Delaware Basin: vacancy rate and unemployment rate in West Texas

[Vilas Tulachan]

I wanted to hear from folks in the West Texas region regarding the RV parks vacancy and unemployment rate with the current oil price being so low. I'm evaluating at a RV Park purchase and they claim it's 100% occupied and since it is in Delaware basin it's not affected by the current oil price but won't share the current P&L until I get it under contract. So I'm interested in getting some actual feedback from the ground since I'm out of state. Thanks!

-- pvt

[Greg H.]

To say they are not affected by the downturn in oil prices is ridiculous.  While there are still projects going on that were funded prior to the downturn, new projects are not being funded.   In many cases, the oil companies have rented these lots for 1-2 years at a time and eventually those agreements will expire and occupancy will drop dramatically.  I would be very very conservative in considering any project in West Texas at this time.  Many of the smaller communities go up and down based on the price of oil.