When oil prices began to fall rapidly in the last half of 2014, the impact was quickly felt in all of SPE’s programs. Our magazines were affected first by a reduction in advertising as companies reduced their marketing budgets. Training course attendance was next as companies cut back training and travel. Conference and workshop participation declined as travel was constrained, and technical programs for conferences were affected as authors were unable to present their papers. Participation in exhibitions held up for a while as many companies honored commitments that had already been made, but subsequent rebooking of exhibits declined. It quickly became apparent that all of SPE’s main programs were going to be suppressed as long as prices remained low and would likely trail the recovery of prices on the way out of the downturn.
Understanding that SPE could not continue to operate in a business-as-usual fashion, the Board of Directors and senior staff began examining the impact to SPE and options for adjusting operations to the downturn. SPE is very fortunate to have financial reserves to smooth the impacts of the economic fluctuations common to our industry. During the years of high prices, we were able to build a reserve fund and invest it to see us through harder times. As it became clear that the industry was facing a “lower for longer” situation, we recognized that we needed to adjust our operations to fit industry conditions....
SPE: Weathering the Downturn
Steve Byrne, Chief Financial Officer, Society of Petroleum Engineers
01 June 2017