In the 13 years since his company, now known as CUDD Energy Services, was bought by a much larger holding company, Clint Walker has presided over a ten-fold increase in CUDD’s income statement.
He’s a bootstraps-type oil and gas pro who keeps a hand in the cattle ranching trade and still finds time to pull duty as a board member and area vice president for the Permian Basin Petroleum Association. Clint Walker is an innovator and trailblazer who is leading a Permian-area service company to new heights.
“We’re not a small company, we’re not a big company, but we do have some size to us,” said Walker, executive vice president and general manager of CUDD Energy Services, Inc., and PBPA board member. CUDD, owned by Atlanta-based holding company RPC, Inc., has a market capitalization of $3.2 billion, making it indeed a significant player in oilfield services worldwide.
Walker has been with CUDD since the company bought out his previous firm, Freemyer Technical Services, in May of 2000. At that time, RPC’s market cap was just under $300 million, which means Walker has watched the company grow to more than ten times the size it had been when he came on board.
Also at that time, RPC had zero revenue from pumping services, Walker said. Today that segment constitutes more than half of RPC’s revenue. Total hydraulic horsepower is just over 700,000, with its single largest presence in the Permian Basin.
Walker’s friend Mark Gully, engineering manager at Midland-based ExL Petroleum, holds the oilman in high regard. “He’s a top hand both in how he runs his company and how he handles himself on a personal level,” Gully said. “He would be the first to stop on the road and help you change your tire if you were in need. Clint is a very laid-back individual. Everything is going a million miles an hour in his head, but you don’t get that perception when you are standing there talking to him. He’s nice and relaxed. And he says what he means.
“There are a lot of wheels turning up there contantly,” Gully added. “He has brought CUDD up to a standard that a lot of companies would envy.”
Gully has known Walker for well over a decade, going back to a time when Gully was employed at a Permian-area operator and Walker was with an acidizing company. The two did some business together, and “he never let me down,” Gully said.
Shortly after those days, Walker was brought into the RPC culture and into the saddle at CUDD, with all of its challenges and its progressive ways. Managing its explosive growth has been Walker’s main focus. “That’s one of the challenges I have. A growing, public company—the entrepreneurship and the creativity that has gotten us this far, within the bounds of becoming a large, public company—trying to balance that out,” he said.
Keeping layers of management simple and direct have helped him do that, while keeping people in action in the field. “I do not like meetings and I do not like bureaucracy, so I minimize both,” he explained.
J. Purvis, a friend of Walker’s for more than 25 years, described Walker as someone with a strong moral compass.
“Over the years, I’ve seen him work on projects, and the first thing he wants to know is who is involved, and what kind of character does that person (or people) have,” said Purvis, an independent oil and gas operator (Reatta Energy, Inc., in Midland). “He is someone who is going to look at all corners of a deal, but he is going to focus first on the character of the people he is doing business with.”
CUDD is a company that can make use of that kind of leader, because the company deals with a great many individuals, and in farflung locales. They have a presence in offshore fields near New Zealand, western Africa, the Gulf of Mexico, and the Gulf of Alaska, among others. Domestically, CUDD is in all the major plays, including the Bakken, Marcellus, Eagle Ford, and, of course, the Permian Basin. Onshore, there are international ventures in China, West Africa, Argentina, New Zealand, and Australia, among others. Even with all the international locations, Walker has noted that overseas business accounts for only about 4-5 percent of the company’s revenue.
U.S. business has been revolutionized by the advent of horizontal drilling, Walker said. Previously, “We’d go out to a well and complete a 300-foot vertical section, and we’d be done in the afternoon, doing perforating, acidizing, and fracturing.” Now, horizontal wells are 10,000 feet laterals and the net pay is far beyond the 300-foot length.
“Now, instead of having 400,000 pounds of sand, you have 6 million pounds of sand,” he said. “It’s gone from a one-afternoon job to an all-week-long job,” he said. The amounts of gel, sand, personnel, and equipment are up extensively compared to before. He noted that last year’s figures showed about 23 percent of the wells CUDD completed were horizontal, whereas so far this year that slice of the pie has jumped to 38 percent. While all this is an opportunity for more revenue, it also requires a huge investment in equipment and manpower.
Keeping the equipment up and running at that breakneck pace involves regular maintenance and capital expenditure to buy more. In answer to a client’s question, he recently estimated the dollar value of equipment on a site as somewhere between $45-50 million. He arrived at that by multiplying $1,500 per hydraulic horsepower, a number he called “conservative,” with the site’s total of 30,000 hydraulic horsepower for an average completion.
To keep up, CUDD has budgeted $190 million for maintenance, $90 million of which will go toward pump refurbishment.
In 2010 CUDD spent extensive money on buying more equipment, which has not had to be repeated since then. But, said Walker, because the company maintains “a healthy balance sheet,” they recently had the opportunity to buy 30,000 hydraulic horsepower in equipment from a manufacturer at a huge discount when the company that had ordered the equipment was unable to take delivery. CUDD paid cash for the equipment. “It was primed and just waiting for somebody’s colors to go on it,” Walker said.
Finding, training and keeping the people needed to run such huge machinery is a challenge in good or bad economic times, said Walker, but CUDD has had some success by thinking outside the geographical box. Walker said they have recruited new workers from depressed areas in the farm and rust belts.
After recruiting, he said, the company goes a step further in training in order to keep them on board. “Once a person shows potential, he or she, then we put them through one of our training courses.” This involves “a couple of ex-army guys,” Walker related, who teach weeklong leadership classes. Team-building is part of the process, along with public speaking, basic accounting, an engineering curriculum, and other basics. All training is done internally so the subject matter can be customized.
This training comes into full fruition on the well site. “You think about what you’re doing out there, you’ve got a supervisor that’s on location, and he has $40-50 million worth of your assets, and he is controlling what now is the major cost of a well—that’s the completion phase. He has anywhere from 30-40 people on location that he’s supervising, he’s interacting with the engineers, the customer, and all the other service companies that are on location, so he’s got to be able to do a multitude of different things. What we’re trying to do is to give him the tools so he can succeed.”
The idea is to give employees the training they need to succeed, a track that benefits both CUDD and each person.
Expounding on his philosophy, he continued, “You can paint this iron any color you want to paint it. But if you don’t have the right folks out there running it, it will get in the ditch every single time.” He punctuated the last three words for emphasis.
He stresses with all employees that each of them is a financial steward of the stockholders and of themselves and their families. In line with the idea of taking ownership, certain levels of managers are evaluated based on return on invested capital. “It’s not subjective, it is what it is,” he said.
With that grading system, Walker said he in turn gives the employees ownership of the job, so they can make good decisions—part of which ability comes from the extensive training programs. They have the authority to make decisions quickly at the well site where, in Walker’s words, the core philosophy is, “Do what the well tells you to do.” He added that the CUDD employee is not only a steward of his own company’s resources, but of those of the client as well.
The focus on customer service and satisfaction leads Walker to tell his people that it’s more important to treat the well properly than to sell CUDD brand name chemicals.
Treating employees as humans also involves concern for their safety. Walker said that when he is asked what keeps him up at night, his reply is, “The health and safety of my employees that I work with every day.”
The business can be done safely, he said, but the huge machinery, the large number of moving parts, and the fact that third parties are in the picture can make safety challenging on a daily basis.
PBPA Involvement
It may seem unusual for a service company to be a member—and for its
GM to be a board member—of an association geared toward producers, Walker noted. “A service company historically has not had the influence within a lot of the oil and gas trade organizations, except to advertise or be a sponsor.” Walker told previous PBPA Chairman Doug Robison that he wanted to get involved because service companies have the same issues at stake as the producers, especially with the advent of hydraulic fracturing as a completion procedure.
“Who would’ve thought ‘frac’ would be the next four-letter dirty word?” Walker joked. “A lot of things that we have taken for granted over the years within our industry, the general public has a lack of education about that.”
Both producers and service companies rely on the PBPA to do that educating of both the general public and legislators. “I would encourage all the service providers to get involved in the PBPA and get their voice heard,” he continued.
The local-ness of the PBPA is part of its strength, Walker feels. “I don’t want to take anything from the national organizations, but it seems to me that we’ve had our greatest influence on the local level.” Walker congratulated the organization on its major influence on the 2013 Texas Legislature. “I think we did a lot of good work down there,” he said. Educating the legislators and supporting them with industry knowledge was the PBPA’s major accomplishment.
For Walker, part of the education process includes pointing out how many jobs the oil industry creates not just in this area, but elsewhere. Much of the machinery used comes from Michigan, Wisconsin, Ohio, and other states in the rust belt, which could be even rustier were it not for the oil boom.