Antero Resources Corp. is laying off about half of its land broker workforce, spread across Ohio, western West Virginia, Oklahoma and Texas, to move more money to Appalachia development, a top executive said Tuesday.
At the height of its leasehold acquisition-phase, Denver-based Antero employed more than 1,000 land brokers, who worked on the ground and behind the scenes to secure acreage, mostly in the Appalachian Basin, Chief Administrative Officer Al Schopp told NGI's Shale Daily.
With its 4,000-plus of drilling locations now in hand, not as many people are needed to sign on more property.
"We haven't released our capital budget for 2015 yet, but we have been in a fairly aggressive land acquisition mode for the last few years," Schopp said. "This year, we acquired around 90,000 new areas. To do that requires a significant land brokerage machine..."
However, "one of the things we do know that we want for 2015, even though we have not released our capital budget yet, is that we want to to put capital that we spend into the ground. We want to generate revenue, generate production, benefits that come to communities from severance and royalties..."
Moving more capital to development means "we have to let go of a significant number of land brokers," said Schopp. All of them are contractors; none of the Antero workforce is impacted.
Antero's land brokers do a lot of different things for the company, he said.
Many of Antero's brokers have helped courthouses across the country automate county records, basically enabling "title shops" for land acquisition services in Fort Worth, TX, in Oklahoma, in Ohio and various offices in West Virginia, where Schopp is based.
"We will, by the end of this [layoff], have probably under 600 land brokers" at work across the country, he said. Brokers' services always are needed.
"They do a lot of things for us...they keep ahead of the rigs. The ones primarily laid off are associated around land acquisition, people you would call 'in the field,' or 'feet on the street' acquiring new leases. We do have a fairly significant number, and we will continue to..."
No matter what the final 2015 capital expenditure plans are, Antero will be spending more on drilling, Schopp said.
Hundreds of landmen have been out of jobs for weeks across the Midcontinent, into Texas, Louisiana, New Mexico and Colorado, sources have told NGI's Shale Daily.
According to Baker Hughes Inc. data, the U.S. oil rig count peaked at a record of 1,609 drilling rigs for the week ended Oct. 10. That measure of oil drilling activity had declined to 1,482 as of Jan. 2 (see Shale Daily, Jan. 5). Fewer rigs means fewer workers.
Ancillary oilfield industries also are feeling the pain of lower oil prices. By early March, more than 700 U.S. Steel Corp. employees in Ohio and Texas are to be let go, the company confirmed Tuesday. Most of the employees are in the energy-related tubular steel pipeline products business.
The Pittsburgh-based company already was facing stiff overseas competition for lower-priced oil and gas pipeline products. Now it's facing a big challenge from low oil and gas prices.
U.S. Steel plans to begin idling its Lorain, OH, facility, which employs 612, in March. Also to be let go are more than 140 employees at a Houston rig/technology facility.
Falling prices have hit the oilfield sector particularly hard, said Simmons & Co. analyst John Daniel. In a note following a tour of some firms in Oklahoma, Daniel said the pressure to reduce costs has "dampened the holiday spirit..."
Daniels said confusion in the oilfield industry abounds "surrounding the potential magnitude and velocity of this impending slowdown...Such confusion and volatility are telltale signs that any guidance imparted on 4Q2014 earnings conference calls and/or January investor trips should be met with caution."