices and widespread industry layoffs, here’s what we’re hearing in the boardrooms and on the street…
There’s so much water cooler talk out there these days it’s hard to focus on any one specific issue that, in itself, is significantly impacting the wellbeing of the oil and gas industry in western Canada. Hard to believe, aside from the obvious white elephants in the room of crappy commodity prices and widespread industry layoffs, here’s what we’re hearing in the boardrooms and on the street in downtown Calgary.
The latest salvo was launched this past Tuesday with the election of our new NDP government and the decimation of the PC Party which has governed Alberta for over 40 years. If low commodity prices weren’t already enough for the patch to worry about, now we have the NDP election platform uncertainly connected to the potential of higher corporate taxes, royalty reviews, and pipeline support to add to this ugly list.
Investor confidence in the industry was already waning with many mezzanine and institutional investors camped out on the sidelines. They’re taking the wait and see approach into the 3rd and 4th quarters of this year to see if and when oil prices will hopefully recover to some degree, and to see what kind of opportunistic deals might come available as several exploration and production companies struggle with lower cash flows and meeting bank covenants. What’s in store for the rest of 2015, and the next four years, at least for now, a whole lot more uncertainly and additional risk in the minds of those who control the cash to fund future drilling activity. Let’s hope for the best!
Next, cut costs at all costs! I don’t think there is any company or any individual involved in the energy business that has not been affected by recent layoffs or reduced work hours over the past few months. But once a company has managed through this unfortunate cycle, what’s next? Finding cost efficiencies!
When drilling activity is running at full tilt in the patch, most companies usually don’t have the time, nor inclination, to step away to implement new business processes, 
revise procedures or adopt new systems. If it’s working don’t fix or change it! Today however, companies are looking for cost efficiencies wherever they can find them. Now’s the time to ferret out these cost efficiencies, seeing as there is spare time on most people’s hands. Implement something different, real game changers that will enable companies to do more work with the same amount of people or the same amount of work in less hours. That’s what it’s all about!
As prices recover, the human capital cost of the latest round of industries layoffs will really take its toll. When this time comes many professionals will have already moved on or out of the energy business in order to survive. Will they be available when work picks back up? Who knows! Undoubtedly, finding good and available resources will soon resurface as one of the barriers to success once prices are relegated to the back seat. So finding cost efficiencies is paramount to our future success. Having a clearly articulated plan to do something about these cost efficiencies along with a strategy to execute your plan needs to be on everyone’s lips right now! What’s your plan?
Investor confidence in the industry was already waning with many mezzanine and institutional investors camped out on the sidelines.
Here’s a few exciting game changers that are happening in our world:
We just launched our new field operations reporting and costing tools – adios spreadsheets!
It now easier, more than ever, for Operators and EPCs to add new companies and stay connected with people in the HUB – as men we all know how effectively we communicate!
We’ve added the capability to organize, rank and source your preferred vendors by service type – curb all those incoming telephone sales calls! What next?
Where’s the money? End of well and service reconciliations – help us strike a huge blow against non-productive time!
This month, I would like to pass along our thanks to a few of our Oilfield HUB VIP clients who were gracious enough to co-sponsor our latest HUB Connect Event in April. With the kind support of companies like National Bank, Evolution Oil Tools, Plains Fabrication and Catch Resources, these functions have certainly turned into a huge networking success for all those in attendance. I would also like to acknowledge Craig Braun, Howard McCourt and Greg Coleman from National Bank for sharing their industry expertise and forecasts in their presentations at the event.
Kevin Turko
CEO
Leadstone Group
403.537.6561
Originally  published in theÂ