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Greener Gra$$

Moonrise over Lantern Drilling on the Stockton Plateau

Odd phenomena goin’ ’round these days according to messages gleaned from various message boards including our own Front Porch over at the MyOldRV forums.  Well, really it is two distinct and different sets of circumstances.

Some noobs, waiting on assignments with the Big 3 players ( GGS, LOMA, Timekeepers) running short of funds or patience or both decided to go with some new(er) oil field gate guard companies.  I can’t say that a bird in the hand is not worth something but I have to think making a move to a new company is inherently risky business.  Incomprehensible  to me is when the move is to a company that has shown they have a propensity for lyin’ and thievin’ (shakes head). I just don’t know folks — I guess it will come out in the wash.   I do know one thing for a damned fact , in 6 months some of the gate guard companies in business today will be nothing but dust in the internet archives and other new companies will have risen up to fill the void.  Tell me this, right after the first of the year (this year!) everybody was all a-twitter about M&R Ranch Services and the fact they were looking for gate guards at an attractive rate of pay.  That was just 60 days ago –when is the last time you heard anything from M&R Ranch Services????

The Lantern boys see another sun rise.

The other issue burning up the message boards is some established gate guard couples are jumping ship to go for the extra $25 or $50 per day some of the other companies are offering.  The tide is flowing outward from Gate Guard Services to the other companies.  Hmmmm; do these folks that I respect know something I don’t know? I have said since Day 1 that it is all about the money in this line of work.  I am going to amend that statement since we have some gate guarding time in grade now.

Let me let you in on some figuring I did this morning.  All this is subjective and based on our experience and the hopefully true in the telling experiences of others.

 

 

Six months in the life of a GGS Gate Guard @ $125/day

  1. Start up suppplies (lights, dingers, uniforms)  —-  $0
  2. Layup costs- (no assignments available between gates) – 8 days on company yard — $0
  3. Scheduled time off  — 5 days@ $125/day
  4. Net days worked – 167 days @ $125 =  $20,875.00

Six months working for the other guy @ $150/day

  1. Start up suppplies (lights, dingers, uniforms)  —-  $$150
  2. Layup costs- (no assignments available between gates) – 15 days @RV Park — $300
  3. Scheduled time off  — 5 days  @ $150/day
  4. Net days worked — 160 days @ $150/day = $24,000.00
  5. Minus expenses  of $450 =  $23,550.00

Hmm, a difference of $2675 for the other company which equates to a difference in pay of $14.80 per day over 6 months.   Would I change companies for basically $100 per week pay raise?  Maybe.  Would I change companies if it meant changing my self employed gate guard status to one of being a company employee?  Not a chance.

Now let me put on my boss man hat that comes with the shiny shoes and all and see what I come up with.   So, this is me , the Boss Man in Corpus or Richardson or Boerne.

If I am that Boss Man paying the higher scale, I am feeling pretty confident right now.  Experienced gate guards are just ringing my phone off the hook and lining up for work.  The tough times are coming up to find gate guards and I am knowing that. Drilling doesn’t slow down because it is 105 degrees outside but the supply of gate guards sure does thin out.  I have that base covered.  I do have a few  nagging factors I worry about.   I am paying 20% (or more) over traditional scale and that impacts profits.  I may/may not be under capitalized as a result.  Maintenance costs are going to increase with every day I am in business as new equipment eventually is not new anymore. Expensive generators are going to average replacing every 14 months.  Fuel costs are going up and up and up.  Diesel cost per day in March 2011 @ $3.95/gal is $47.40.  At $4.45 per gallon, daily fuel costs per guard would be $53.40.  That bottom line is getting slimmer by the day.   So where do I cut back to improve that bottom line?  Delay replacement of support equipment and try to make do with older equipment?  Cut back on the number of service techs?  Pay the service techs less and just deal with sub-standard service levels?  Increase the daily contract rate with the oil company and risk losing the business?

How about if I am that Boss Man in Corpus losing gate guards because my daily rate is at the bottom of the scale?  Well, I must have guards available to stay in business.  I am worried because the tough time to find guards is the summer months and that is staring me in the face.  Let me think what my advantages over the other companies might be.  Economies of scale is the first one.  I am bigger and as such many of the services and equipment are available to me at a reduced rate simply because I have more purchasing power.   Length of time in business is an advantage.   I have long established relationships with many of the bigger oil companies and perhaps new contracts at higher daily rates are more probable because of a longer track record.

Decisions, Decisions!   I have never had a crystal ball  that worked worth a damn but this little quandary is pretty straight forward in my way of thinkin’.   GGS will have to raise their daily rates to service their client base….  and that daily pay raise will happen by summer most likely.   The more guards that jump off that GGS ship, the quicker it will happen so y’all just go ahead and go play in that greener grass now.    We are going to stick with the company that has the most contracts and the biggest client base – that way the time between assignments is minimal.   We are going to stick with the company that has the largest support infrastructure system in place.  And we are going to stick with the company that has the deepest pockets as they usually weather tough business climates better than their counterparts.

Readers know I have an opinion and I am not afraid to voice it.  Should you base your decision on my opinions?   I would say no– Do your research, weigh out  your options and then make up your own mind about the best route to take.

 End Note: Keep on Keepin’ On  by Jack Ingram from the Electric CD.  ca. 2002.   Hard to beat old Jack prior to him going to Trashville and turnin’ into just another CMT pretty boy.

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Greener Gra$$, 8.7 out of 10 based on 7 ratings
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2 comments to Greener Gra$$

  • Bryan

    Great post. Although startup costs (lights,etc) could easily come to much higher than you used in your example working for the other guy. From my point of view as someone looking to get into GG’ing later this year the choice is an easy one. I want the company with the better support infrastructure in place. No one wants to wait days for that “last” piece of support equipment to arrive.

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  • Good points Andy. I would add that whichever of the big three you choose, sticking is a good thing. Most everyone who works for any of those has good things to say.
    We work for LOMA and have had nothing but good experience. Servicing is regular and responsive, the equipment functions well and all the people we have dealt with have been great. For us this is a big one. Money is all well and good, but if you have to put up with any kind of extra “crap” it’s not worth it. The original reason we went with LOMA is because we had apps at all three, but they were the first to call back and the fit seemed good. Anyway, I love that you are always to the point and tell it like it is. See ya in the forum!

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