Last summer, crude oil prices plummeted. In response, the number of rig counts fell, and analysts are fiercely debating how low prices will go, for how long and to what degree production should be altered. For landmen and other industry professionals, the external impacts are less important than continuing to receive steady work. Luckily, there are a few good ways to save money during the temporary drop in oil prices that does not include temporary layoffs.
1.) Increase Efficiency.
Online courthouse indexes provide databases that allow landmen to perform research on attributes that are often found in-house. Mapping software has made plotting land tracts in notoriously difficult areas (East Texas, for example), quick and efficient, severely slashing times needed to run titles. CourthouseDirect.com not only provides these resources, but local and regional advice too.
The idea is to get ahead of time-consuming tasks before they drain your landmen’s time. Many county courthouses avoid software and technology investments. Some are financially penalized for attempting to update electronically because the manpower required to digitize records will set the court back. When a county courthouse lacks digital resources, a old-fashioned phone call can jumpstart paperwork and save your landman a day or two in hotel costs.
2.) Leverage Technology.
Technology has shaped the role of landmen across all companies in the oil industry. Communication is cheaper and faster than travel, and when the weather gets bad or an emergency requires necessary attention, agents can coordinate solutions across hundreds of miles. Instead of laying off your landmen, have them work from home whenever possible. Transportation costs, food and accommodations can cost thousands per trip.
Updating your accounting codes can add specificity to complex tasks. If your company is handling a six-figure job, the last thing you want is your accountants and engineers trying to understand what happened to a budget overage in a report of poorly-tracked expenses.
3.) Reduce Travel Expenses.
Travel bills can add up fast. Landmen and quality inspectors alone can cost a land business tens of thousands of dollars a year in travel costs. When preparing for travel expenses, there are several helpful ways to alleviate financial stress.
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Travel by train when possible. Trains are more reliable in times of inclement weather, and you are less likely to be late for a meeting. Trains are cheaper and have more comfortable seats and leg room than a coach flight.
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Utilize travel rewards. There are a host of corporate credit cards associated with hotel chains, airports, car rental services and meals. Use them so employees can build points, score free meals and receive reimbursements on flight costs.
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Travel agents. The internet still has not replaced travel agents in terms of financial savings. Corporate travel companies can bundle trips and provide deals due to special contracts between their business and transportation services.
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Shop around. While personal relationships may guide business in times of economic security, new partnerships often include deals that could save you money annually.
The lag in oil production may still be underway, but the cyclical nature of the industry shows promise for the future. Until then, utilizing resources and cutting back expenses can help save precious assets to your company.
