The oil and gas industry is making a strong recovery from the downturn and an indication of the bounce back is the uptick in salaries, according to CSI Recruiting’s 2018 E&P Salary Report.

The salaries, particularly for engineers, are not quite as strong as they once were, but CSI Recruiting’s president, Jeff Bush, said the numbers are moving in the right direction. CSI Recruiting polled 2,900 professionals in the U.S. who are currently employed in full-time, salaried positions within E&P operators.

For the skill sets of reservoir engineers, drilling engineers, production/operations engineers and engineering technicians/analysts, the overall average salaries improved from 2017 in all but drilling engineers.

Bush, however, said the major win for the industry at this point is not in the higher salaries but in the increased number of people who are back to work after being laid off or displaced following the 2015 downturn.

“The big takeaway is that while salaries still haven’t gone up in a huge way, the biggest benefit is we are just seeing more and more people getting back to work,” Bush said. “This downturn hit a lot of people hard so it’s encouraging to see that folks are getting back into full-time positions, folks are getting rehired whereas they have been sitting on the sidelines for a good deal of time.

“While that doesn’t necessarily mean that everybody is getting paid top dollar, it does mean that a lot of folks are back to work.”

Based on first quarter numbers, the 2018 E&P Salary Report determined the average salary of a reservoir engineer to be $190,344. For a drilling engineer, the average salary is $178,022. A production/operations engineer has a salary of $179,812, and an engineering technician is being paid an average salary of $101,140.

The data collected showed a nearly 3% overall base salary increase of all skill sets, which includes engineering, geoscience and land. The increases in overall salary were also in the 3% range in 2017.

Only drilling engineers took a slight step back from an average of $179,901 in base salary in 2017 to $178,022 this year.

While there weren’t the 7% to 10% increases in average salary for any of the skill sets, Bush said his company did find a significant increase in the number of respondents to the voluntary survey and many of them were veteran workers who have been rehired in this recovery period.

Bush believes that if the current industry uptick continues the salaries will be even higher because that is when companies will poach experienced employees and compete for younger workers.

“We are going to need to see another 12 months of kind of good times before you start to see salaries really start to pick up at all because right now, while there is hiring going on, the companies are still very much in control of this labor market,” he said. “We are definitely at the point where folks are getting into bidding wars over guys or that kind of thing because we are still kind of in the early days of recovery here.”

What is interesting is the continued emergence of engineering technician/analyst positions. While there has been some fluctuation in most engineering areas since the downturn, the numbers in the report indicate not only did the technicians remain at work during the downturn, but also their salaries continued to improve.

The overall average base salary has jumped about $3,000 each year since 2016 while veterans of 11 to 20 years and 31-plus years saw significant increases in salary during that same period. Technicians with 11 to 20 years of experience are making an average salary of $107,515 while 31-plus-year veterans have an average base salary of $126,772..

“As you might imagine, when you have a downturn where nobody is doing any drilling and if you are a drilling engineer you are going to take it on the chin,” Bush said. “That’s what happened in a lot of circumstance.

“Where that engineering technician skill set has sort of bucked the trend; that has really become sort of a financial analysis skill set,” he continued. “It just sort of follows that even in a downturn you want to know what you’ve got and what it’s worth. Even though things aren’t great you are still going to want to have a solid understanding of the economics of the assets that you have so you are willing to pay for somebody of a premium skillset to do that analysis. Whereas, if you have a drilling program that you are not doing anymore then you don’t need to have a great drilling engineer. You don’t use that.”

Terrance Harris can be reached at tharris@hartenergy.com.

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