Devon Business Practices

[TechArch]

I drove by this morning and the blinds are drawn. It looks eerie.

[catch22]

I drove by this morning and the blinds are drawn. It looks eerie.

Thanks for the report

[foodiefan]

KFOR reporting that the building is closed to the public today and tomorrow.

Also a tweet on Twitter about enhanced security and having blinds drawn over the Windows. Can anyone confirm that? That seems a bit much and possibly just being over dramatic in the moment.

perhaps. . .but in this day an age of "sensationalized reporting", it wouldn't surprise me to see someone with a camera pressed up to the window . . .

[catch22]

perhaps. . .but in this day an age of "sensationalized reporting", it wouldn't surprise me to see someone with a camera pressed up to the window . . .

True, and TechArch above just confirmed that it indeed was true.

[sooner88]

Luckily they have a parking garage to quickly escape from. I felt bad for all the employees that were let go from CHK that had to walk to their car with reporters and cameras all over.

[gopokes88]

Building was "closed" at one point. I think only employees were allowed in and out.

[Urbanized]

HR is tricky. You never know how someone is going to react to termination, be it a layoff or a firing. It can range from an understanding acceptance, to grief, to extreme anger and hostility. It's always a good idea to have things as controlled as possible; security in its place, IT ready to shut off account access, multiple personnel ready to show people to the door (and I don't mean that in a combative way, unless it turns into that). This is true even when it is a single termination. When you are doing hundreds of them you DEFINITELY want to have all of your ducks in a row. Completely understand the need to control the environment, provide privacy and security. Both for the employees who are leaving and for the ones who are staying.

Best wishes to all affected.

[warreng88]

Redirected energy: Laid-off workers may have to find new fields

By: Brian Brus The Journal Record February 18, 2016

OKLAHOMA CITY – Doug Wearley expected phone calls from Devon Energy employees this week.

“I’ve had multiple people who I’ve known for a while tell me, ‘Doug, I may be calling you soon,’” the CSI Recruiting director said from his Denver office. “And I said, ‘I hope I don’t hear from you.’ Unfortunately, I heard from all of them.”

Wearley’s livelihood is based on matching professionals in the upstream oil and gas industry to jobs that fit their skills and experience. Devon’s announcement Tuesday that the Oklahoma City company was laying off 1,000 employees flooded Wearley’s already-full talent pool.

The nation’s energy industry workforce is folding under the pressure of low oil prices. At the beginning of February, Oklahoma City-based SandRidge Energy Inc. announced about 170 job cuts. Over the last year, the company’s total workforce has dropped from 1,157 employees to 717 employees.

The energy companies have not specified which jobs are being cut, but Wearley said the majority of workers are probably engineers, geoscientists and landmen. Placing them in new jobs outside the sector within Oklahoma will be a challenge that will depend heavily on their skill sets, he said. Engineers and geoscientists have strong backgrounds in math and sciences, for example, while landmen are focused more on leasing, real estate and business development.

“It’s going to be tough for everyone, because for the majority of oil and gas people, this is all they know,” he said. “Unfortunately, I think a lot of people are going to have to leave the industry temporarily.”

Displaced energy workers who have experience with heavy equipment operation and welding might get lucky in construction, said Mike Clancey, principal at FMI Corp. The management consulting firm focuses on the engineering and construction industries.

“I’m down here in Houston, and we’re experiencing the exact same thing,” Clancey said. “What we’re finding is that … folks coming out of oil and gas are backfilling structural labor shortages in the construction industry.”

“But it’s important to recognize that jobs in construction don’t typically pay as well as oil and gas,” he said. “There’s been tons of demand for welders, for example, who might get $50 to $60 per hour and all the time they can handle in oil and gas. But in construction in Texas, that’s maybe a $30 to $35 per hour job.”

Clancey said contractors are leery of investing in workers from outside their own industry because they might leave as soon as oil prices rise again.

Jonathan Willner, an economics professor at Oklahoma City University, said it was likely most of the Devon cuts were in junior positions, not people who can retire. Although executives individually cost more to employ, someone has to be kept in the office to manage remaining workers, he said.

“Their ability to find a job is going to depend on two things: the specific nature of the skills they have and other jobs that are available,” he said. “If you’re a petroleum engineer who specializes in drilling and exploration? No one is hiring in that field. Accounting, however, is a skill you can take somewhere else.”

Willner said he’s thought a lot about the irony of timing a job loss. Those caught in SandRidge’s cuts, for example, got a jump on finding replacement employment ahead of ex-employees from Devon. Leaving one industry for another will not be easy, he said, because Oklahoma City is still overly dependent on the energy sector.

SandRidge spokesman David Kimmel said his company’s cuts affected many departments. Kimmel said he couldn’t discuss specific positions or job-placement efforts.

“Our folks have ended up in a lot of reputable companies around town in the services industry, health care, transportation and pretty much everywhere except oil and gas,” he said. “Folks are clearly transitioning to the non-energy job sectors.”

Wearley is concerned about the wide range of jobs being eliminated in energy. If operations shrink too much, he said, companies will have to retrain from scratch when oil prices start to rebound. It also makes his own job difficult to predict.

“I’d like to say it’s just senior-level people or entry-level people, but it’s not. What we’re seeing is across the board,” he said. “That’s what makes it frustrating for us, because we can’t figure out what these companies are thinking.”

[BG918]

More Devon layoffs

http://newsok.com/devon-energy-lays-...rticle/5590339

[u50254082]

Any idea which types of employees are being laid off?? Field people or office people?

[gopokes88]

Sucks. 300 isn't too bad though, most if not all of that can absorbed. (maybe not just in energy, but throughout the entire city economy. although most you would be surprised at the size of our energy start up scene right now)

[PhiAlpha]

Sucks. 300 isn't too bad though, most if not all of that can absorbed. (maybe not just in energy, but throughout the entire city economy. although most you would be surprised at the size of our energy start up scene right now)

Yep. Over the last year or so, the private equity backed O&G startup scene has really come to life here. The PE boom really kicked off back in 2013-2014 but most of the companies had been HQ’d in DFW, Houston, Tulsa, and Midland up until now. The local layoffs have helped spur some of the creativity that’s caused the new companies to spring up. Glad to see we’re finally getting the benefit of some of that.

[Urbanized]

^^^^^
This is accurate based on a small sample of people I know who have gone this route after doing time with Fortune 500 firms.

[Pete]

It's amazing to me that given the size of the larger O&G companies here in OK, that most are completely and totally reliant on one simple thing totally outside their control: The price of a barrel of oil.

Many of our city leaders are in O&G and they are constantly pushing more measures to diversify the economy, yet their own companies are the least diverse in the history of big business.

If you really care about OKC, stop your own practice of this crazy boom and bust which results in thousands losing their jobs in a completely predicable cycle.

[sooner88]

Yep... I work in oil and gas banking and these layoffs have resulted in a lot of new startups being formed. Provided the funding is in place (PE, commercial or personal), it seems the upside is too high to not work small/private.

[OkiePoke]

Yep. Over the last year or so, the private equity backed O&G startup scene has really come to life here. The PE boom really kicked off back in 2013-2014 but most of the companies had been HQ’d in DFW, Houston, Tulsa, and Midland up until now. The local layoffs have helped spur some of the creativity that’s caused the new companies to spring up. Glad to see we’re finally getting the benefit of some of that.

What are some of these PE firms? I may want to throw my hat in the ring.

[sooner88]

What are some of these PE firms? I may want to throw my hat in the ring.

EnCap and Kayne Anderson are two of biggest PE firms in the local start-ups. There are a lot around though.

[PhiAlpha]

EnCap and Kayne Anderson are two of biggest PE firms in the local start-ups. There are a lot around though.

EnCap and Natural Gas Partners are probably the largest with Kayne Anderson up there as well. Quantum is also a larger one but there are a ton and even more that have split off from the original companies over the last few years and are specializing in certain size investments. The amount of private equity in the game over the last few years has been insane.

[OkiePoke]

And by 'throwing my hat in the ring' means trying to get a job at a startup... not backing them lol

[PhiAlpha]

It's amazing to me that given the size of the larger O&G companies here in OK, that most are completely and totally reliant on one simple thing totally outside their control: The price of a barrel of oil.

Many of our city leaders are in O&G and they are constantly pushing more measures to diversify the economy, yet their own companies are the least diverse in the history of big business.

If you really care about OKC, stop your own practice of this crazy boom and bust which results in thousands losing their jobs in a completely predicable cycle.

It's not just a barrel of oil but also natural gas and natural gas liquids and all have been depressed at times over the last 15 years. Energy companies are just that so I'm not really sure what they can do to diversify. Most complementary businesses still rely on commodity prices and the alternative energy businesses all suck. CHK was as good as any integrated company around at diversifying into every part of the energy business but of course, all of those complementary businesses still rely on commodity prices. As far as alternatives go, the profitability and efficiency just aren't there for renewables to be worth the investment right now unless you're a major and even then they still really aren't (hence why they aren't a bigger part of the energy mix yet), coal is on it's way out, and the most viable and efficient energy option, nuclear, has been regulated into oblivion. There just aren't many viable ways for Oil & Gas companies to diversity outside of Oil and Gas.

The best way for companies to avoid the hiring and firing during boom and bust cycles is the way Continental has done it...run efficiently and lean then only add staff when absolutely necessary. Devon and CHK went on hiring sprees and threw a ton of people at all their problems (CHK obviously more so than Devon) and it's coming back to bite them as they sell non-core assets and try to lean down. CLR's way may not have been sexy but that's pretty much the model of how to run a successful large E&P company that can weather the ups and downs as successfully as possible.

[PhiAlpha]

And by 'throwing my hat in the ring' means trying to get a job at a startup... not backing them lol

In that case... those are all companies backing the startups, not the startups themselves lol.

[BG918]

The best way for companies to avoid the hiring and firing during boom and bust cycles is the way Continental has done it...run efficiently and lean then only add staff when absolutely necessary. Devon and CHK went on hiring sprees and threw a ton of people at all their problems (CHK obviously more so than Devon) and it's coming back to bite them as they sell non-core assets and try to lean down. CLR's way may not have been sexy but that's pretty much the model of how to run a successful large E&P company that can weather the ups and downs as successfully as possible.

Good point. I've always heard 5 people at CLR do what it takes 10 people at DVN and (at least in the past) 15 people at CHK to do effectively.

[chuck5815]

What are some of these PE firms? I may want to throw my hat in the ring.

Just off the top of my head, you've got names like:

Mach Resources
Roan Resources
Red Bluff Resources
Native Exploration Oil and Gas
Rebellion Energy (I believe it was recently either sold or rolled up into Camino Energy)

And obviously tons of companies and individuals trying to buy non-op interests and/or mineral rights.

[PhiAlpha]

Just off the top of my head, you've got names like:

Mach Resources
Roan Resources
Red Bluff Resources
Native Exploration Oil and Gas
Rebellion Energy (I believe it was recently either sold or rolled up into Camino Energy)

And obviously tons of companies and individuals trying to buy non-op interests and/or mineral rights.

Rebellion is actually up in Tulsa and I think Camino is in Denver, but you're right, there are at 3 companies being rolled up into Camino at least as to their interests in the SCOOP/Merge. To add to the OKC PE Backed/Startup list off the top of my head:

Tapstone
89 Energy
Warwick Energy
Antioch Operating (Formerly Harding & Shelton)
Canaan Resources
Cardinal Production Co.
Cheyenne Petroleum
Jones Energy (Based in Austin, but just opened a decent size office here and most operations are based in OK)
Midwest Energy Investments
Ward Petroleum (Not new but moved a significant number of employees from Enid to OKC)
Red Stone Resources
Red Mountain Exploration
Wake Energy
Echo Oil & Gas
Derby Exploration
LeNorman Operating
Ventana Exploration & Production
Riley Exploration
Black Swan Oil & Gas
Compass Production (not really a startup but moved here from Dallas a year or so ago)
Novo Oil & Gas
Payrock Energy II

And as Chuck said a ton of PE and personally backed non-op interest & mineral acquisition startups. Also a ton of all of these types of companies popping up in Tulsa over the last few years.

[checkthat]

From March 7:

Devon Energy to buy back $1 billion worth of shares, raises dividend
https://www.reuters.com/article/us-d...-idUSKCN1GJ352