Midlanders recall tough times and ruined fortunes after a promising oil boom turned sour more than three decades ago.
Major oil corporations shut down and shipped out, businesses called it quits and banks failed as the demand for oil dried up in the 1980s. The nationwide oil glut left Midland in the dust.
West Texas oilman Tim Leach was just a 20-something kid out of college back then.
“We were too stupid to be afraid,” he said with a laugh.
Now Leach is on the top rung of the corporate ladder as chief executive officer of Midland-based Concho Resources, one of the state’s top oil and gas producers.
He’s also on the favorable side of a boom and bust cycle, with lofty goals of doubling production in the next three years.
But Leach will need boots on the ground to do it — a problem many of Midland’s largest employers face these days with a 2.8 percent unemployment rate.
The reality of that figure — the lowest in Texas and tied with Logan, Utah, and Bismarck, N.D., for the lowest in the nation, according to the Bureau of Labor Statistics — was clear at a recent career fair, where most of the job seekers were already employed.
About 50 companies filled the Horseshoe Arena on a chilly day in early February hoping to lock down prospective workers. Those who took the bait wore work boots and heavy tan jackets.
“Employers are going after what’s called the passive job seekers — the people who are already employed but looking,” said Kim de la Pena, Eventures Career Fairs general manager, who estimated that between 550 and 700 people registered for the February fair.
About 76 percent of workers surveyed by Express Employment Professionals reported being open to new opportunities or actively looking for a new job, according to local recruiter Samantha Clark.
“That’s over three-quarters of employees who are ready and willing to change jobs,” Clark said.
At Concho, recruiting and retaining quality workers means creating an environment where people want to work, Leach said.
And if the oilman hopes to see 50 rigs on the horizon in the next two years — 26 more than he has today — the company must continue to offer the competitive advantage, whether it’s a significant benefits package or in-house medical services for employees and their families.
“We’re just starting to scratch the surface on how big a company you can build here,” Leach said. “The oil and gas resources are here. It’s really a question of, can you get the people here?”
INSIDE THE OIL PATCH
Traveling down Illinois Avenue in downtown Midland, it’s hard to miss Concho’s headquarters. The center’s green glass shimmers in the sun and stands out among other Tall City buildings.
During an interview in a scenic conference room, Leach shared the story of how the multibillion-dollar company began. It’s almost hard to believe that Concho started on a card table in 1997.
“Those were the exciting days,” the Texas A&M Aggie said. “Those mornings where you wake up and break out in sweat because you know you have people counting on you.”
The complete startup took place in 2004, and after a decade in the industry, Concho has become the sixth largest oil producer in the state of Texas and the largest in New Mexico.
“The game has changed,” Leach said. “It’s not so easy to be a small company anymore like it used to be when we started.”
That’s because of a shift to horizontal drilling, said Leach, who explained that running an energy operation with several drilling rigs requires lots of people and lots of permits.
“It’s like a giant logistical problem,” he said.
But horizontal drilling is more economical, and capital-efficient, and Leach said it allows operators to get oil and gas out of the ground “at rates and with economics that we’ve never seen before.”
That means Concho — which doubled its head count in the past three years — needs even more people.
Concho plans on adding between 150 to 250 employees a year to double production, according to numbers provided by Scott Kidwell, Concho’s director of government and public affairs.
“We have a lot of jobs rotating in,” said Kidwell, noting Concho has hired nearly 20 new workers each month so far this year.
There were 221 new hires last year, including field workers, accountants, managers, information technology staff, analysts, attorneys, engineers, geologists, petrophysicists, geophysicists, land managers, administrative and support staff, technicians, field supervisors and officers, according to the numbers. Concho is still in need of geoscientists.
One notable trend is the number of young people pouring into the energy business, Leach said.
“If you look at the demographic at Concho, there’s 50 and older and then there’s 30 and younger,” he said. “We have a lot of young people, and that’s really a good thing. You can feel the energy around the building.”
Some of those young workers grew up in Midland and pledged never to return.
“Before you know it, they are married and back here working,” Leach said. “It’s in your blood.”
Concho’s college intern program also helps to plant an early seed. The company had 43 interns last year, and Kidwell said nearly all come back to work for Concho after college.
“We give them real responsible jobs and a mentor who works with them,” Leach said. “We need to get them up to speed as quickly as possible.”
TAPPING HOMEGROWN TALENT
In some ways, the Midland oil and gas industry markets itself.
The most recent Bureau of Economic Analysis report shows that last year Midland was first among the nation’s metropolitan areas for per capita income. There’s money to be made in the oil patch, and a flood of workers — some with years of experience — are ripe for the picking.
That’s what happened at Bold Energy III, an independent exploration and production company.
The first Bold started with 10 employees, grew to 14 in its second generation and now has 23 on staff, said Peggy Worthington, a founding partner who now serves as business development manager.
Unlike some companies with aggressive recruitment campaigns, the majority of Bold’s employees made the first move, Worthington said in mid-February from her simple yet scenic office in downtown Midland.
“Bold’s management team targeted specific skill sets in its recruiting efforts and has been very fortunate over the last eight years in attracting professionals with an entrepreneurial spirit,” Worthington said. “The majority of Bold’s staff have made significant personal investments in the company. A dollar spent or a risk taken impacts virtually every member of Bold’s staff.”
Bold has a seasoned team of landmen, engineers, superintendents, geologists and accountants. More than half of Bold’s staff are 20- to 30-year veterans in the oil and gas business.
“I don’t know (if) you’re going to find — anywhere you look — a more seasoned group than you would find here in the Permian Basin,” Worthington said.
The 61-year-old talks with a soft, pleasant Southern accent, but her experience in the oil and gas industry speaks for itself.
Worthington got her start in East Texas, first handling minerals for a Dallas attorney before landing a job at ARCO and moving to Midland in 1989. A decade later, she took a risk and formed Sundial Resources, which she ultimately sold.
Not afraid of failure, she worked for another oil and gas company before joining Bold Energy in 2004. Last year, Worthington was recognized by the American Association of Professional Landmen for her work as a senior landman.
“My mother instilled in me that there were no limits, but I had to do the hard work,” she told the Reporter-Telegram last year after receiving the award.
For all of Worthington’s years in the business, West Texas has proven to be tough training ground — mostly because of divided ownership of land and minerals, she said.
“Land is like a layer cake in that each formation has unique ownership and pooling problems. From the many years I have worked as a landman, the Permian horizontal play has by far been the most exciting and challenging,” Worthington said.
But it’s the challenges and growth potential that keep Bold employees on the payroll, she said.
“I believe that in today’s Permian job market, the thing that allows people to be happy in their job is new challenges and training,” she said. “Being bored in a job is one of the main reasons employees look to other opportunities.”
Lack of recognition and growth opportunities, too much stress and work-life imbalance are to blame for a drop in job satisfaction, according to the survey by Express Employment Professionals, which also teamed up with CareerBuilder, Gallup and Ernst & Young.
Job dissatisfaction leads to greater turnover, which can cost a company 50 to 150 percent of the lost position’s salary, Clark said.
“When employees leave, it costs the businesses productivity and loss of knowledge, and it adds stress to remaining staff members,” she said. “Not to mention what it costs to replace the employee in hiring and training expense and time.”
Concho retains its workers by creating a culture people want to be a part of, said Leach, noting the company also tries to maintain a good reputation and invest in the community.
“Companies have character,” he said. “They reflect the people who work there.”
On this day, employees on the bottom floor of One Concho Center rushed to a room with gifts and diapers to what appeared to be a baby shower. Tickers in the elevators shared the company’s stock prices — stock ownership is one perk of working at Concho.
In addition to a comprehensive benefits package, the company offers an in-house doctor and nurse for employees and their families. Leach said Concho eventually will build a day care center.
“Those kinds of things you really have to do to distinguish your company from other companies,” Leach said. “That’s our strategy. We wanted to use that as a competitive advantage to get people to work for us.”
A week before Leach and Kidwell met with the Reporter-Telegram, Concho sponsored Big Brothers Big Sisters of Midland’s annual Bowl for Kids’ Sake fundraiser.
Community service and philanthropy were part of Leach’s original vision for the company. After the 1980s bust, Leach said the need for a corporate leader emerged. He wants Concho to have the positive impact on Midland that Devon Energy and Chesapeake Energy have on Oklahoma City.
That’s when Kidwell pointed out Leach’s favorite community outreach event: Concho’s annual Christmas party.
“When you know the company you work for cares about what you’re doing in the community and cares about your family, it’s fun to come to work,” Kidwell said.
One of the first booths greeting visitors to February’s Eventures Career Fair was a 20-foot exhibit from the oilfield chemical solutions company XChem, a subsidiary of Irving-based NCH Corp.
The booth featured giant posters of oilfield technology, and company recruiters offered passersby a taste of what it’s like to work as a hydraulic fracturing technician, delivery driver or manager.
Friendly yet focused, Alan Madden, X-Chem’s director of human resources, was on the hunt that day to hire 30 employees to add to the 500 companywide.
“Our biggest challenge in this market is finding enough people to fill the openings we’ve had,” Madden said. “We have a lot of competitors here, and we’re all competing for the same people.”
Across the arena, job seekers waited in two- to three-person-deep lines just to speak to a recruiter at a company that offered similar oilfield services.
People from all ages, walks of life, experience levels and employment statuses stopped at the X-Chem booth to inquire specifically about the oil and gas industry, Madden said.
“It’s interesting, and it’s growing very rapidly — they want to be a part of that,” he said. “They want to see a long-term career opportunity.”
The Express Employment Professionals survey indicated only 17 percent of hiring managers say job seekers have the necessary skills.
But lack of training isn’t a problem for X-Chem, which offers a monthlong paid training program.
“We really give you the resources to learn the position you’ve been hired for,” said Madden, noting it’s sometimes better to train a new person than break a seasoned worker of bad habits.
No matter the level of expertise, Madden said X-Chem must offer competitive salaries to keep up with the market.
“If a driver makes $18 (an hour) at a competitor, we may offer them $20,” he said. “When you’re 22, and you make $4 or $5 more an hour, that’s a lot. It catches their attention.”
Still, it’s hard to hire locally. About 40 of XChem’s employees commute from the Dallas-Fort Worth area each month; they work two weeks in the Permian Basin and have one week off back home in the Metroplex, Madden said.
“They are definitely getting a lot of pavement time,” he said.
Referral bonuses might help with the recruiting process, but finding housing is a challenge if new hires aren’t already living in Midland-Odessa.
“We try to help with housing assistance — just to get them going,” Madden said. “The problem is they can’t find anything affordable once that ends.”
Finding housing for new employees isn’t much of a problem for Concho Resources or Bold Energy, which typically tap into Midland talent.
Still, Leach said the company does help with housing until new recruits find or build proper housing — which is available but still costly.
“There’s kind of a sticker shock of what you get and what you have to pay for,” he said.
Madden agreed: Employees who relocate to the Permian Basin get less bang for their buck compared to other Texas markets.
The same goes for hotels. Two years ago, Madden paid $115 for a hotel room in Midland. The room rate at the same hotel goes for $250 these days, and the cheapest he found during this trip was $185 a night.
Like hotels, new housing developments are being built, but Madden said not all employees can afford to pay that much.
“If someone is a driver making $22 an hour, they can’t afford a $400,000 house,” he said.
OUTSIDE THE OIL PATCH
Offering his version of a saying once uttered by West Texas oilman Clayton Williams, Bill Kent said that he didn’t go broke during the 1980s bust, but he sure got bent.
Kent’s father, E. L. “Buck” Kent, got the family into the gasoline business in the 1950s while his older brothers ran convenience stores and quick-lube businesses.
After returning to Midland during the good times, the 27-year-old set his sights on taking over The Kent Cos. and asked his father to give him a chance.
“He didn’t think I could do it,” he said with a laugh.
It took the youngest sibling a year to put the plan in place, but Kent eventually bought the family business from his father with high hopes of accelerating growth.
Everything changed when the bust hit. The young Kent watched as banks and other businesses failed.
“It was hanging on with bloody fingernails for about 10 to 15 years,” he said.
But he held on and today owns multiple umbrella companies, including Kent Kwik convenience stores, Avis Lube, Mr. Payroll Check Cashing and a Baskin-Robbins franchise.
Kent recalled how the lean times taught him invaluable lessons.
“I had this vision to have good people,” he said. “We weren’t going to be as big as our competitors. We weren’t going to be as financially strong as our competitors at that time. But we certainly could try to out-operate them.”
Friendlier people and better service — it’s a vision Kent took to the bank, and it’s a vision that has paid off.
The company struggles just as much to find quality workers as other non-oil and gas businesses in the Permian Basin, but Kent prides himself on never lowering his standards of employment.
In September 2013, the company took out an advertisement in the Reporter-Telegram that read: “I don’t usually apply for jobs, but when I do, it’s for Kent Kwik. (And then I usually fail my drug test.)”
At the time, Kent said the ad was designed to underscore the company’s drug-free environment.
“I’ve heard people say, ‘Man, it’s so tough I’ve considered dropping drug testing or drug screening.’ We refuse to do that,” Kent said.
But while visiting with Kent and his human resources department, it was clear the company also had a good sense of humor. Kent was loud and funny, and his employees weren’t afraid to speak up and joke with him.
“We’re fun,” said Kent’s assistant, Meredith Bright, who noted the drug screening ad was meant to show the company’s creative atmosphere. “If you’re just honest with people and make it funny, you get more people.”
Last year, the Kent Cos. — which had about 800 employees in 2012 — spent more than $1 million in the Permian Basin on getting workers in the door. Kent made it clear that his company will grow despite current hiring struggles.
“We can’t let the fear of trying to attract people prevent us from running a business,” he said. “When you get stagnant in your growth, your people don’t have much of a career path. We want our people to grow, and the only way to get that opportunity is to keep growing the businesses.”
The company pays fair wages, but Mary Lou Holt, Kent’s human resources director, said it’s hard to compete with oilfield salaries.
“We don’t intend to match oil companies, because we can’t,” she said.
Incentives include offering part-time health benefits and flexible schedules for families. The company also rents apartments to secure housing for workers, but Kent said it’s expensive to provide those benefits for entry-level employees.
Training is also a top priority at Kent, and there’s a Kent Kwik training store next to its headquarters on Big Spring Street that allows new recruits to get hands-on experience.
Rather than “throwing them into the deep end after two or three days,” Kent said workers have time to understand how the process works. He hopes new hires are trained well enough to run a shift on their own after working in the fake store.
“It’s a high-cost model — an expensive approach. But we believe it pays dividends,” Kent said.
Costs continue to go up each year for recruitment, which Kent called a “moving target.”
“We have thrown a lot of money at it,” he said. “I don’t see how anyone operates out of West Texas with it being anything but a high-cost business.”
TREATING PEOPLE WELL
At the February career fair, another convenience store chain offered visitors a chance to “earn their stripes” as an assistant manager.
Stripes Convenience Stores has dozens of locations in the Midland-Odessa area, and recruiter Melissa Gonzalez traveled from Corpus Christi to hire 15 people for the new assistant manager positions.
“We just need the assistant general managers to help with busy stores the oil industry has created,” she said. “We want the money, but we need help.”
Employees have plenty of opportunity to move up the corporate ladder at the family-owned business, she said. But it can be hard getting them in the door, and the housing shortage makes it difficult to recruit from outside the area.
“We had the opportunity to relocate people from all over the United States, but it became a challenge to find housing for them,” Gonzalez said, noting two-month relocation packages fell flat after hiring 10 general managers last year.
Still, nearly all of the general managers recruited last year in Odessa are still there and thriving, she said.
“It’s a 100 percent success,” Gonzalez said.
The housing bubble is also costing Lithia Auto Stores qualified mechanics, according to company recruiters.
Lithia can train and certify workers, but many leave because they can’t afford to live here, said Melissa Gaston, Lithia’s personnel coordinator.
The car dealership has four stores in Odessa and three in Midland. Salesmen and saleswomen are given a salary for the first six months but work off commission and incentives after that, said Heather Hernandez, talent acquisition and development lead.
There’s an opportunity to make good money, but it’s a challenge to compete with oilfield wages.
“And sometimes, not everyone is a salesperson,” Hernandez said.
Other company recruiters at the job fair found unique ways to attract workers.
Craigslist advertisements tend to work for Aaron’s stores in Midland and Odessa, said Esther Aranza, associate resources recruiter. And despite
lower employment numbers in West Texas, applications are still pouring into the Texas Department of Public Safety because it’s a state agency.
A corporate recruiter for Bobby Cox Cos., which own Rosa’s Cafe, Taco Villa and Texas Burger locations in the area, said a good work environment is key to keeping workers — even in high-stress restaurant jobs.
“It’s how you treat them and what kind of benefits you have,” said Susan Belmore.
Kent couldn’t agree more. The president wants to create a fun, family atmosphere.
“It’s important for us and always has been to have people who feel like they belong to something more than just a job,” he said, noting he hires people for careers, not jobs.
Treating people well goes a long way, he said.
“You have to give back to your people. They are the ones busting their tails to make you money and having to deal with all of the challenges that our business has,” Kent said. “You need to find ways to take care of them.”