Sitting On Your Wallets!!

[canadensis]

BTW - you can focus on exec pay if you want, but the really outrageous costs in the oil patch are for folks in the field - many have no education beyond high school and get paid 3-4 times as much as a high school teacher with a Master's degree.

 

And your point is?

 

The young guys that head up north work their asses off, no free lunch working in the field.

 

Funny you don't mention the christmas holidays, summers off, and nice pension that the High School teacher with the Masters degree gets with your comparison.

 

Oh and the publicly funded education that said High school teacher used to get his Masters Degree.

 

Simple supply demand equation at work for how much oil and gass field staff recieve as renumeration.

 

 

[jksnijders]

BTW - you can focus on exec pay if you want, but the really outrageous costs in the oil patch are for folks in the field - many have no education beyond high school and get paid 3-4 times as much as a high school teacher with a Master's degree.

 

 

 

This is probably the single most asinine post I've ever read on this site. I don't know many field hands that get 2 months off in the summer, and get to shut the operation down when it's 40 below. (My bus didn't run in that weather when I was a kid..) Watch a service rig trip pipe in the middle of the Suffield block winter day then tell me the guys are overpaid. The days don't end at 4 pm, or whatever time a teacher wraps up the day. I've spent a month straight sitting in a camp, in the fine areas of High Level (which was 2 hours away) Conklin ( Lac La Biche- 3 hours.) Or Borealis. (From Ft. McMurray, a solid 3 hours.) among many others. Friends and family are a brief voice on the end of a cellphone in those places, if you can find service. I don't know alot of field hands that make high 6 figure salaries, perhaps you do. I put more km's on a vehicle in a month than most teachers or execs do in a year, almost all work related. And I am educated beyond high school, just so you know. But hey, I guess people like myself with a strong back and a weak mind have to find something to do with themselves...

[jksnijders]

 

A work related hazard I doubt most teachers have to worry about.. One guy was killed here, btw.

 

 

 

 

 

[thecamel]

I am sitting 3 hours north of Fort Nelson right now reading this thread, I am one of the field people that did not finish high school, make 4 times as much as a teacher, have a drift boat, jet sled, quads, and dirt bikes, try to make it tarpon fishing twice a year and a nice place to live in Calgary close to the river. I am not bragging , I have been home for a grand total of seven days since October. I start my my day at 6:00 am and I am usually not finished until 9:00 at night, my girlfriend forgets what I look like I am sure, friends and family are distant phone call once every two weeks.

I work hard for what I have and no one ever gave me a hand out.

Everybody is missing the whole point about the royalty's. You should ask what your government is doing with the money they are receiving now.

 

 

Mike.

[Smitty]

Funny you don't mention the christmas holidays, summers off, and nice pension that the High School teacher with the Masters degree gets with your comparison.

 

Oh and the publicly funded education that said High school teacher used to get his Masters Degree.

 

Castus (and jk sinders):

 

FYI, we pack in 12 months of work into a 10 month school year. Trust me when I say we more than earn our "holidays". Don't believe me?

Spend 40 minutes teaching junior high math to 13 year olds. Lets keep the ignorance to a minimum, and skip the tired cliches (or implications) that teachers have an easy job.

 

Having said, that, I agree with a lot of what you have said in this thread; I'm as capitalist as the next guy (check my posts from years past defending said system).

 

As for the publicly funded education system, it is the single greatest investment a country can make.

 

Smitty

P.S. I don't believe in pensions; ask any Nortel employee how well that is working. Hence all the crap I took from more socialist posters way back for publicly outing myself as a Landlord (real estate being either my back-up or primary retirement plan).

P.P.S. No, we don't worry about well blow-ups; just former students who like to air their nearly decade old beefs by holding a secretary hostage...

 

P.P.P.S. Edit: don't mistake my tone, so let me be very clear: I don't (1) complain bitterly (despite that, yes, some of my colleagues do, they should get the hell out...another post) about the wages of a teacher - it is a truly a decent middle class salary and (2) I don't begrudge any former student that makes 2x what I do; good for them, I hope it works out because they're not hedging their bets by skipping post-secondary, plus I knew what I was getting into when I got my B.Ed; no one forced me to become a teacher.

[hydropsyche]

I remember taking to a fairly high paid manager about a house keeping strike that was going on. She said they were being greedy. I asked her if she could trade jobs with them and still keep her salary, would she? She said No.

 

Her response invoked a lot of deep thought around compensation and peoples perception of entitlement.

[Castuserraticus]

I never knocked teachers. My was one and my wife. I know the real hours that the good ones put in.

 

I don't begrudge anyone's pay. The market for their services determines their value whether anyone else thinks it's fair or not. If you don't feel you're paid enough then get other training. You cannot really judge until you walk in that person's shoes.

 

Except MP pensions. They are ridiculous - 6 years service (or just warming a chair - ie Rob Anders) and a lifetime free ride. I guess I should take up politics.

 

 

Castus (and jk sinders):

 

FYI, we pack in 12 months of work into a 10 month school year. Trust me when I say we more than earn our "holidays". Don't believe me?

Spend 40 minutes teaching junior high math to 13 year olds. Lets keep the ignorance to a minimum, and skip the tired cliches (or implications) that teachers have an easy job.

 

Having said, that, I agree with a lot of what you have said in this thread; I'm as capitalist as the next guy (check my posts from years past defending said system).

 

As for the publicly funded education system, it is the single greatest investment a country can make.

 

Smitty

P.S. I don't believe in pensions; ask any Nortel employee how well that is working. Hence all the crap I took from more socialist posters way back for publicly outing myself as a Landlord (real estate being either my back-up or primary retirement plan).

P.P.S. No, we don't worry about well blow-ups; just former students who like to air their nearly decade old beefs by holding a secretary hostage...

 

P.P.P.S. Edit: don't mistake my tone, so let me be very clear: I don't (1) complain bitterly (despite that, yes, some of my colleagues do, they should get the hell out...another post) about the wages of a teacher - it is a truly a decent middle class salary and (2) I don't begrudge any former student that makes 2x what I do; good for them, I hope it works out because they're not hedging their bets by skipping post-secondary, plus I knew what I was getting into when I got my B.Ed; no one forced me to become a teacher.

 

[rehsifylf]

And your point is?

 

My point was simply a response to Mike's post regarding pay increasses for the CEOs of Oil company's. Since the thread started with a suggestion that the Royalty rate reduction was not required and was about greed, I took Mike's post to imply that CEO greed was one of the larger issues. I'm somewhat on the fence about CEO pay, but O&G CEO pay is ~ to CEO pay in other industries. What is really out of whack in O&G is the rates of pay for labour in the field compared to other industries.

 

I'm neither a teacher nor do I work in the field, but I do have close knowledge on what's involved in both occupations. "Field" is a very broad term. I don't claim to know details about all forms of O&G field work, but have dealt with several. As for teachers, in my opinion, they are not respected near enough in our society and comments like, "They work 6 hours a day and have the summers off" demonstrate a lack of understanding about how important teachers and education are to a society, and how dedicated they are to the children they teach. I may not always agree with Smitty (or ever) but I can tell that he would be an awesome teacher and influence on my kids. I pointed out the compensation we get to underline that society does not value the work teachers do. If they did then the respone to my post might have been, "You're right, we don't pay teachers enough."

 

I won't resort to insults as others have done. I will say that if my post was the most assinine someone has read, I find it hard to believe that they have read all that many posts.

 

I did not say anyone had an easy job - my cleaning lady likley works harder than I do, and in worse conditions, as do the folks that collect refuse from the end of my driveway. I wouldn't trade jobs with them, even for the same pay.

 

Since the can of worms was opened here are my observations.

 

I've worked as an officer in the military, a manager in high technology, and a manager in O&G. My perception only, is that of the three groups of operations personnel that I've managed, the military were by far the most resourceful, professional, obviously well trained and lowest paid. The manufacturing operations folks were the most innovative, productive, and competetive and paid slightly more than the military folks, but overall compensation was close. The O&G folks are a mixed bag, and there are some excellent folks out there, but for the most part the biggest differentiator is experience, not capability or potential. Typically, in most industries, the level of compensation is commesurate with formal training or education combined with experience. I don't find that to be true in O&G.

 

To the gent that suggested the conditions are very rough and lonely in the field. I have no doubt they are. I'm not sure they are rougher than those that the men and women of the armed forces face that go out on ship for 4 months straight or to Kandahar for 6 months. A Warrant Officer in either place would make far less than half what a construction supervisor at an O&G site would make. You may not know many field folks that are making more than $220K but I do.

 

To the folks that suggested that O&G field workers don't get 2 months off every summer. That is probably true, but a very large number of O&G personnel work 2 in 2 out. By my count that is 26 weeks a year they are off. And yes, they work damn hard and long when they are in.

 

I was heartened with the response from the one person who is in the field but recognizes that costs are still way out of whack. Supply and demand works, but it can get out of balance, especially when you're dealing with a somewhat captive and non-competitive market.

 

I've enjoyed participating on these boards. I like it when people have different opinions, and mine very often is different than many on here. The global warming thread was probably the best one I've seen, although it has turned rather one sided lately. That said, I think I now understand why many folks stopped posting, or never started.

[reevesr1]

I've worked in the Military, as a Field Engineer for an Oilfield service company, sales in the same company, and managed a assembly/testing lab in a manufacturing area of an oilfield service company.

 

Military: Best training. By FAR the lowest paid, both officers and enlisted (I was an enlisted technician). But the benefits package was really good, and if you stayed in for 20 yrs, really, really good. Work hours could be long, but were generally reasonable. Great people, still think of many of my crewmates as brothers.

 

Field: I used to tell people the hours I worked, but I stopped because people don't believe it. I can come up with multiple instances of working over 48 hrs at a stretch, and one over 60. After these I would crawl in the sleeper and my crew would sometimes drive me home or to a hotel, and often just drive me to the next location where they would wake me up and do it all over again. I never made anywhere near 220K per year, but I did make good money. If you figured it out per hour, it sucked though. Usually 2 weeks on, 1 week off, which really equated to 16 on, 5 off. I don't begrudge anyone the amount of money they made in the field. I had a university degree, but there were guys without who made more than me. I couldn't have cared less. To quote an old song, we worked hard for the money. However, for many of us that were married, it did not take long before we had to choose between the money and our marriages. My wife got tired of raising our kids by herself.

 

Manufacturing: Way better hours, way less pay. I took a manufacturing job to get out of the field. Significantly less pay (like 30-40% less) was worth it to me to see my kids grow up. Oh, and the most important people in the manufacturing world are the technicians, either trade school or HS educated. A good tech is way more important than a good engineer, at least to me. Unfortunately, pay wise they are treated like a commodity.

 

After doing all three different jobs, I can easily state that to me the field person is not overpaid. The amount he or she gives up in their personal life, from my experience, demands the higher compensation. If the pay was not higher, it would be impossible to fill many of those jobs. And also remember that even though many of them only have HS education, many of those HS guys will be the smartest people you'll ever meet.

 

I've never been a teacher. I've taught before, but to peers, not really to students. I have several friends who are. I think they are drastically underpaid. But the fact they are underpaid doesn't mean there is anything wrong with someone in a field job being well paid. The goal should be to raise the pay of the teacher, regardless of what someone in another occupation is making.

[canadensis]

I've never been a teacher. I've taught before, but to peers, not really to students. I have several friends who are. I think they are drastically underpaid. But the fact they are underpaid doesn't mean there is anything wrong with someone in a field job being well paid. The goal should be to raise the pay of the teacher, regardless of what someone in another occupation is making.

 

Problem is the union. When you become a teacher you know that you will be a member of a union going into it, and they cater to the lowest common denominator, hence the pay schedule.

 

Sadly when I think back to my school years I have only 2 teachers that really made a difference in my life.

 

I agree that some teachers should make more. I also have memories of some teachers that were more suited to minimum wage, or a different career path at the least. Looking back I dismiss this to the union environment they worked within.

[DonAndersen]

Let's get it back to the O&G industry.

 

Some facts:

* approx. 60% of any major operation is wages.

* in 1970 I was part of a start up crew for a major gas plant >250mmcf/d

* I made $9500 that year

*a gas sold t for $0.21/mcf

* today gas sells @ $4.00/mcf and has reached peaks of $10.00

A little math says that 4.00/.21= 19.05

Or wages for the same job today should be 9500*19.05= $181,000

But the job pays about $90,000.

 

Meaning that the wage % in operating costs are a lot less.

 

Wrote a sack of AFE's in my time - never wrote one where the payback was greater than 1 year. No point is wasting the ink.

 

regards all,

 

 

Don

 

 

[trailhead]

Let's get it back to the O&G industry.

 

Some facts:

* approx. 60% of any major operation is wages.

* in 1970 I was part of a start up crew for a major gas plant >250mmcf/d

* I made $9500 that year

*a gas sold t for $0.21/mcf

* today gas sells @ $4.00/mcf and has reached peaks of $10.00

A little math says that 4.00/.21= 19.05

Or wages for the same job today should be 9500*19.05= $181,000

But the job pays about $90,000.

 

Meaning that the wage % in operating costs are a lot less.

 

Wrote a sack of AFE's in my time - never wrote one where the payback was greater than 1 year. No point is wasting the ink.

 

regards all,

 

 

Don

 

And the royalty rate in 1970 was 12.5%

Which is about half of todays rate. Maybe that's where the extra $91000 in wages has gone. It's Alberta's "fair share"

[jksnijders]

"I will say that if my post was the most assinine someone has read, I find it hard to believe that they have read all that many posts. "

 

 

"Asinine" may have been a bit harsh. And for that I apologize. A little. I've read a good number here, and yours just hit alot closer to home than alot of the child-like pissing contests I see here.. But as it is, as I am one of the aforementioned field hands that has been on call for waaay too many days straight, and a long day full of stupid calls got to me a bit.

 

 

 

" Typically, in most industries, the level of compensation is commesurate with formal training or education combined with experience. I don't find that to be true in O&G. "

 

You can learn a hell of alot more standing on a rig floor than from a textbook, in many respects. I've gone through many "training" courses that I gained very little from, mainly because what I was taught was, to say the least, very reliant on everything going in a "textbook" fashion. This is rarely the case when dealing with things in the field. Better learn to think on your feet is kinda what I'm getting at.

 

 

"To the gent that suggested the conditions are very rough and lonely in the field. I have no doubt they are. I'm not sure they are rougher than those that the men and women of the armed forces face that go out on ship for 4 months straight or to Kandahar for 6 months. A Warrant Officer in either place would make far less than half what a construction supervisor at an O&G site would make. You may not know many field folks that are making more than $220K but I do."

 

 

Maybe a bit off. I know alot of guys that make a decent dollar, but aside from consultants that stay very busy, or guys pushing really busy rigs, its not a huge percentage in or above the 220 k mark. As for the military, my hat is off to anyone in that line of work.

 

 

"To the folks that suggested that O&G field workers don't get 2 months off every summer. That is probably true, but a very large number of O&G personnel work 2 in 2 out. By my count that is 26 weeks a year they are off. And yes, they work damn hard and long when they are in."

 

2 in 2 out is, from the people I know that work that schedule, usually reserved for the oilsands or battery operating in remote locations.

 

"I was heartened with the response from the one person who is in the field but recognizes that costs are still way out of whack. Supply and demand works, but it can get out of balance, especially when you're dealing with a somewhat captive and non-competitive market."

 

I'm in the field as we "speak", so that makes 2. Costs are out of whack, but realize too that we are dealing with a finite resource. Why should there not be a somewhat trickle down effect. Everything costs more and more all the time. Try building iron when its flat out busy. Then eating the costs of said iron to keep your costs down when billed to oil companies, who never discount the price of what they sell to anybody... Competition for employees that are worth a damn goes up, along with what it costs to keep them when they can go elsewhere at the drop of a hat. At the end of the day, everyone wants the best equipment, with the most experienced personnel, for the cheapest cost. Pretty hard to balance that out I'd say. Look at what is happening now. Activity drops to a 10 year low, people get laid off, move on to other things, move home, etc, etc. Then, as though someone flicked on a lightswitch, everything goes from 0 to 120 km/h. Where are all the people? Why do we have to wait 3 weeks for a frac? Why all these problems? Gee, do the math on that one fellas.. Everyone screaming for iron when it's busy, but when it slows down nobody wants to touch it with a 10 foot pole. Wireline trucks, tubing units, frac spreads, drilling rigs, all cost an arm and a leg to build, yet make absolutely zero when they're sitting in the yard.

[jksnijders]

Field: I used to tell people the hours I worked, but I stopped because people don't believe it. I can come up with multiple instances of working over 48 hrs at a stretch, and one over 60. After these I would crawl in the sleeper and my crew would sometimes drive me home or to a hotel, and often just drive me to the next location where they would wake me up and do it all over again. I never made anywhere near 220K per year, but I did make good money. If you figured it out per hour, it sucked though. Usually 2 weeks on, 1 week off, which really equated to 16 on, 5 off. I don't begrudge anyone the amount of money they made in the field. I had a university degree, but there were guys without who made more than me. I couldn't have cared less. To quote an old song, we worked hard for the money. However, for many of us that were married, it did not take long before we had to choose between the money and our marriages. My wife got tired of raising our kids by herself.

 

 

After doing all three different jobs, I can easily state that to me the field person is not overpaid. The amount he or she gives up in their personal life, from my experience, demands the higher compensation. If the pay was not higher, it would be impossible to fill many of those jobs. And also remember that even though many of them only have HS education, many of those HS guys will be the smartest people you'll ever meet.

 

I've never been a teacher. I've taught before, but to peers, not really to students. I have several friends who are. I think they are drastically underpaid. But the fact they are underpaid doesn't mean there is anything wrong with someone in a field job being well paid. The goal should be to raise the pay of the teacher, regardless of what someone in another occupation is making.

 

 

 

Well said.

 

[reevesr1]

I'm in the field as we "speak"

 

See, that's the problem these days. You guys have too many ways to access the outside world. In my day, all I had was an XJ phone.

 

Get your ass back to work!!

 

 

 

[jksnijders]

See, that's the problem these days. You guys have too many ways to access the outside world. In my day, all I had was an XJ phone.

 

Get your ass back to work!!

 

 

Hehe.. My dad had an XJ, those things were awesome..

[DonAndersen]

Guys/Gals,

 

For a summary of historical royalty rates in Alberta see:

 

http://www.energy.alberta.ca/Org/pdfs/Info...t3-Formulas.pdf

 

Trailhead,

 

According to the above, the royalty rate was 16.5% in 1970. The total cost of the gas plant, land, drilling, pipelines etc. was paid out in slightly better than 1 year.

 

Don

[Castuserraticus]

I sure would like to own the wells shown in Figure 1. I don't now of any conventional plays where we can expect a 24 year well life. Most unconventional plays were not on the radar in 2007.

The graphs aren't as useful without scales or notes on the assumptions they come from. They seem to imply that payout is less than 1 year. That is a very rare project and certainly isn't the average of the different areas I've looked at.

 

Guys/Gals,

 

For a summary of historical royalty rates in Alberta see:

 

http://www.energy.alberta.ca/Org/pdfs/Info...t3-Formulas.pdf

 

Trailhead,

 

According to the above, the royalty rate was 16.5% in 1970. The total cost of the gas plant, land, drilling, pipelines etc. was paid out in slightly better than 1 year.

 

Don

 

[reevesr1]

I left Canada in 1997. While I did not work for a producing oil and gas company, I do know that I had logged wells that did 40 million a day. Lots of them that did over 20. Finding gas around GP was not a very difficult thing, it seemed to me. I came back to Canada in 2005, less than 10 years later. Companies would kill for a 40 million a day well. 10 million is a HUGE well now. I have no data to back me up, but my SWAG is avg initial production has dropped 50%? And again, I don't work for an oil company, but the other difference is decline rate, which is much greater than it was 10 yrs ago.

 

So we are drilling wells in a higher cost environment, for less initial production and a shorter life span. I don't have the slightest idea what the expected payout date range is for a well today. But if it was one year 10 or more years ago, there is almost no chance it is one year today. Again, I'm just speculating as I have no direct information. But if my speculation is correct, it is not difficult to understand why royalty rates may be lower now than 10 or more years ago.

[GuySmiley]

Good discussion here. I don't know the idiosyncrasies of the petroleum industry, but do have a view of the big picture - thankfully it coincides with a recent article out of a leftist rag up here in Redmonton, so I don't have to fully articulate it.

 

http://www.vueweekly.com/article.php?id=14502

 

Seems to me the PC's continue pandering, instead of coming up with a long term plan?