A total of 226 Lariat Services employees were laid off Wednesday in Cherokee and Alva, a SandRidge Energy Inc. spokesman said.
Lariat, a subsidiary of SandRidge, provides solutions for exploration and production companies located in Oklahoma and Kansas, according to its website. Services include drilling, roustabouts, pulling units, equipment rentals, trucking and construction services.
“The decision to close a significant portion of Lariat Services was a difficult, but necessary one, driven by the unprecedented environment currently facing our entire industry,” said David A Kimmel, director of communication for SandRidge. “While the performance of the Lariat employees in the face of extremely difficult circumstances has been exceptional, significantly lower drilling budgets and associated well counts across the sector have created an unsustainable market for Lariat’s operations.”
The price of oil fell to $30.51 a barrel on Tuesday, marking its lowest level in 12 years. Before dropping in the summer of 2014, it sold for roughly $100 a barrel for almost four years.
Some predict oil could drop into the $20 range or lower.
SandRidge, an Oklahoma-based oil and gas exploration company, was delisted from the New York Stock Exchange last week when its stock price hit 15 cents a share.
Employees in Cherokee and Alva were notified of the layoffs this morning, Kimmel said.
“We’re shutting down most of the Lariat Services Group,” Kimmel said. “That affects 226 employees in Cherokee and Alva. It does not affect our SandRidge personnel. It’s our Lariat subsidiary. The Flare Group, the Rentals Group and the Electrical Group will remain operational.”
Meanwhile, the Oklahoma Corporation Commission and SandRidge are trying to settle a disposal well fight.
On Dec. 3, the OCC issued a voluntary directive to a dozen energy companies following a swarm of earthquakes the Cherokee and Medford, including a 4.7-magnitude earthquake. The companies were asked to shut down, lower volumes or remain aware of future actions at 140 saltwater disposal wells.
If a settlement isn't reached, OCC spokesman Matt Skinner said officials will ask to modify the company's existing saltwater disposal permits in Alfalfa and Grant counties.
In an statement, Kimmel said SandRidge is committed to addressing the issue.
“From the beginning, our contact with the Oklahoma Corporation Commission has been frequent and collaborative, and that continues throughout this process," Kimmel said. "We are committed to addressing this issue and we continue to work in good faith with them to determine appropriate actions that are both responsible and based on science.”