In the middle of the hot Permian oil and gas play, a trucking company is closing some operations

A trucking company is shutting down a facility in the middle of the red-hot Permian basin, but it isn’t clear what led to the closure.

Product & Logistics Services LLC, known as P&LS and a subsidiary of Schlumberger, filed a notice during the week of May 6 with the Texas Workforce Commission that it is closing its operations in Monahans, Texas. Monahans is about 35 miles west of Odessa, which along with Midland, are the two city centers of the Permian Basin. The number of jobs it listed as disappearing because of layoffs was 124.

The closure is expected to be permanent, according to the WARN letter sent by P&LS to the Texas Workforce Commission last week. Layoffs will take place between July 6 and July 19, the letter said.

There are signs of a slowdown in drilling activity. The Baker Hughes rig count for the Permian Basin was most recent at 457 after being up to 493 in November 2018. It’s down slightly from a year ago. The chart below from SONAR shows the pace of new drilling applications in the state of Texas.

But John Rojas, the director of the driver training program at Del Mar Community College in Corpus Christi who gets drivers ready for the types of jobs that have been in heavy demand in the Permian and other basins, said his program has not seen a downturn. “They’re still sending plenty of students to us because demand is still strong,” he told FreightWaves. The students in the school’s course are in class or training six days a week for four weeks before being ready to receive their Commercial Drivers’ License.

Rojas said he was not familiar with any factors that might have led to the P&LS closure nor had he heard of similar closures. Most oil patch trucking companies working the Permian Basin are between 20 and 100 trucks, he said, with generally a 1:1 ratio of trucks to employees.