Tulsa, Oklahoma-based Helmerich & Payne, a contract drilling and services provider to the oil and gas industry, has announced a reorganization program to meet the challenges of a depressed oil market and an interruption in the exploration and servicing operations of their customer base. The decision impacts 2,800 employees, the redeployment or sale of assets, and the decommissioning of 37 large drilling rigs.
According to a company statement...
"Throughout our history, the company has sought to be in a position of strength, both operationally and financially, to face the uncertainty and an inherent cyclicality of the energy industry. We have taken swift actions to maintain the health and safety of our employees and customers. We've also made difficult, measured but necessary decisions aimed at preserving the company's long-standing financial strength and its future.
"While the crude oil market imbalance is a global phenomenon, it has more acutely impacted the U.S. market as a result of storage limitations subsequent to March 31. The abruptness of and the overall size of the decrease in demand for refined products such as gasoline and diesel has created an abundance of supply, which has caused refining capacity to shrink, resulting in excess crude oil. This crude oil overhang in supply has created a storage dilemma for E&P companies, limiting opportunities to market their production. And even when they can sell, the prices are very depressed. Consequently, some E&P companies have chosen to shut in production, postpone completions of drilled and uncompleted wells, and many E&Ps have stopped drilling wells entirely until the market imbalance rights itself and it once again becomes economic to resume production and drilling. It is obvious that these current circumstances hold long-term negative implications for our industry. Our experience has shown us that two factors hold the key to surviving a downturn and ultimately furthering the strategic objectives of the company: first, maintaining financial strength; and second, maintaining a long-term view for future potential opportunities."
"In this regard, we will remain focused on establishing new commercial models, expanding our digital technology offerings to customers, increasing our international presence, and cost management. Liquidity is critically important at a time like this, and we are actively reducing expenses in a thoughtful and intentional manner. We are drawing on learnings from the 2015/2016 downturn to idle rigs more efficiently, and we're seeing additional innovative efforts throughout the company pay off and anticipate that this will continue. Given this current environment, we are rightsizing our organization to reflect these new realities."
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?
