By Erin Ailworth 

Walt Baker graduated from the Colorado School of Mines on Friday with a bachelor's degree in petroleum engineering--but without an oil-industry job.

His employment offers disappeared in December, following a monthslong plunge in oil prices. That is a big disappointment for Mr. Baker and his fellow students, who started their studies amid a drilling boom that provided newly minted engineers with six-figure salaries and signing bonuses.

"We all had the same expectation--we'll all truck through it and then we're going to get the big payoff," said Mr. Baker, age 29, who enrolled in his program in Golden, Colo., after seven years in the U.S. Coast Guard. "Then the downturn happened."

The price of oil is down by more than 40% since June, closing Friday at $59.39 a barrel. Employment at U.S. energy companies has dropped by 6,800 jobs so far this year, according to federal data released Friday, but jobs at energy-services companies have fallen far more, by perhaps 30,000. Graves & Co., a Houston consulting company, says energy employers have announced 120,000 layoffs around the world.

So jobs are scarce for the nearly 1,800 students in the U.S. expected to graduate this year with a bachelor's degree in petroleum engineering.

This is the first major crude-price slump since hydraulic fracturing helped revitalize the U.S. oil industry seven years ago, allowing energy companies to pump oil from dense rock formations cracked open with millions of gallons of water and tons of sand. U.S. crude production jumped from 5 million barrels a day in 2008 to 9.2 million barrels a day in February.

Enrollment in undergraduate U.S. petroleum-engineering programs followed, rocketing from 3,710 students in 2008 to almost 11,400 students this year, according to data collected by Lloyd Heinze, a professor at Texas Tech University in Lubbock.

"There are too many students coming out looking for jobs," Mr. Heinze said. More than three times as many students are graduating with undergraduate petroleum-engineering degrees than in 2008, he added.

Fears about having to replace retiring baby boomers have meant that some companies are still recruiting, according to counselors and professors at Texas A&M University, the University of Oklahoma, and other schools.

But some seniors have had job offers rescinded, while underclassmen are struggling to land internships.

At Texas A&M, senior Jennifer Wisler, a 21-year-old past president of the student chapter of the Society of Petroleum Engineers, said some nervous sophomores are looking to transfer into mechanical engineering, while "I think the junior class is freaking out."

Ms. Wisler, a fourth-generation petroleum engineer, is headed to a job at Chevron Corp.

"Everyone is saying a silent prayer: If my job is still waiting for me, I just have to get there and show them what I am worth," she said.

Those finding jobs are being offered lower salaries and taking nonengineering positions to get a foot in the door, several professors and counselors said.

"The concern, of course, is over the next year or so what the job picture will be like," said Dan Hill, head of the petroleum-engineering department at Texas A&M. "It's not looking too optimistic."

But executives at independent oil producers like Pioneer Natural Resources Co. and Carrizo Oil & Gas Inc. encouraged students to stick it out--perhaps by working as a roughneck or getting a master's degree in business.

"I'd like to see kids come out of school with some business skills, project management," said Brad Fisher, chief operating officer at Carrizo.

Mr. Baker, at the Colorado School of Mines, is taking that advice. He has been accepted into the school's graduate petroleum engineering program.

"I might as well double down," he said. "Who's the world to tell me I can't go into oil and gas?"

Write to Erin Ailworth at Erin.Ailworth@wsj.com

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