Singing the Winter Blues
equipment, it takes longer to get started in the morning, and the misery factor is about as high as it gets in this business. Add to this fuel prices going through the roof. Sound familiar?
Most of us experience this most every year and generally plan for it. But there is always at least one guy down the road who is so desperate to keep his rig working that he’ll actually lower his price in these conditions. I’d like to address what he is really doing.
First of all, this practice proves that he doesn’t really know his cost of doing business. If it costs more in time, fuel and labor to drill in the winter, where does he think the difference is going to come from? The supplier won’t lower the price of casing or pumps because some rocket scientist decided to give away his work. The helpers are going to take a dim view of a big pay cut to justify his “winter specials.” The fuel suppliers will laugh him right out the door when he tells them he hasn’t been charging enough to pay the ever-rising fuel costs.
Those are just the direct costs, which are almost always higher in slack times. Another cost that many “get-the-job-at-any-cost” drillers forget about is maintenance and repair. This often is the type of driller who tells himself, “It’s not going to freeze tonight,” and doesn’t bother to drain his mud pump. He’s going to be in for a big surprise when he freezes his fluid end and has to shell out several thousand dollars for a replacement in the middle of a job. Not to mention the fact that he didn’t bother to charge enough money to cover such emergencies. Broke, tired, wet, cold and broken down is not the way to go through life.
Whether he knows it or not, the only place he can cut his price without having the world laugh at him is in his own wages and profit. The customer doesn’t notice this and doesn’t care. The supplier couldn’t care less if he works for free. His hands wouldn’t gripe about their pay near as much if they knew the boss was only taking home half as much as they were. Nobody knows but the driller. He knows he’s losing his butt; he just hopes that times will improve before he goes belly up. This leads to resistance to go back and make the little warranty adjustments that are almost always necessary on a new well, which leads to less-than-happy customers.
Another thing this practice does is train the market. Let me explain. When a driller drills a well for just above the price of materials, puts the fuel on his wife’s credit card and cuts every corner possible just for the privilege of wearing out his rig in miserable conditions, he has trained the customer as to what price to expect. This will come back to bite him next summer when the prices are up and the customer’s brother-in-law needs a well. When he hears the price, he’ll start the usual griping: “You drilled Bubba’s well for a lot less .” Now the driller is forced to match his low-ball winter price in peak season or lose the job.
Guess what – he’ll do it. Now he gets to lose money on another well and train more customers that he’s the cheapest driller in the valley. And he will be. He’ll be so cheap, he won’t be able to afford workman’s comp for his help, or to go to any trade shows and keep up with the new things in the industry, or do anything else that would make his life better. His work will show it, and his customers will know it.
When a customer calls a driller for a well, it’s because he needs a well. It’s not because it’s on sale this week and he may need one later on. Every well drilled at a loss is a loss for the whole industry, not just the jackleg who decided to work for two dollars an hour. In some parts of the country, a well may cost $2,000; in other parts, it may cost $20,000. And people will pay it. The same number of wells will be drilled because that is how many are needed, not because they were a bargain. I’d venture to say that if every driller in the country tripled their prices overnight, there would be just as many wells drilled as there are right now, but we’d all probably eat a little better. Think about this next time the customer wants you to work for nothing.
On a lighter note: My friends and I have been collecting endings to the saying, “You might be a well driller if ...” I started the ball rolling by saying, “You might be a well driller if some of your wife’s undergarments have pipe-dope stains on them.” Dale Felter (Felter Water Wells, Angleton, Texas) told me, “You might be a well driller if you ever ate a sandwich with your gloves on.” If you have other “You might be a well driller if ...” thoughts, e-mail ’em to me (ROCKBIT@compuserve.com). I’ll put them together and try to remember to give you credit.