State of the Industry: Intro to the Downturn Survival Guide

  • Part 1: Diet Tips for the Struggling Landman
  • Part 2: Good Grief
  • (Coming Soon) Saving Cents: Not Actual Financial Advice
  • (Coming Soon) How Desperate Are You? Romance in West Texas
  • (Coming Soon) Sourcing Deals & Supplies at Industry Events
  • (Coming Soon) What to do When There’s Nothing to do
  • (Coming Soon) Preparing for the Next Boom

This is more true than any landmen would like to admit

Me & LandmanFieldNotes are working on the Downturn Survival Guide. This is just an intro…more to come, stay tuned!

Nothing new here…landmen are fucked. That’s ok if it’s going to wash out the weak hands…people that became landmen in the boom just because it was easy. Losing good landmen is something that has happened during every bust, but my list of colleagues has significantly decreased.

There are fewer options for landmen to keep employment in O&G every downturn. Some of the “bros” end up keeping their jobs simply because they were part of the right frat, or went to the right school, or suck the right cock…whatever, you get the point.

Fewer people, but the same amount of work

The amount of work doesn’t change because the market is down. It takes at least a couple of weeks, usually months, to get to the point where an E&P has dropped enough of their commitments to really decrease the amount of work required to continue operating. BUT, when it’s decided that we “immediately cut costs,” it seems easy to fire most of the land staff…we can always rehire those contractors when we need them, right? The amount of work doesn’t change just because you fired 80% of the land staff. That means the ones remaining, who probably have to work for less money than they previously did, just to preserve their jobs, are now doing 200% MORE WORK.

Fewer Fish in a Shrinking Pond

Each downturn there are fewer landmen working on these jobs when things finally come “back.” These E&Ps think they can “lock in” discounts with land work just like they can with service companies. When you cut 30% of the rates on service companies, a lot of the time they have to decide between keeping their best/most experienced guys, or having 5 guys to try to take up that slack. You’re reducing the quality of everyone involved in your process.

A lot of the best landmen I know are no longer working as landmen. A handful are retired. Most are working in other industries. They are good at research, have people skills, and generally know how to work telephones and computers…those qualities translate into just about any job. Sure, they sacrifice a lot of the freedoms that we love as landmen, but they gain security. That’s a trade off more and more people are willing to take.

The Revolving Door of Aspiring Mediocrity

So when these projects staff back up, they are pulling from a shrinking pool of qualified landmen. I guess the colleges with a PLM degree might push out a few “landmen” every year, but can anyone say that those degrees are worth any more than a roll of toilet paper in 2020? You get a couple of decent landmen and hammer those guys on their day rate, then you post ads on AAPL looking for literally anyone dumb enough to send you an email and then you just keep that revolving door of aspiring mediocrity going until you get fired. These new brokers are getting consistently “one and done.”

Have a buddy that can get you the MSA for land services. Start brokerage with some nature + color name and claim “combined 10,000 years of experience.” Start a webpage on Squarespace, get a cheap office that you put a sister/niece/aunt/cousin in to answer the phones. Bill the fuck out of the client because you know there’s no way you can live up to the promises you made to get that sweet gig and eventually they will realize it. Kick back money to your buddy that got you the deal, because when you go tits up he’s obviously taking the fall with you. Rinse. Repeat.

Want to know how to turn a good landman into a stereotypically lazy landman? Cut him from $500 to $300 a day, then expect him to work like you’re paying him what he’s worth. Give him all of the “hard” work, because he’s got the experience to do it. Expect him to come in early and stay late, but don’t pay him for it. Surround him with dog shit “landmen” that show up one week and are gone the next. You might look at him and say he’s being lazy, but really he’s giving you $300 of work a day…probably more, but you don’t get gold for the price of bronze.

The Extinction Event

The brokers that roamed the earth with the dinosaurs are going extinct. Each downturn, more of them retire. The old broker model is broken, as was the model before it. Eventually someone will come up with a new system to fill the void, but until then…it’s a new game. By that, I mean it’s the same game that management teams have been playing with investors for over a decade. Promise the world, take as much money as possible, adjust your metrics for success, continue to “grow” in order to show value, and then walk away when the shit catches fire.

To help prepare everyone for the possibility that this downturn lasts longer than the E&P press releases would lead you to believe, we’re working on the Downturn Survival Guide. It’s not going to last forever. We’ll be back, eventually. In the meantime…decide if you really want to be a landman. If you’re out of work, and still decide that you want to be a landman…well, let’s ride on this Road Trip to Nowhere together.

Coming up:

  • Diet Tips for the Struggling Landman
  • Good Grief
  • Saving Cents: Not Actual Financial Advice
  • How Desperate Are You? Romance in West Texas
  • Sourcing Deals & Supplies at Industry Events
  • What to do When There’s Nothing to do
  • Preparing for the Next Boom

Sorry bro…something tells me that plan didn’t work out for you

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