For this year’s salary survey, there’s some good news and some bad news.
The good news is that the bad news shouldn’t come as a surprise to anyone, since it’s a consequence of what everybody already knows: the industry is experiencing a prolonged downturn, which means there aren’t very many job openings, which brings us to this particular bit of bad news: There is no salary survey this year.
Last year’s survey is included for reference, but for the first time in decades, an updated survey isn’t possible.
“I couldn’t even fudge it. The numbers are just way too low,” said Mike Ayling of MLA Resources in Tulsa, who has conducted the annual salary survey for AAPG since 1981.
He explained that the amount of data available for the survey is a function of how much hiring and job-searching is going on, and 2016 didn’t see much of either.
“Industry activity has been so mild … it would not be a valid survey,” Ayling said.
“Virtually all of the people who are in the database I would normally include in the survey are guys with more than 30 years of industry service. That’s one cell,” he elaborated.
State of the Job Market
Ayling said he’s short on data, but he does have some anecdotal information on the state of the industry, and he said the state of salaries this year is most likely a continuation of last year’s story, “only worse.”
Last year’s salary survey saw very little change over the previous year, and Ayling suspects that would be true this year as well, if he had the data to analyze.
The good news, however, is that the worst of it appears to be over.
“I’m not seeing a huge number of layoffs anymore. I think we saw them a year or two ago, but I’m just not seeing a lot of hiring activity,” Ayling said.
He said smaller companies are still doing some downsizing, but not nearly to the extent that they were in 2015 and 2016.
“In some cases where companies are in serious financial trouble, they may have asked people to take cuts, or they may have cut their more expensive people, but I don’t have a lot of hard data to back that up,” he said.
“That’s the more typical story for the smaller companies,” he added.
“For the larger companies, I think they’re involved in these horizontal plays that are producing from the wells they’ve drilled, and they’re probably drilling more wells in the formations where they’ve had some success, but they’re not doing a lot of exploring,” Ayling added.
Of course, the Permian Basin has seen a lot of attention and activity this year, but Ayling said he hasn’t seen any significant amount of hiring as a result, so it’s likely that oil producers have simply diverted resources from other horizontal plays to handle the workload.
State of the Industry
Meanwhile, many of the people who were laid off a year or two ago are giving up the job search and leaving the profession.
“The ones that have been laid off have told me there’s just not anything out there,” Ayling said. “There was a guy with 10 years in the industry who told me, ‘I’m sorry. I’ve got to give up on this industry and find something else to do.’”
Meanwhile, the lack of exploration activity spells a lack of skills development for those petroleum geologists who remain on the job.
“I’m really concerned for the profession that young geologists are largely being used to geosteer and not being trained in exploration,” Ayling said.
“If you took one of these five or even 10-year people and set them out in a county in Oklahoma or west Texas and told them to look for prospects, they might not know where to start.”
“If people are viewed largely as technicians to guide a drill bit in a horizontal hole, as opposed to explorers,” he said it could have a long-term adverse effect on the industry’s ability to find oil when the demand returns.
“That may not be universally true, but I seem to hearing a lot of that,” he qualified.
Based on current trends, Ayling said there doesn’t appear to be enough data on which to base a valid salary survey in 2018, either.
“If you want to tell people to contact me and tell me how they’re doing, it might make it possible to do a survey next year,” he said.
Historical Averages Salary
Ayling can be reached at MikeAyling@mlaresources.com