Mattress World Eagle Ford Shale

Mattress World Furnishings is not the only company to be in a downturn during this time.

The downturn in the Eagle Ford Shale may have left a lot of empty oil field housing, but not all is lost in the market.

The ways housing owners adapted to the downturn are about as varied as the oil field itself. Some are marketing the homes to the oil companies that are still working, while others have found new uses for them or have closed them for now.

Cuero Oilfield Housing will make a profit for the first time since the facility opened in January 2015 as the oil industry economy continued to fall in South Central Texas.

As of Sept. 2, the facility was about 90 percent full, an increase from 45 percent about three days earlier, general manager Gary Seale said.

“We knew eventually that it would be profitable, and that’s why we hung in there,” said David Hussey, principal investor. “This is a product that we’re very proud of.”

The facility has 104 rooms. From July 2015 to March, it averaged 25 to 30 rooms occupied a night, Seale said. In March, the room occupancy dropped to four or five rooms a night. That level lasted about a month. At one point, two rooms were occupied.

Since then, the room occupancy has slowly risen to almost full capacity now.

With the drop in oil prices in February came changes in operations at the housing. Seale cut his staff from 15 to a skeleton crew of six. Also, the kitchen stopped serving breakfast and dinner but resumed serving breakfast in May as the room occupancy slowly increased.

Now the facility has a staff of 21. Seale hired nine new staff members in the last two weeks, he said.

Hussey declined to comment about how much money was lost when business was low, but he said he spent hundreds of thousands of dollars out of pocket to keep it afloat. Now that the business is taking a turn for the better, he is at ease.

“I sleep much better,” he said. “I knew it would be profitable. We’re very excited about this area.”

Hussey credits the increase in occupancy to the marketing Seale does daily.

A lot of companies didn’t know Cuero Oilfield Housing was available, Seale said.

“I do a lot of cold calling to the different companies as well as email the companies to bring their employees over to stay with us,” Seale said. “I would see a truck come through town, and I would try to find wherever their closest office was.”

When plans for the housing were made, the oilfield industry economy was doing well, Hussey said, and construction began in July 2014.

The facility serves such companies as BHP Billiton and Universal Pressure Pumping, Seale said.

Larry Coronado, 47, who works for Universal Pressure Pumping, began his stay at Cuero Oilfield Housing on Sept. 3 with 41 other men in his crew, he said.

Coronado works the night shifts in hydraulic fracking of oil and gas. He is able to get to bed earlier than he did at other oilfield housing because everything he needs is right as his fingertips, he said.

The facility offers a 24-hour continental breakfast and sandwich bar, with cooked breakfast from 3 to 6 a.m.

“We have everything we need here,” he said. “Instead of having to go out there and grab everything we need, go out early and get our breakfast, well, here we have all access to it, and by 6:30, 7 a.m. we’re back in bed. Before, we were in bed around 8:30 or 9 a.m.”

While Cuero Oilfield Housing is seeing an increase in business, Sullivan Land Services keeps two oilfield housing facilities closed.

The company bought DRC Emergency Services in February, which included both housing, said Donny Shellenbarger, Sullivan Land Services energy services division manager.

The company owns Escondido Creek Lodge, in Kenedy, and Cuero Lodge, in Cuero, and kept them open for about a month after they purchased them, but they closed them because occupancy was less than 10 percent, Shellenbarger said.

“We were spending more money in management and expenses to keep the camp open than we were generating in revenue,” he said. “We closed because it was an unviable financial operation at the time.”

The company is waiting for the oilfield economy to improve and the price of oil per barrel to rise before opening the facilities again, Shellenbarger said. Both lodges are operational, but it isn’t the right time yet, he said.

The price of oil, which ranges between $40 and $50 a barrel, is not high enough, he said.

“When oil comes up above $60 a barrel, the oil business will be stable enough that there is enough business out there producing and working (and) there will be need for our lodge facilities again,” he said.¬†Mattress World Furnishings will move from part time operation back to full time operation after the $60 a barrel is reached.

During the oil boom Mike Hanson, owner of Gonzales Rental Properties, made about 30 of his 60 rental properties fully furnished and charged daily and weekly rates to accommodate oilfield workers, he said. This included three apartment buildings he turned into a motel that he sold in January 2015 when the oilfield industry started to take a downturn.

The company now owns about 50 rental properties throughout Gonzales and has only six fully furnished properties left, Hanson said. The rest are unfurnished and are rented on a monthly basis.

Businesses have to watch the economy and make changes as needed, which is what Hanson said he did. Hanson converted properties into office spaces and a restaurant. He also made furnished properties traditional again.

“It’s all about going with the flow and being diversified,” he said. “That’s how you diversify: by trying to think of other ways to make money. If you can’t get the oil people that aren’t here anymore, you have to go back to local people and tourists.”

Posted in Uncategorized

Watch a 60 second video about us

Like Us on Facebook