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Hundreds of North Dakota Oilfield Workers Laid Off

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CORRECTION: Sun Well Services says they have not made any layoffs. Lynn Helms with the Dept. of Mineral Resouces told KX News, Sun Well has been making layoffs, however, the company says that is not true.

2020 was expected to be a tough year for oil prices.

The year started out at $60 a barrel. Today, we’re at $20 a barrel, which the Department of Mineral Resources Director, Lynn Helms said is barely a break-even price.

He told KX News some forecasters say $10 is possible in the very near future.

Helms explained that the global oil market, coupled with the start of the coronavirus spread across the U.S., is putting North Dakota’s oilfield employees out of work in droves.

He said 200 to 300 North Dakota oilfield workers have already been laid off, as a direct result of the coronavirus spread.

“I’ve been either working in this industry, or working as a regulator in the industry, for over 40 years, and this particular price drop is unprecedented,” Helms shared.

He said we won’t even realize the magnitude of it until we get overall rig and completion counts, which is three to six months away.

“We’re anticipating that we’re in this for at least a year, if not two, two and a half years,” Helms added.

He expects a dramatic number of wells will become inactive very quickly, possibly 50 to 60 percent of them, leading to hundreds of more layoffs in the near future

“Out of the 16,000 producing wells, probably 2,000 to 3,000 of those are marginally profitable. And so, they’re not economic at this point,” Helms explained.

Job Service North Dakota told KX News, just last week, 18 percent of all new unemployment insurance benefit claims came from oil and gas workers.

“We saw a fairly big rush of folks coming in yesterday. About 90 percent of people coming through the door in Williston were unemployment-related, and about 90 percent of those were initial filings,” shared Paula Hickel, the Workforce Center Manager at Job Service North Dakota in Williston.

Hickel said many of these layoffs are temporary.

“There’s a lot of question marks there, of if and when things pick back up,” she noted.

“We’re praying for the best, that this is a short term blip, and that we can recover. Fortunately, the budget has been strong over the last few months. We’re at about 100-million dollars over budget right now. So that gives us a good cushion for the next couple of months while we wait and see,” added North Dakota Rep. Josh Boschee.

The Democratic State Representative is referring to the overall state budget. And because of an anti-gifting clause in the state constitution, lawmakers can’t give funds directly to citizens or employers.

“It would be a matter of how do we support the infrastructure throughout the state? Maybe through childcare, healthcare, maybe through delivery services…” Boschee continued.

When we asked if this is a discussion already in the works, he replied, “Right now, we’re waiting for the federal funds to show up.”

Helms said there is a plan in place in case oil companies end up filing for bankruptcy that will not burden the taxpayers.

Helms said those working in natural gas or waste disposal, shouldn’t expect layoffs anytime soon.

If you would like assistance looking for another job, or need to file for unemployment benefits, Job Service is still open.

In the event it closes in the coming weeks, click here to file a claim online.

You can also call the Claim Center with questions about qualifying for unemployment benefits or about filing online. That number is (701) 328-4995.

Hickel said to check your local Job Service’s Facebook page for announcements and closures. And if your local office does close, she promises the phone lines will remain open.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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