Expendable Industry: Oilfield Service Companies, Workers Deal With Layoffs In Wake Of Low Oil Prices

Command Center branch manager Kristen Vesledahl, left, speaks to staffing specialist Rena Olheiser on April 22 at their downtown Dickinson, N.D.,office. Vesledahl and Olheiser said more people are coming to their staffing service looking for work since the oil prices dropped. (Dustin Monke / The Dickinson Press)
Command Center branch manager Kristen Vesledahl, left, speaks to staffing specialist Rena Olheiser on April 22 at their downtown Dickinson, N.D.,office. Vesledahl and Olheiser said more people are coming to their staffing service looking for work since the oil prices dropped. (Dustin Monke / The Dickinson Press)

A few weeks ago, a man walked into Command Center, a temporary labor and staffing service in downtown Dickinson, and said he needed a job after being laid off from a high-paying position on an oil rig.

The man said he’d only work for $35 an hour, needed a minimum of 50 hours guaranteed each week, and wanted his housing paid for along with a $150 a day per diem.

After realizing the man wasn’t joking, staffing specialist Rena Olheiser responded in the kindest manner she could muster.

“Well good luck with that,” she said with a smile.

The days of high wages, overtime, free meals and company housing for many oil workers in the Bakken are coming to an end. At least for now.

This is especially true around Dickinson, where there isn’t a drilling rig within 50 miles and likely won’t be until the price of oil climbs back to levels oil companies deem profitable.

“I tell them here, ‘Everyone is expendable. Everyone,’” said Kristen Vesledahl, Command Center’s branch manager.

Alena Praus stands in the garage of her Dickinson, N.D., home on Friday, April 24, 2015. The garage is full of boxes because Praus and her husband, Rich -- lifelong Dickinson residents -- are leaving Dickinson for Fargo next Saturday a little more than a month after she lost her job with oilfield service company Baker Hughes. (Dustin Monke / The Dickinson Press)
Alena Praus stands in the garage of her Dickinson, N.D., home on Friday, April 24, 2015. The garage is full of boxes because Praus and her husband, Rich — lifelong Dickinson residents — are leaving Dickinson for Fargo next Saturday a little more than a month after she lost her job with oilfield service company Baker Hughes. (Dustin Monke / The Dickinson Press)

‘Plan B’

Alena Praus, a lifelong Dickinson resident, doesn’t look like a typical oil industry worker. She’s 63, has a grandchild in college and doesn’t have long before she’s able to retire the way she wants.

She also happens to be one of the many people in western North Dakota who lost their jobs when the oil industry throttled back operations earlier this year.

Praus had spent more than three years as a district clerk for Baker Hughes when, in March, the oilfield services company made multiple cutbacks at their Dickinson office.

While she is grateful Baker Hughes spent time training her, sent her to seminars and, she said, “put the trust in me to do this job,” she wasn’t surprised when the company cut her position as a result of falling oil prices, which created less demand for work.

“I could feel it in the slowdown of the work,” Praus said. “They had to give someplace. They had to go somewhere. I have no ill feelings at all.”

Fortunately for Praus, she had a “Plan B.” She and her husband Rich — who is already retired after spending his career with Dan’s Super Market — spent the past couple of years having their retirement home built in Fargo, where their son lives, and plan to leave Dickinson for good next Saturday. She has been applying for jobs in Fargo and wants to work a couple more years before retiring.

While she’s fine with the move, it happened two years ahead of schedule.

“To me, it wasn’t a big, traumatic thing,” Praus said.

Still, she can’t help but worry about her former co-workers who didn’t have a backup plan.

“The guys that got laid off from out of town, out of state, they came from states where there were no jobs,” she said. “They came up here to North Dakota to get a job, left their families at home, got an apartment and worked here. Now, they’re without a job and go back home, and there’s still no jobs there. That’s the ones I really feel for — the guys with the families.”

 

‘The human side’

Rob Heim is one of those employers who has been forced to let workers go — something almost unthinkable in December, when he said business was still “fast and furious.”

The manager of Bob’s Oil Field Service in Belfield, a company founded by his father in 1977, Heim said one of the most difficult parts of the oil slowdown has been telling people who came here from other states seeking a job, and a little redemption, that he no longer has enough work to keep them employed.

“What’s really tough for me is when I see these guys come from Michigan and Idaho, and they pack up to come here and kind of settle in and start going to work, and then all of sudden they’re sitting across your desk and you say, ‘I don’t have anymore work for you,’” Heim said. “A lot of them are here temporarily. That’s not the worst part. It’s the ones who move their families here and everything, and all of a sudden they’ve got to uproot their families and go back home. That’s tough. The human side of it. I’ve been at this a long time. I’ve got 37 years in the Patch. It’s never easy for the human side to see the suffering that goes on that way.”

Bob’s Oil Field Service is a diversified company. They have multiple trucks, backhoes, excavators, steam cleaners and roustabout services. Tank battery construction and maintenance, Heim said, has been the company’s backbone. But even that is slowing down.

Heim said work is coming much slower than it did last fall before oil prices dropped. While he said it’s clear that the drilling side has slowed down, his company is seeing operators shut in wells to save money on maintenance.

“There’s less wells coming on with less rigs and less work,” Heim said. “The construction has slowed down a lot for us. … We’re finding that they’re not fixing the margin of wells at this time. If they have troubles, they’ll shut the wells in and wait until the prices come up to fix them.”

Heim said he’s doing what many other service companies are this year — “taking a breath” to catch up on equipment and infrastructure.

“We grew faster than we wanted to,” he said. “This gives us time to get our infrastructure up to speed also. That’s important. And then, we’ll just take ’er as she comes.”

 

Nuverra reloads, shuffles work

The low oil prices have made some people nervous about what’s to come.

Nuverra Environmental Solutions, a major employer in the Bakken, heard some concerns recently when they traded in dozens of trucks that were later put up for auction.

“I think there was some question about ‘What are you guys doing?’” CEO Mark Johnsrud said.

But the trucks put up for auction had nothing to do with the slowdown, he said. The oilfield service company traded in the trucks in order to upgrade to new, more efficient equipment.

Nuverra, formerly Power Fuels, does not have any layoffs planned in North Dakota, Johnsrud said.

The company has transferred some workers from Dickinson, where activity has slowed, to Tioga, he said. Nuverra also continues to be busy in the Watford City and Williston areas.

“Where we are not as busy, we’ve moved some people into different roles and responsibilities,” Johnsrud said. “Overall, we are not going through any type of major type of downsizing or layoffs or anything like that.”

Johnsrud expects activity to see a continued decline in drilling and completion work until this summer.

“I think some companies are still just trying to decide what their game plan is because it’s been such a rapid shift in price,” he said.

 

Small companies stay busy

Smaller service companies aren’t feeling quite the same pinch as some of the multinational or large local service companies.

Guy Grooms, one of the co-owners of 4-Corners Hotshot in Dickinson, said his six-person fleet hasn’t felt a big impact because most of their work comes in assisting workover rig crews that maintain producing wells.

“We haven’t slacked off too much,” Grooms said. “We stay pretty busy.”

Grooms said he’s thankful to be as busy as they are.

“There’s a lot of people that are losing their jobs,” he said.

Blaine Fugere, who runs B & B Hot Oil Service in Dickinson and has been in the oil business since 1981, said work is lighter than it has been. But after weathering other slowdowns throughout the years, he’s confident oil prices will bounce back.

“I’ve seen so many up-and-down spikes,” Fugere said. “It’s nothing to worry about; I don’t feel.”

 

Still jobs out there

While layoffs abound in oil drilling and service companies, the office manager at Job Service North Dakota in Dickinson said there’s still plenty of work to be found — even if it doesn’t pay like it used to six months ago.

Mary Urlacher said there has been an uptick in people coming to her office and looking for employment opportunities after being laid off from oilfield jobs. Drilling rig and roustabout workers are those who’ve felt the biggest impact, she said, as well as the truck drivers who serviced rigs. Many positions, she said, are seeing hours being cut.

“It’s across the board,” Urlacher said.

Vesledahl said Command Center is sending multiple people to wash drilling rigs that have been taken out of service until oil prices rebound.

“That’s the hot job right now,” she said. “Everybody is washing rigs. They’re busy.”

Job Service has plenty of openings in Dickinson. More than 150 jobs were posted on its website in the past week. Many were labor jobs in the trucking, construction and agriculture fields.

Heim said he’s curious as to whether some companies are trying to find more experienced truck drivers who may have been cut elsewhere.

“I can’t imagine they need more truck drivers out there,” he said.

Plus, there’s still old-fashioned jobs that don’t pay oilfield wages, such as working in a supermarket. Coborn’s Inc., the parent company of Cash Wise Foods that plans a June opening in the Prairie Hills Mall, posted more than 30 openings on Job Service’s website last week.

But some people, Vesledahl said, will only take those positions out of desperation.

A week after first coming to Command Center, the same man who walked in all but demanding another high-paying oil job came back still in need of work.

That day, he took a position that paid $12.75 an hour.

For some, Vesledahl said, “there’s nothing better out there.”

Forum News Service Oil Patch reporter Amy Dalrymple contributed to this story.