Drop in oil and gas prices has a trickle-down effect in Pratt
The impact of a drastic drop in oil prices nationwide has definitely been felt in Pratt County as well as throughout southcentral Kansas.
Pratt oil producers like Ron Prater and Jim Byers said they have been through similar economic circumstances.
“It’s affecting us,” Prater said. “If we hadn’t saved money when times were good, we wouldn’t be able to make it now when times are really hurting.”
With 40 years’ experience in the oil field, Prater said the family business ,Prater Oil and Gas Company, has seen highs and lows.
“I think it will eventually come back,” Prater said.
Jim Byers, who with wife Sue, operates Pratt-based Apollo Energy, agreed.
“We’ll survive, but for the most part small and medium businesses could get crushed,” Byers said. “This is probably the worst we’ve seen. Cost of repairs are still high. We can’t afford to buy electricity or propane to run the pumping units.”
“It was bad last Monday (April 20),” Byers said. “Oil prices dropped to 25 cents a barrel. Just two years ago, it was at $58 a barrel.”
Also on April 20, Bryan Richardson of Winfield posted comments on Facebook regarding his career in the oil industry, saying oil posted on that date at negative $36.75, which in essence meant his family’s business would have to pay a refinery to take their oil.
The glut in the oil market which is crashing crude oil prices to record lows is occurring because major storage facilities are full due to COVID-19 travel restrictions. Americans aren’t commuting to work or taking road trips and commercial planes are grounded, Richardson said.
It’s not only the oil and gas producers who are taking the hit from the oil industry crash, linked to COVID-19.
There’s a domino effect. Other businesses associated with oil and gas production could also face a dismal future.
Roustabouts, plumbers, haulers, parts distributors, and other related-businesses and even restaurants feel the pinch in their pocketbooks.
O’Reilly Auto Parts manager in Pratt Jacob Dill said the store has seen a downturn in oilfield-related business.
“Sales have been drastically lowered,” Dill said.
Jim Woody said that his family’s business, Woody’s Sports Bar and Grill at 418 South Main Street, is also among Pratt businesses financially affected by the COVID-19 restrictions.
“We got a lot of oil field people in here before,” Woody said. “We’re struggling right now.”
The oilfield connection to Woody’s is tied to Jim’s dad, E.J. Woody, who founded the business in 1983 while he was working in the oilfield.
“One of his workers built a derrick out of balsa wood and we still have it on display,” Woody said.
With shelter-at-home restrictions in place because of the coronavirus, Woody said the restaurant business has felt the loss of revenue, with food service being limited to take out or curbside delivery.
“Between the craziness and the oilfield, everything’s gone way down,” Woody said. “Hopefully, that will change next week when stay-at-home restrictions are lifted.”
As for the oil industry, no one can predict what might happen next.