The well servicing industry gets it going and coming. They’re all the time going out to new wellsites during this drilling boom, and they’re always coming back to their mainstays–the producing wells–to keep the crude flowing.
By Hanaba Munn Welch
The steadiest, surest income from the exploration for the earth’s riches characteristically comes to companies that offer support services.
Conrnelius Vanderbilt profited greatly from the California Gold Rush by establishing the fastest steamship route to take prospectors from the East to California. For derricks and railroad cars, the steel required to support the oil business developed by John D. Rockefeller increased the wealth of fellow mogul Andrew Carnegie.
Booms are the best times, but the work for service industries tends not to go away.
In the oilfield, well servicing companies do best when the pace is fast and furious, but even in down times, when rig counts drop, the work of pumping oil and flowing gas doesn’t cease. Day in, day out, it’s the bread and butter of the well service industry.
“Everything’s going real well right now,” said Robert Reyes, president of operations at Lucky Services in Hobbs, New Mexico.
Lucky for Lucky, the upturn in the industry has meant more work than usual. About half the company’s 22 rigs are currently in use at completion sites. “We don’t know how long it’s going to last,” Reyes said, reflecting the wisdom of the ages when it comes to booms.
Servicing producing wells is the other side of the business—the kind of work that even now is keeping the other half of Lucky’s rigs in use.
Kennie Bomar is operations manager for J&L Well Service, a company owned by Endeavor Energy Resources in Midland. “We just work strictly for Endeavor,” Bomar said. “We’re working. We stay busy. It looks like we’re going to be busy.”
But Bomar, like Reyes, knows the current level of work isn’t guaranteed. “I’ve seen a bust or two in my life,” he said, referring to his 35 years in the business.
That he’s stayed in through thick and thin speaks to the lasting aspects of the service side of the industry.
Kerry Robinson of Permian Services Company in Midland has been in the well servicing business since 1979, giving him the same outlook as the seasoned Bomar. “I was young and fresh out of high school,” he said.
An uncle, who’d spent some time in the business, advised Robinson that the well service business would be a good career. “I just wanted to make some money,” Robinson said.
He went to work on a pulling unit, and he’s stayed with the work. The difference now is that he owns part of the company he works for. His own background naturally makes it easy for him to relate to his employees. “I try to know all my employees by name,” he said. “We’ve got 80 now. It’s getting kind of hard.”
It’s the nature of good times—more work. “New well completions and old well workovers is what we do a lot,” Robinson said. “Nowadays we’re doing more new well completions than old well workovers. Horizontal drilling has really helped the service industry.”
Permian Services has yards in Midland and San Angelo with a fleet that includes 15 rigs and five kill trucks. “The mainstay of the business is production work,” Robinson said. “You’re still going to have to fix all the existing wells.”
So, the lasting effect of a boom means more work in the long run, even if and when drilling slows.
From Robinson’s point of view, finding good employees isn’t hard. It helps that the work pays well. “There’s a lot of available hands right now,” he said. “The well service end is making real good money right now. They get to go home every night, or most nights.”
In some ways it’s like trucking—short-haul work compared to the more glamorous coast-to-coast runs. Workover rigs are always part of the oilfield scene—part of what it takes to keep producing wells producing. Rigs for exploration aren’t the only beacons to light up the night sky.
In the same way Robinson tries to know his employees on a one-to-one basis, Permian depends on personal relationships to keep the business strong. Robinson likes to think it’s an aspect of the business that gives smaller companies like his an edge. “We develop good relationships with our customers,” Robinson said. “They’re our customers, but they’re also our friends.”
Not every well service company services producing wells. Some depend strictly on exploration. Fracturing horizontal wells, for instance, has spawned companies that supply the water.
John LaForge, president of JWL Well Services, knows his company’s fortunes are tied strictly to the water supply business. For now, things are going a full tilt.
“As busy as ever right now,” LaForge said.
Elements of the business change rapidly when it comes to supplying water for the big frac jobs—even down to how to spell frac(k). “For sure it’s always changing,” LaForge said. “It’s always on the move.”
What to do if things slow down?
“That’s a good question,” LaForge said. “If we could look in our crystal balls to know when that boom was going to be over…”
For now, LaForge and others like him are taking advantage of the opportunity to meet one of the most challenging aspects of the current scene—supplying huge amounts of fresh water to pump into the ground in the middle of a drought.
“Most of our water comes from Lake Ivie,” he said, referring to a reservoir in Coleman, Concho, and Runnels counties. “Lake Ivie is way low.”
Water wells are also a source. “We have a lot of water wells that service the Midland-Odessa area,” LaForge said.
But in a time when water tables are dropping and so are surface water levels, LaForge is hoping for technological breakthroughs. “It’s going to be the end of the oilfield industry if we don’t have some new technology to use brackish water,” he said.
Meanwhile, JWL Well Services is focused entirely on keeping up with the boom and the continuing need for the water that keeps things happening. “It’s going to be good while it lasts,” LaForge said. “It’s labor-intensive. The equipment’s expensive. It has its rewards, and it has its down sides.”
A boom in rain would fix most of LaForge’s primary concerns. It’s not in his crystal ball.
At some point in the future, some of today’s water supply companies and other specialized service companies may expand or make the transition to servicing producing wells—more mundane work but steadier.
At the other end of the service spectrum are the major well servicing companies—Basic Energy Services, Key Energy, and Nabors, to alphabetically name three prominent in the Permian. Their services run the gamut.
The slogan at Basic is “Our Life’s Work Is the Life of the Well.” Based in Fort Worth, Basic offers fluid service, pumping services, rental and fishing tools, contract drilling, wireline, and snubbing services.
Key, based in Houston, offers a similar list of services: rigs, rentals, coiled tubing, fluid management, fishing, oilfield services, enhanced oilfield technologies. Key utilizes a Permian Basin facility to refurbish old equipment and build new equipment.
Nabors, based in Bermuda, is a drilling contractor with operations around the world. In North America, the company also offers well stimulation, coiled tubing, cementing, wireline, workover and well servicing, fluids management, and special services.