“Lost year for Oklahoma economy.” Dr. Russell Evans.
While the news turned sour for 172 workers at SandRidge Energy in Oklahoma this week, there was an indication from the Oklahoma Energy Index that its recent contraction had slowed because of some growth in oil and natural gas industry employment and small gains in rig activity.
The Index, a joint project of the Oklahoma Independent Petroleum Association, Bank SNB and the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University showed the smallest contraction based on figures collected in December, 2015. The index of oil and natural gas industry activity fell to 190.4 or a 1.8 percent decline from the previous month’s reading and 25 percent below levels from a year ago. The Energy Index indicated the decrease was buoyed in part by the addition of 1,000 oilfield jobs and a 3.6 percent increase in drilling activity. It was the smallest contraction of the Index since June 2015 when crude oil prices began their free fall from $60 a barrel.
“The challenging headwinds remain unabated,” said Chris Mostek, senior vice president of energy lending for Bank SNB. “While we anticipated slow improvement over the long run, the beginning of 2016 will be difficult for many in the industry.”
That was confirmed with this week’s layoff of 172 workers at SandRidge Energy which combined with layoffs in January at Lariat Services, a SandRidge subsidiary, made for a total of 440 workers let go by the company so far this year.
Dr. Russell Evans, the executive director of the Styeven C. Agee Economic Research and Policy Institute said the long-term forecast for crude oil prices has significant impact for the Energy Index and Oklahoma’s economy as a whole. Oil prices this week ranged from under $30 a barrel to about $35.
“The industry remains in a wait-and-see mode as it heads into what some are appropriately calling a lost year for the industry—and by extension a lost year for the Oklahoma economy at large,” said Evans.
