San Angelo has a number of apartments and hotels ready to come online. They were planned and constructed during our local economic boom, fueled by oil and gas exploration. The picture has changed and is expected to become more dire. Bloomberg reported:
Oil drillers will begin collapsing under the weight of lower crude prices during the second quarter and energy explorers who employ them will shortly follow, according to Conway Mackenzie Inc., the largest U.S. restructuring firm.
Companies that drill wells and manage fields on behalf of oil producers will be the first to fall after the benchmark American crude, West Texas Intermediate, lost 57 percent of its value in seven months, said John T. Young, whose firm led the city of Detroit through its 2013 bankruptcy.
Oil companies have slashed thousands of jobs, delayed billions of dollars in projects and dropped or scaled back expansion plans in response to the prolonged rout in crude prices. For oilfield service providers that test wells and line the holes with steel and cement, the impact of price reductions forced upon them by explorers will start to pinch hard during the second quarter, Young said Thursday.
“The second quarter is going to be devastating for the service companies,” Young said in a telephone interview from Houston. “There are certainly companies that are going to die.”
How will the reduction of primary jobs impact secondary ones? Traffic on the Mertzon highway is less crazy and more oilfield equipment is parked in company yards.
Hotel rooms might be more available for San Angelo's Stock Show and Rodeo. This year attendees may be a room at a decent price.
Update 1-31-15: Texas' rig count continues to decline.
Update 3-5-15: Bloomberg raised the question as well.
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