Hey Oilfield Guys!!

[Michael]

A rate reduction is a very hard thing to get back! Especially when you cut every ounce of your margins out! This mindset will put you under more times than get you through the hard times! We don't work, provide jobs and provide services for the fun of it! We as companies have to make money too! There are many, many other ways to cut back, watch expenses, cut back hours and overtime to assist in a reduction of cost with the production companies! A 40% reduction in rates is ridiculous and bad for the service industry! No one can survive that nor should be asked to!!

Rather than permanently cutting rates, in many cases it may be better to offer a "courtesy discount" that is effective at current prices - maybe even establish a base price at which the discount kicks in. This could give you the ability to automatically readjust prices when oil prices go back up without having established a new price standard and without having to resubmit higher rates for approval.

We've had to offer some discounts, especially for new business, but fortunately the performance of our products allows our customers to cut cost by saving drilling time, which can be a significantly greater savings than a 10-25% price reduction on our bits or tools.

[Michael]

Is anybody here attending the Horizontal Drilling: Cost Reduction Initiative 2015 in Houston on Wednesday and Thursday? It's billed as "Cost Reduction Strategies Designed Specifically for Drilling Professionals." I'll be curious to hear some of the presentations and panel discussions. I'll be there both days. Let me know if any of y'all are attending.

BTW, if anybody here works for Ryan Directional shoot me a PM, please.

[miket]

The slow down has definitely hit us now.. We are SLOW.. Probably gonna have to let a few guys go pretty soon.

That sucks. Just make sure you hold onto your good ones. You will need em when it comes back. Im still getting jobs in but I know it will stop here pretty quick. I have noticed a bit of a shake up, like maybe companies are shopping around more and harder for the lowest quotes.

[JTeLarkin08]

Rather than permanently cutting rates, in many cases it may be better to offer a "courtesy discount" that is effective at current prices - maybe even establish a base price at which the discount kicks in. This could give you the ability to automatically readjust prices when oil prices go back up without having established a new price standard and without having to resubmit higher rates for approval.

We've had to offer some discounts, especially for new business, but fortunately the performance of our products allows our customers to cut cost by saving drilling time, which can be a significantly greater savings than a 10-25% price reduction on our bits or tools.

This is what we have done for a few customers.. We extended a discount for a 6 month period and at the end of that 6 months we will re-assess the market.

[KR-oldmexico]

I've cut my rate maybe 5% for one customer, I own a small trucking co. I've never gouged the customer when times were good and my rates were competitive wih most which was 125 an hr for heavy haul. I've heard of quite a few charging 150 and I thought that was a bit much.

We also get $125 hr for our haul trucks and always have!

We are sending a letter back to them today. We can possibly survive a 5% reduction in our prices for our goods but that is it. Hopefully it doesn't cost us our business. We have been busting our tail for them for the last 25 years and have a great relationship and have never raised prices when times were good. Hopefully that relationship will be enough. The costs they are asking for will not even cover our raw material costs. We would me machining the parts for free.

Just rubs you the wrong way sometimes. The guy that sent over this price reduction request sent me over pictures 6 months back of all of their high end office guys with 200+ deer that they went and shot as a company bonus. How much are they actually cutting cost on their end? They want all of their suppliers to do the dirty work for them.

These companies are using these time to drive down cost as well all know. Its us small guys that that the biggest hit and suffer the most from it!

Rather than permanently cutting rates, in many cases it may be better to offer a "courtesy discount" that is effective at current prices - maybe even establish a base price at which the discount kicks in. This could give you the ability to automatically readjust prices when oil prices go back up without having established a new price standard and without having to resubmit higher rates for approval.

We've had to offer some discounts, especially for new business, but fortunately the performance of our products allows our customers to cut cost by saving drilling time, which can be a significantly greater savings than a 10-25% price reduction on our bits or tools.

This is what we have done for a few customers.. We extended a discount for a 6 month period and at the end of that 6 months we will re-assess the market.

Sounds like the way to do it! We fortunately haven't had too many request yet on rate reduction as we've tried to stay competitive even through the boom! This will be our approach when that time comes and I appreciate the advise!!

[JMalin]

Consumers win when margins get pinched. Love the competition!

[tex4k]

Consumers win when margins get pinched. Love the competition!

I'll give you $20 per head to go explain in person, to those consumers that are job hunting just how it is that they're winning.

[KR-oldmexico]

Don't feed the troll

Quilty here! Won't happen again!


Thanks mods for cleaning up my post!

[tex4k]

Yea ! I know! Sometimes frustration gets the best of me.

[stevieray54]

Boys don't kid yourself, the world revolves around oil,,,

Why do they call it "BLACK GOLD"

[Grumpy1911]

We had one rental company come in the other day and gave us a 104% daily rental cut.
How bad you think they been Gouging us!?!!!!

[Catarina]

We had one rental company come in the other day and gave us a 104% daily rental cut

Is that on equipment (manlifts, light towers, etc.) or on tools used on the rig?

I've got an equipment rental company....that's crazy, those guys have been stealing from ya'll

[denowt]

We had one rental company come in the other day and gave us a 104% daily rental cut.

How bad you think they been Gouging us!?!!!!

So they're paying you?

It's impossible to cut your price by more than 100%.

[ecallarman]

I too am starting to see requests from our clients requesting discounts. Some are asking for some very aggressive amounts.

[ladrones]

We had one rental company come in the other day and gave us a 104% daily rental cut.
How bad you think they been Gouging us!?!!!!

Looks like the companies are in a great position to get that under control.