BISMARCK, N.D. – Facebook Founder and CEO Mark Zuckerberg visited the Bakken yesterday and had the opportunity to tour an oil rig near Williston, N.D. During the two hour tour, Zuckerberg visited with oil and gas employees and learned about the industry’s advancements in technology, safety and opportunity.

“It was a tremendous opportunity and a lot of fun to provide a Bakken drilling rig tour for Mark Zuckerberg as part of his visit America tour,” said Ron Ness, President of the North Dakota Petroleum Council. “He had more questions than we had time in our two hours at the rig, and he took the time to meet and visit with many of the employees and learn about their jobs and experiences in North Dakota.”

The tour was organized by the North Dakota Petroleum Council with help from Statoil, Nabors Drilling and Neset Consulting Service as part of Zuckerberg’s plan to visit all 50 states. During the tour, Zuckerberg had a candid conversation with rig crew members about working in the industry, how the industry in North Dakota has afforded them opportunity they could not find at home, as well as how safety has grown tremendously along with technological advancement to enhance rather than replace their jobs.

“Regardless of your views on energy, I think you’ll find the community around this fascinating,” Zuckerberg wrote in a Facebook post early Wednesday morning. “Many people I talked to here acknowledged (climate change), but also feel a sense of pride that their work contributes to serving real needs we all have every day – keeping our homes warm, getting to work, feeding us and more.”

“This was an amazing opportunity to share information with a technology leader,” said Ness. “He now had a much broader grasp of our industry.”

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About the North Dakota Petroleum Council
Since 1952, the Petroleum Council has been the primary voice of the oil and gas industry in North Dakota. The Petroleum Council represents more than 500 companies involved in all aspects of the oil and gas industry, including oil and gas production, refining, pipeline, mineral leasing, consulting, legal work, and oil field service activities in North Dakota, South Dakota, and the Rocky Mountain Region. For more information, go to www.ndoil.org.

Media Contact: Tessa Sandstrom, Communications Manager  |  ND Petroleum Council
701.223.6380, tsandstrom@ndoil.org

“Economic Contributions” of the Oil and Gas Industry in 2013” Infographic 2013-Economic-Impactv2-1 2013-Economic-Impactv2-2

Bismarck, N.D. – The oil and gas industry has seen its economic output rise by 750 percent to $43 billion since 2005, according to a study conducted by the North Dakota State University’s Department of Agribusiness and Applied Economics. The study also found that the industry directly supported 55,137 full time equivalent jobs and supported another 26,403 secondary full-time jobs. This increase represents the growing importance oil and gas development has on the state’s overall economic health.

“This study helps confirm that the petroleum industry is one of the largest basic-sector industries in North Dakota,” said Dean Bangsund, co-author of the study and research scientist for the department at NDSU. “Although activity is concentrated in the western part of the state, the magnitude of the contributions to both the state and local governments and the sheer volume of secondary economic effects in nearly all sectors of the North Dakota economy would suggest that the economic effects of the industry are felt statewide.”

Because the industry relies on hundreds of contractors and subcontractors, the economic contributions extend beyond the mining and extraction industries. According to the study, retail trade once again saw the largest impact, taking in $11.3 billion of the $43 billion. Households, or personal income, saw the second-largest impact at $9.3 billion, and the Finance, Insurance and Real Estate industry ($4.5 billion) overtook the government ($4.4 billion), which was the third-largest beneficiary in 2011. More than six other industries in North Dakota also benefitted from oil and gas development.

“The positive impacts of oil and gas development extend far beyond just the energy industry, and benefit many of our small and independent businesses in the oil patch and across the state,” said Rae Ann Kelsch, state director of the North Dakota chapter of the National Federation of Independent Business. “This is great news, but what is perhaps more exciting for our organization and members is the fact that the $43 billion only represents 48 percent of the total economic output. That means there is a demand for services within the state that our members can begin taking a look at and capitalizing upon to keep even more of those dollars here in our state.”

Among the study’s key findings:

· The oil and gas industry generated $43 billion for North Dakota’s Economy: In 2013, direct impacts of the oil and gas industry were $17 billion and secondary impacts were $25.7 billion for a total of $43 billion in business activity. For every dollar spent in the state by the oil and gas industry, another $1.43 in additional business activity was generated.

· The oil and gas industry created more than 80,000 jobs statewide: The study reveals that the oil and gas industry’s economic importance to the state includes direct employment for 55,137 full-time jobs and secondary employment of 26,403 full-time equivalent jobs.

· The industry contributed $9.3 billion in economy-wide personal income: The study reveals that the oil and gas industry contributed $9.3 billion in economy-wide personal income, including $1.425 billion in in-state private royalties and $300 million in lease bonuses. This is a 382 percent increase since 2005.

· The oil and gas industry generated $4.4 billion in government revenues: According to the study, the oil and gas industry generated a total of $4.4 billion in government revenues, including:
o $2.9 billion in gross production and severance taxes;
o $654 million in royalties, including $304 million in state royalties, $349 million in federal royalties, including tribal royalties;
o $49.6 million in state lease bonuses, and $4.1 million in federal lease bonuses that were returned to the state;
o $62.6 million in direct sales and use taxes;
o $50.5 million in corporate and personal income taxes;
o $54.6 million in licenses, permits, and fees;
o $12.5 million in charitable donations;
o $322.3 million in indirect state government general tax collections.

· The oil and gas industry supported $28.5 billion in non-industry business activity: The oil and gas industry benefited other industries and sectors statewide, including $11.3 billion in statewide retail sales; $4.5 billion in finance, insurance and real estate; $2.8 billion in business and personal services; $2.3 billion in communications and public utilities; $2.2 billion in professional and social services; $1.8 billion in construction; $1.5 billion in other sectors (various ag and mining); $1.3 billion in manufacturing; and, $838 million in transportation.

The North Dakota Petroleum Council (NDPC) has commissioned the study each biennium since 2005, and economic benefits have risen dramatically. Economic impacts have grown by 750 percent since the first study in 2005. State and local government revenues grew by more than $3.73 billion—or 1,150 percent—since 2005, while industry-wide direct employment grew by 992 percent from 5,051 in 2005 to 56,137 in 2013.

“We’ve seen a dramatic growth in production, and along with it, a dramatic growth in the economic contributions and associated job creation,” said Ron Ness, president of the NDPC. “Obviously, as prices decrease, the benefits previously enjoyed by the state government, households and other industries will be much lower as we work through the current price drop – no doubt impacts many are beginning to feel. We must be cautious to not further hinder these positive economic impacts through onerous or unnecessary regulation.”

The study was conducted by research scientist Dean Bangsund and Dr. Nancy Hodur, Research Assistant Professor at the NDSU Department of Agribusiness and Applied Economics. Bangsund and Hodur surveyed firms engaged in exploration and development, extraction and production, transportation, and processing of crude oil and natural gas. Data that was measured in this study but not included in previous surveys was an assessment of capital expenditures for infrastructure projects. To view the full study, visit http://ageconsearch.umn.edu/.

ATTACHMENT: “Economic Contributions” of the Oil and Gas Industry in 2013” Infographic

Since 1952, the Petroleum Council has been the primary voice of the oil and gas industry in North Dakota. The Petroleum Council represents more than 500 companies involved in all aspects of the oil and gas industry, including oil and gas production, refining, pipeline, mineral leasing, consulting, legal work, and oil field service activities in North Dakota, South Dakota, and the Rocky Mountain Region. For more information, go to www.ndoil.org.

Media Contact:
Tessa Sandstrom
Communications Manager
ND Petroleum Council
701.223.6380
tsandstrom@ndoil.org

Listen to what Mr. Hannity had to say about energy and North Dakota by viewing the clip here. Then, be sure to attend WBPC on May 22 to hear his thoughts first hand!

‘Energy Is Our Answer’: Hannity on ‘Get America Back to Work’ Campaign

Sean Hannity was on “America’s News Headquarters” today to discuss his “Get America Back to Work” campaign, where he teams up with companies in oil-rich states to get Americans employed.

A few years ago on his radio show, Hannity said that if he was unemployed, he would pack his bags and go to North Dakota, where he would beg an oil executive to hire him.

His message spread, months went by, and Hannity said he got about 20 calls from people who said they took his advice, moved to North Dakota, found jobs, paid off debt, bought houses and more.

That’s when Hannity and his team began to approach companies in North Dakota, Louisiana and Texas in order to get Americans back to work.

“Energy is our answer – it could literally transform the American economy […] it is the single greatest resource we have,” he said, stressing that he has been “blessed beyond measure” and that it kills him to see the middle class being held hostage.

“I identify with them because that’s where I came from,” he said of America’s middle class.

“People are suffering needlessly and government policies are literally an impediment to their life, their success, their opportunity to buy a nice house in a safe neighborhood, get a nice car, send their kids to a nice school. All of this is government getting in the way. I say bypass ‘em, they’re all a bunch of idiots,” he said.

 

By: Chris Sutton
Picture taken by Kyle Jerome. Derrickhand with Sun Well Service in North Dakota

BOBJ - Picture of oil derricks in the Bakken 12-10-13

The nature of the energy industry can bring frequent changes resulting in professionals reentering the work seeking world.  Some of these changes are beneficial for oil and gas companies.  For example, acquisitions and divestitures (A&D’s) are a part of the asset allocation strategy for oil and gas companies and are constantly evaluated on both a short and long-term basis.

Operators look for assets where geological knowledge of formations is available, and where technical expertise in specific plays can be leveraged for higher margin recovery. Companies divest assets to raise funding for existing asset development or to acquire new assets more closely aligned with long-term strategic goals.

In a survey conducted by Ernst & Young, when Oil & Gas companies were asked to disclose the main causes for an acquisition, the majority of the respondents listed their top two reasons were to gain shares in existing markets and gain shares in new markets.

BOBJ - Ernst and Young Survey Graph 12-10-13

Although A&D’s are typically beneficial, they can still impact the workforce on either side of the transaction.  Other workforce changes are less beneficial – but still somewhat common in the volatile oil industry.  For example, if an exploration and production company loses a major project, they will likely have to downsize their workforce by laying off the contractors hired for that project.

Of course, downsizing also occurs for other reasons, such as shifting resources internally and changing company goals.  Following are some common scenarios for professionals during company changes, as well as tips for preparing to reenter the workforce.

What do workforce changes mean for oil and gas professionals?

When a company divests an asset, several things can happen to a professional’s job position.  Often, the professional will be asked to move with the assets to the acquiring company.  Moving to the new company sometimes means relocating, so some professionals will turn down the offer and start by searching for a new job in their area.  The divesting company usually encourages current employees to go to the new company if they have the option, because they will be laid off if they stay.  Higher-level employees may have the option to accept a retirement package instead of relocating.

In other situations, some professionals might be told the asset is being sold and they’re not being offered a new position at the acquiring company.  These professionals are often laid off because they are no longer being used on a project.  This scenario is similar to E&P companies losing a major project –some contractors may be asked to join another project or assignment, but usually there isn’t enough work available to avoid downsizing.

What should oil and gas professionals do?

Because the scenarios above are commonplace in the oil and gas industry, professionals in this field should always be ready with a plan of action.  Luckily, in the case of A&D’s, professionals are usually given several months of notice before a company divests the asset  at which they work and they will know shortly afterwards whether or not they will get an offer from the acquiring company.

Unfortunately, many people don’t start looking for a job until after transitioning out of their role.  And in the case of Exploration & Production (E&P) oil companies losing a project, or other downsizing scenarios, professionals may even have less time to ready for a change in employment.  This causes laid off and retired employees to enter the job searching market at once including those who do not accept an offer from the acquiring company as well as professionals from the acquiring company who quit.  Competition for jobs will be fierce and offered pay may be lower.  Our first tip is to begin looking for a job as soon as you know you’ll need one.

Our second tip is to check location.  Location can be a deal breaker for professionals who are offered a position at the acquiring company.  If you get an offer from the acquiring company, find out if they require relocation.  Do some research into the area and decide early whether or not you are willing to move and find affordable housing.

Thirdly, professionals with a lot of experience should consider taking the exit offer and reentering the workforce as a highly compensated, knowledge-based consultant.  Taking a retirement offer doesn’t necessarily mean the end of your career.

Lastly, it’s important to continuously network with industry professionals and get to know about projects in your area. This way you will be able to forge meaningful relationships with contacts that can get you in front of hiring managers.  Information gained from networking can lead to an easier job transition during a company downsizing or similar situations.

Preparation makes for an easier transition.

Workforce changes are inevitable in the oil and gas industry, and most professionals who work on oil production will switch companies at least once during their career.  Preparing for this transition can make finding a new job easier and might even result in a higher paycheck.  You can prepare for any possible layoff by learning about companies involved in deals affecting you and by networking with industry professionals, who may be willing to help you quickly transition to a new project.

Good luck and good hunting.

Chris Sutton is a Partner at Clover Global Solutions, LP.  He can be contacted at: Chris.S@clovergs.com

 

 

Written by Janelle Holden

In December 2012, 5.19 Sales & Marketing connected communities in Eastern Montana with business leaders looking to launch a first-of-its-kind housing project for oil and gas workers in the Bakken region.

With the guidance of the Eastern Montana Impact Coalition (EMIC) and the commitment of IAP Worldwide Services (IAP), the Eagles Landing Housing Community Project was born.

WP_20130728_002-wJust nine months later Sidney, Montana is now home to phase one of Eagles Landing, a state-of-the-art housing facility that includes 339 beds, private rooms, chef-prepared meals, free daily breakfast, a commercial grade laundry facility, housekeeping services, fitness center, 24-hour security and ample parking.

In this interview, Troy Selland of 5.19 Sales & Marketing shares lessons learned from the project and the secret to creating successful business ventures in the Bakken region.

Janelle: “So Troy, how did this project get started?”
Last December, I flew into Wolf Point, Montana with senior leaders from IAP to meet with EMIC executives. With over 60 years of expertise in remote site operations, IAP was looking for a community in the Bakken region in which to build and operate a multi-million dollar workforce housing community.

We toured six sites across Montana and North Dakota. All of them were potentially a good fit for a large-scale project, but the company was impressed by the opportunities that existed in Montana and how the EMIC represented the region.

Janelle: “Who is IAP Worldwide Services and why were they interested in building?”
IAP specializes in providing temporary housing solutions in remote locations around the world. It’s a company that has the capability to build specialized housing solutions in virtually any environment around the world. In the past, they have worked primarily with government agencies and were looking to expand into the private sector.

Janelle: “I’ve heard that Montana has had trouble in the past winning contracts like these. Is that true and if so, what made the difference here?
Montana has historically lost out on similar opportunities to other oil states such as North Dakota and Texas and the field was open to IAP to build anywhere in the world.

In early 2012, EMIC formed to address community challenges in the Bakken region and they welcomed IAP into the community. The coalition wanted to help solve a regional housing shortage that was persistent, challenging and frustrating.

When they met, the coalition members spoke with one clear voice about their visions, challenges and hopes for a region that is roughly the size of the state of New York.  This made the difference with IAP as it was clear that an opportunity truly did exist for them in Montana.

Janelle: This project was built in record time and it seems like everyone in the community has been happy with the result. How did that happen?
Good communication and great partners. The coalition worked with the company to ensure that every phase of design, planning and construction would address and resolve the community’s concerns and fit with Montana culture.

As a result, Eagles Landing has become home to more than just oil and gas industry personnel. Current and future residents include county employees, policemen, electricians, and even families.

Janelle: What have you learned about doing business from this project?
When I look at the history of this project, I’m proud of Montana for finding a creative way to work with businesses and solve community challenges in the Bakken. The real secret to the success of the project was combining the visionaries of IAP with the local members of the EMIC. Including community input via the coalition and building local support is the secret for businesses looking for long-term success in Montana’s Bakken region.

Troy-Selland_5.19Sales&Marketing-cropTroy Selland is the Founder of 5.19 Sales & Marketing, based in Livingston, Montana. He has over fifteen years of leadership and consulting experience in the commercial airline, ground logistics, and oil and gas sectors. 5.19 Sales and Marketing helps firms of vision find their place, and ultimate success, in today’s unconventional energy industry.

For More Information: 5.19 Sales & Marketing: www.five-nineteen.com
Eagles Landing Project: www.iapeagleslanding.com
EMIC: www.gndc.org/EMIC%20page.htm