Oil And Gas Companies Sell Unused Equipment During Downturn
OKLAHOMA CITY - Some small oil and gas companies have had to make tough choices as crude oil prices drop.
An Oklahoma-based auction site said its phones are ringing off the hook with companies trying to unload equipment just to stay afloat.
This auction site is called Production Brokers.
The CEO said business for them is actually booming from the oil and gas downturn since companies are selling off oil equipment to make payroll and pay their bills.
“What we've done is we've done a one-stop shop for the oil and gas industry,” said Ed Martin, Production Brokers CEO.
Martin said Production Brokers is like an eBay for the oil and gas industry. Users register as a buyer or seller and then start shopping. The site simply brings the buyers and sellers together.
“Then we are just matchmakers, we try to help people liquidate their assets,” Martin explained.
The oil and gas auction site sells equipment, oil and gas leases and oil and gas services and has job listings.
The response lately has been huge.
“Where can I list my services? Where can we list our equipment? If I am going to be looking for help or I want to help my employees find jobs,'” said Greg Womack, a partner at Production Brokers.
Production Brokers reported seeing mostly smaller to mid-sized companies selling things off right now.
Experts said when companies go from $120 barrels or even $80 a barrel down to $45, it affects their bottom line and they look at where to save money, like selling off extra equipment they aren't using.
“Big push for people that are wanting to unload a lot of equipment, so rigs and downhole submersible pumps, you name it,” Martin told News 9.
The inventory list just one company was looking to sell had 50 items listed, some with quantities of 20 of each item.
Martin said the list of companies is growing. It's turning into a buyer's market where, for years, it was a seller's market, he added.
“The downturn is going to cause quite a few people to liquidate their excess inventory, things that they're not using that has been there or in warehouses or on the ground,” Martin added.
Production Brokers will launch an expanded auction site in February to accommodate the increased business it's getting.
The auction site said once oil prices recover, they expect their business to still be good as companies scramble to buy oil equipment rather than sell it.