Some may refer to it as a “once in generation opportunity” for the state. If you are not aware, over the last several years, major oil and gas companies have been investing billions of dollars in drilling into the Utica and Marcellus Shale formation on the eastern side of state. These formations are said to contain vast amounts of oil, wet, and dry gas.
This post is the first in a series in which I will be taking a deeper look into the impact of this revolution on today’s business. I will also provide real world examples of companies that are experiencing growth because of this new development. Interestingly enough, many of these companies are actually finding ways to adapt their businesses to serve an industry that they have had no association with in the past. So, are you ready?
Why you should care:
As some may believe, this is a growing opportunity for big oil “fat cats” to get little fatter or perhaps a handful of lucky landowners to strike rich from bonus and royalty payments. There is no debating the fact that the Oil and Gas companies are heavily involved to turn a profit. It should come as no surprise that there will be (and will continue to be) many new millionaire landowners in the state benefiting from this as well. Billions of dollars are flowing in at an incredible rate and many businesses stand to benefit.
As a business, how do I get involved?
It is imperative to understand the different phases that will occur overtime; from the initial exploration phase (which we are in now) all of the way through until site abandonment. Within the different phases, it’s important to understand what activities occur as well as the associated needs. Knowing the industry and lingo will help get you acclimated to the culture.
Once you have a better understanding of the industry, it’s a good idea to get your house in order from a sales and marketing perspective.
- Does your web site currently represent your brand well?
- Are you being found in the search engines for terms relating to your products or services?
- Are there any online directories that you can leverage that target the oil and gas industry such as www.shaledirectories.com?
It’s also highly recommended to attend industry tradeshows and events to network and get your name and brand out there to really establish who you are. From a sales and marketing perspective, it is about connecting with your key audience(s) through multiple channels.
Below are few highlights from The Ohio Dept. of Job and Family Services quarterly report that was published in February solely on the oil and gas industry. I found it to be very interesting. The data supports the fact that the Oil and Gas industry is spurring new business growth as well as good paying jobs.
- Employment in core shale industries (pipeline construction and well drilling), increased 15.5% from 2011(Q2) to 2012(Q2) with an average salary $73,070 for these positions.
- Employment in ancillary shale industries (freight trucking and environmental consulting) increased 2.7 percent over the same time period with an average salary $58,981 for these positions.
- State averages for all industries: employment up 1.7%; salary – $43,958
- Between 2011(Q2) and 2012(Q2), 42 core businesses were established in Ohio relating to the well-drilling/extraction operations, pipeline construction and supporting operations.
- There were 6,036 online job postings statewide in core shale and supporting industries in 2012(Q4)
A major point to remember is that employment and wages are far outpacing the state’s current averages compared to all industries in the state. These are good paying jobs which potentially will create employee retention challenges for some companies as demand for talent increases. One example is in North Dakota (Bakken Oil Fields) where Wal-Mart is advertising a starting wage of $17.00 per hour.
My next post will focus on a few specific companies that have benefited from the shale development. I will also provide some insights that you may find helpful as you determine if getting involved is right for your business.
Is your business benefiting from the Marcellus or Utica shale? If so, I’d love to hear about your story.
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