… but someone’s got to create the footprint, build the approach roads, and do all the other site work that must happen before the “real work” gets started. Dirt work is elemental in the Permian Basin.
By Paul Wiseman
They may not move Heaven—although it may seem like it sometimes—but they do move lots of earth to prepare Permian Basin sites for wells, frac ponds, and even wind turbines.
Independent companies like R. R. Huffman Contracting lay the groundwork for operators large and small to drill and produce the hidden minerals. Sometimes that situation leads to panic on the part of the producer, says Ron Huffman, the company’s founder and president.
“There’s only so many of us around that can do this,” said Huffman. “Then they [producers] get in a panic situation and they bring in people from other areas” to do the work, and those companies may not be familiar with the unique conditions in the Permian Basin. “The terrain, the climate, everything else is different here from anywhere else in the world.
“It resembles a sandy beach and a hard rock, all at the same time,” Huffman said.
Demands made on any dirt company, local or imported, can be over the top. Many times the operator will have contracts with drillers and others who, when they have finished one location, need to move to the next location or the operator will owe them money for simply waiting around, if the dirt contractor hasn’t finished the next location in time.
“We’re the easiest ones to push around,” Huffman said, because dirt companies are paid by the job, not on a contract basis. So operators tend to want big jobs done in a big hurry.
For imported dirt companies unfamiliar with the sand and the rock, it can be a challenge to learn the terrain quickly enough to do the job on time and to specifications.
E&P companies often tell Huffman, “We’re going to end up paying $25,000 a day if we don’t have a place for this drilling rig to go. You [Huffman] are telling us it’s going to take 7-9 days to make this pad. We’ve only got four. We’ve got to get this done now,” they will insist, according to Huffman.
Even for experienced local dirt companies, short lead times can bring difficulties. One of the ironies Huffman observes lies in changes in the nature of the pads themselves.
In the old days, “Your locations, generally, were there from 9 to 21 days, that was it,” while drilling one vertical well. “That’s all it had to last. Now, you’re having to keep a rig on a hole for sometimes up to six months,” Huffman said. To make a pad last longer, greater care must be taken in the preparation.
“Number one, if the material in the area won’t satisfy the requirements, you have to go outside that area, sometimes up to 20 miles, to get decent materials to build it out of,” he said, citing the need for caliche in particular. Some caliche washed out or blows away before the six month period is up.
Just the materials transportation issue can cause a job that would have cost $50,000 to cost $250,000, he said.
Another issue is the size of the multi-well pads. “The size of their footprints gets bigger—and bigger—and bigger. They have as many as eight mobile homes on one location now for people to stay in.” There is also space for safety people, pipe racks, multiple spots for the drilling rig and more. “These locations are huge, and when they leave, they are one solid half mile to drive the circumference of.”
Business has yet to slow down for B&N Contractors, says the company’s Permian Operations Manager, Michael Sneed, noting, “We’ve been very lucky.” When asked if that meant most of their clients were still drilling, he answered, “Today….”
The company is busy enough to have looked into subbing out some of their work to other, less busy contractors.
B&N is headquartered in Haynesville, Louisiana. Sneed is at the company’s Pecos, Texas, office, which was established in 2011. In addition to drilling pads, they do other dirt work, including pipelines and more.
Sneed would like to add about 10 people to his workforce, whose current count is about 100. It’s a shortage that he says has pretty much been a constant since 2011. The challenge, as always, is not just to find people, but to find qualified and reliable people—and those with a commitment to safety.
Concerns about commitment to safety have caused Sneed to avoid hiring a number of otherwise seemingly qualified people—but sometimes those high safety standards have actually brought people his way.
“I have a couple of really good guys I’ve hired out here, who came to work for me strictly because where they were working at before was hiring [just] anybody, which made these guys not feel safe where they were working,” he said. The men contacted B&N because they had heard of the company’s safety record.
Of the 100 employees, Sneed says about 25 or so have been with the company for 10 years or more, while the rest average much less, a more or less normal situation in boom times.
The presence of those long-timers has allowed the company to avoid the high cost of using GPS technology in the grading process, although they were actually among the first to use another tool, laser technology. “We’ve had the laser equipment for a year longer than most everybody else has, and the GPS stuff, we’ve veered away from that a little bit,” he said. While they did use GPS, he noted, “We probably won’t do much more of it,” not because it doesn’t produce good dirt work, but because his experienced people “can essentially do the same job without the GPS—so we save a couple hundred thousand dollars per machine by using something other than GPS.” With about 90 “pieces of iron,” as he refers to the machinery, that would be quite significant savings.
Still, Sneed listed hiring as a top concern, noting that only a handful of his employees are from Pecos or elsewhere in the Basin. “I have four people who are local to Pecos and 5-6 guys who are are local to Ft. Stockton. Outside of those 10 people, the closest to here anybody is from is 250 miles. Most of my guys are from over 700 miles away.”
This speaks as much about the lack of jobs elsewhere as it does about their availability in the Permian Basin.
Since they can’t drive 700 miles to and from work in a day, those distant employees work 7-day shifts. While on shift they live either in man camps, in rented trailers, or in their own trailer. The company also rents 12 offsite trailer houses and, “We’re building a yard to put our own trailer houses on—we finally figured out it [the housing shortage] was going to be here for a long time—after eight years I figured I’d give in. We have about 20 guys in RVs,” along with a rent house and the aforementioned personal RVs.
Some of their clients have parked trailers on pad sites to allow workers to stay there overnight instead of driving extended stretches of dangerous highways after a long day’s work, which Sneed says he greatly appreciates. Much of B&N’s work is around Orla and Mentone, tiny towns in Loving County, a county which counts only a few dozen permanent residents on its census.
Sneed himself used to live in Pecos, but found rent in Midland was half of what he paid in Pecos, so he moved to Midland and found it cheaper to drive a 200 mile round trip every day than to live in Pecos.
Being situated at one end of one of the most crowded stretches of highway in America—U.S. 285 between Pecos and Carlsbad, N.M.—has presented other challenges. The road is being widened, with work expected to be finished in 2020. In the meantime, as with any road project, it gets worse before it gets better.
With equipment that is 1-2 feet wider than the narrow construction lanes, Sneed’s crews have to take long detours to move from one site to another—sometimes traveling 200 miles or more for a 15-mile net relocation. Sneed says they spend a lot of time on the phone with TXDOT planning workable routes.
B&N is committed to its future in Pecos, with plans to build a new yard, training facilities, and more living quarters for its employees. The goal is twofold—to make the company more attractive to good employees and to give back to the community, Sneed said. Right after they opened the Pecos office in 2011, Sneed said the Pecos community was hesitant to embrace them, fearing they would be another company that left as soon as there was a downturn. “After the people here decided we weren’t leaving,” they embraced B&N with open arms.
In boom times, the moving of dirt—while not easy—is the least of a company’s concerns. Demanding work schedules combined with unemployment rates of barely two percent combine to make the job of hiring and keeping employees a very high priority.