Recent Permian Basin lay-offs trigger unpaid overtime questions

The largest oil and gas play in Texas is experiencing a decline in fracking operations causing oilfield companies to lay off its employees. As reported by Reuters, (see article here) oilfield service company Superior Energy Services, Inc. cut 112 jobs from its Pumpco unit in West Texas due to the slower activity in the Permian Basin. Superior also had to cut its hydraulic fracturing unit due to the decrease in activity, which was followed by another oilfield company, Basic Energy Services, who had to sell most of its hydraulic fracturing equipment. Hydraulic fracturing is the process of using high-powered pumps to force sand, water and other chemicals underground to release trapped oil and gas. Pumpco had about 13 fracking units with an estimated 650,000 hydraulic horsepower while Basic had about 11 units with 500,00 hydraulic horsepower.

Oilfield service companies have been struck with weak oil and gas prices with investors shifting their focus to shareholder returns. The drilling programs have declined, which has led to weak fracking operations. Anadarko Basin, which spans Oklahoma and parts of Texas, is expected to fall by 12,000 barrels per day and the Eagle Ford Shale in South Texas is also expected to suffer a decline in production. 

The employment rate in the Permian basin has also fallen by 400 through the first ten months of this year, which is a drastic change from the 16,700 jobs that were added in the same time period last year. Fracking crews have also fallen off, creating a 21% decrease in these workers for this year, whereas, in 2018, frac crews in West Texas and New Mexico expanded 1.3%. 

With many layoffs comes the question of whether employers are following federal labor laws, including any back wages former or current employees are entitled to. If you are an oilfield worker who has recently been laid off and have questions regarding whether you received your overtime or back wages, consider speaking with an attorney today. Josh Borsellino is a Texas attorney that understands the rules and regulations of the federal labor law statute, the Fair Labor Standards Act. He offers free consultations and can be reached at 817.908.9861 or 432.242.7118. 

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