IN PLAY: Nine Energy Created From 4-Firm Merger

Nine Energy Service, a conventional and unconventional completions and wireline services firm, has entered the oil and gas industry as a new oilfield services company that will serve the Bakken.
By Emily Aasand | July 18, 2014

Nine Energy Service, a conventional and unconventional completions and wireline services firm, has entered the oil and gas industry as a new oilfield services company.

The company is a merger of four smaller oilfield services companies: Northern States Completions, Tripoint LLC, CDK Perforating and Integrated Production Services Canada.
The company’s name reflects the entrepreneurial characteristics of the organization.

“Nine is a very strong number and it’s the last number in a counting cycle,” says Paul Butero, Nine Energy president and CEO. “Perfection in the oilfield is impossible, but nine out of 10 is as close as you’re going to get. We strive for perfection and that’s our commitment in maintaining the entrepreneurial characteristics of being fast, nimble and innovative.”

The four companies bring oilfield service experience from the different  North American oil basins to Nine Energy.

Northern States Completions, which was formed in the Bakken in 2007, was known for developing unconventional completion tool solutions. According to Butero, NSC has a variety of completion methodologies that are highly recognized by operations in the Bakken. Merging to form Nine Energy will give NSC the opportunity to pull through other product lines and to expand their resources and technologies across North America.

"Instead of being trapped in our Bakken world, we're now able to expand the technologies within other companies in Nine Energy and expand on them," said Rickey Green, vice president of the Rocky Mountain Region and one of the founders of NSC. "It also helps us reach the vision we've always had  of seeing Northern States tools run across the country and across North America." 

Tripoint was also a conventional completion tool company out of the Gulf of Mexico that focused on the niche  market for gravel pack installations. CDK began as a perforating services provider in the Barnett Shale, and expanded to offer wireline services for nearly all of the oil producing states. IPS delivered innovative production enhancement solutions for oil and gas producers via discreet services and customized solutions throughout all of Canada.

Nine recently made a some small acquisitions, including one in the Permian Basin, which is a rental surface equipment provider, and the other is Dak-Tana Wireline, which specializes in logging services.

“If you think about Nine Energy and who we are today, we basically have three divisions,” says Butero. “We have a wireline division, a completion tools division, and we’re building a surface rental equipment division.”

“I think what’s unique about Nine is we have a group of entrepreneurs who have built their businesses on their abilities to develop customized solutions and to be very fast and nimble in making their decisions,” says Butero. “These guys wake up every day and perform at exceptional levels at the well site, but more importantly are looking for new ways to drive operational efficiency and lower operator’s overall lifting costs.”

Moving forward as one large, merged company doesn’t come without challenges though.

“My challenge as we go forward is to professionalize the company and put structure into place to support our operations but not to the level that I choke the individual companies off,” says Butero. “We have to be supportive, we have to professionalize, but at the same time I don’t want to create so much bureaucracy that it limits our ability to move fast and to develop solutions quickly.”

A good example of this is one of Nine Energy’s newest developments: the Regulator Toe Valve. Rickey Green, vice president of the Rocky Mountain Region and one of the founders of NSC, had an idea for a valve back in December and six months later that valve is a reality and is ready to be field tested.

“I think what’s unique about this product is that as national regulations kick in, this tool will give the customer an opportunity to pressure up and test the well to make sure there are no leaks in the well and if there are leaks, they can remediate those prior to opening up the valve,” says Butero.

“It’s revolutionary to the market,” says Green. “There’s nothing that we know of out there that functions this way.”

For Butero and Green, this Regulator Toe Valve is just the beginning of their growth in the industry.

“It’s great to see the growth that’s happening out there,” says Green. “With the new leadership that we have in Paul, we’re going to go in and focus on quality programs. It’s just going to give us the basis to be a bigger and better company.”
“Right now we’re relatively small in size but we are growing very fast,” says Butero. “I think as we make additional acquisitions, a year from now, Nine Energy is going to look completely different. We’re going to be a much bigger company and two years from now it’s going to be really exciting to see where we’re at.”