Alice, TX Oil and Gas Business Loans: Field Equipment, Crew Payroll and Operator Invoices

An oilfield service crew is paid every week or two, while an operator may pay for the work only after a field ticket is signed, an invoice is sent and its payment terms run out. A few things the company can write down before a call set the size of that payroll gap:

• Crew size and the payroll total for each pay period
• The days from finished work to signed field ticket to invoice
• Each operator's payment terms, and how long its invoices have actually taken to pay
• How many paydays fall inside the wait: a 60-day wait with a biweekly payroll holds 4 or 5

A wait that comes back with every job fits a business line of credit drawn on payday and paid down when the operator pays. A single long wait on one large job may fit a working capital loan instead; the working capital page works a crew payroll through with invented numbers.

Illustration only, invented figures: an Alice, TX oilfield service company buys two light towers at $11,420 each, an $18,960 generator and an $11,480 hydrotest pump, an invented $53,280 of its own equipment. Over 48 months at a 10.25% annual rate, the equipment loan payment is $1,357.72 a month; the 48 invented payments total $65,170.56, and $11,890.56 of that is interest.

Light towers, generators and test pumps are trailer-mounted or skid-mounted machines that move from site to site, so each has a serial number and a value a partner can check. The invented case puts all four on one equipment loan; a partner may also write them as separate loans with different terms.

Each of the 48 invented payments can be set against the field tickets the four machines are billed on in a month.

A used generator, pump or pressure unit can cost much less than a new one, and a partner may still lend against it when its condition can be shown. For pressure equipment, the papers differ from those for a yard machine:

• Pressure test certificates for the pump, hoses and fittings
• Calibration dates on gauges and recorders
• Engine hours on the power unit, and any rebuild
• Who owned the unit before, and proof that any lien on it was released

A partner may set a shorter term on an older unit or ask for more of the price up front. A unit bought at auction may come with fewer records, and the company can order an independent inspection before the sale closes.

Illustration only, invented figures: a Jim Wells County, TX oilfield service company adds two crew pickups at $45,730 each, an invented $91,460, to carry its own crews and tools to the sites it works on. Over 60 months at a 9.7% annual rate the loan comes to $1,929.78 a month; 60 invented payments make $115,786.80 in all, and $24,326.80 of it is the cost of borrowing.

Pickups that carry a company's own crew and tools are work vehicles, and a partner may value them like other equipment, by year, mileage and the price on the dealer's quote. The two invented pickups could also sit on separate loans, so the second one is added only when a second crew starts.

Support activities for oil and gas operations (NAICS 213112) covers companies that work on a contract or fee basis for oil and gas operations. County Business Patterns counted 54 such employer establishments in Jim Wells County, TX in 2023, and 14 of them, 25.9%, had fewer than five employees.

The wider mining, quarrying, and oil and gas extraction sector had 62 employer establishments and 1,479 paid employees in the county that year.

Counted by street address instead of by county, ZIP Code 78332 held 42 employer establishments under the same code in 2023 (ZIP Code Business Patterns).

Nonemployer Statistics, a separate count of businesses with no paid employees, listed 63 support activities for mining businesses (NAICS 21311) in Jim Wells County, TX for 2024. That broader code also takes in support work for mining outside oil and gas.

Oilfield service bills differ in how long they last, and each can fit a different product:

Illustration only, invented figures: a rental tool invoice of $12,815 is due before the operator pays for the job the tools were used on. On a credit line at a 13.55% annual rate, the invented draw stays out for 52 days and carries $247.38 of interest.