The New Service Model

By adapting to the Bakken, these businesses, consultants and services are thriving. The common theme for each service is linked to safety, innovation and efficiency.
By The Bakken magazine staff | September 19, 2014

There is no single service mantra applicable to every Bakken business.

Some providers have adopted the one-stop-shop approach. Others believe the best business model is providing only a single service. In today’s Bakken business climate—from petroleum engineering firms to welding gas suppliers—there is one common thread that links nearly every service provider in every segment of the Bakken shale play: evolution. For some firms, that means simplifying the service packages offered to clients, but for most, it means adapting best-practices taken from other geographic regions or industries to fit the fast-paced, demanding nature of the Williston Basin. To highlight the theme of change, we covered a wide swath of the businesses responsible for keeping the Bakken running. Each business has unique demands and challenges, and each has learned the merits of adopting a new service model for a unique situation.

-Luke Geiver

Completion Commitment
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Not all Bakken services yield immediate results. Tyler Micheli, petroleum engineer and team lead for the production enhancement division of Denver-based Sigma3 Integrated Reservoir Solutions, had to endure roughly two years before witnessing the benefits of a detailed completion approach put to use in the Bakken. Micheli was employed by Helis Oil & Gas to produce more hydrocarbons in the South Antelope field. “We made changes and two years later independently verified results showed an increase in well productivity and performance,” Micheli says. “We determined that an engineering workflow needs to look at every facet of the well’s life from before it is even drilled.”

Micheli says that his success reveals the importance of patience and on taking a long-term view towards a client’s success. Micheli’s team began working with Helis at a time when operators were just starting to drill 2-mile laterals and use complex completion methods designed on a one-off basis. After reviewing the approach the team took to justify the longer laterals and the complex completion designs, Helis points to several elements crucial to success.

Fracturing diagnostics pre-completion are important, he says. “We would do step-rate tests and calculate near wellbore frictions and really understand what would happen to the frack when it goes into the formation.” According to Micheli, the tests take roughly 20 to 30 minutes to perform. “They are an industry standard but not everyone does them. A lot of operators push by gathering data and running the tests.”

To perform the tests, a pressure pump operator pressurizes the pumps to 50 barrels per minute, injects a small volume of fluid into the well and slowly decreases the pressure from 50 bpm to 40 and repeats the step-down until there is no pressure. The fluid pumped into the well works against the pressure of the pump and the operators can determine two things, Micheli says: perforation friction and how well the fluid moves through the wellbore.Understanding the complexity of the perforation path allowed Micheli to optimize the fracture network. “With too many cracks and corners you don’t get a real good connection for drainage,” he says. If that is the case, Micheli can deploy proppant slugs—high packs of proppant in the 500- to 1,000-pound range that are injected with the purpose of breaking open certain sections of rock.

In addition to step-rate tests before the completion is performed, Micheli and his team also verified the value of reducing the use of well flushing—a process that involves flushing water through the wellbore post-completion and preproduction. “Some overflush, which pushes the proppant away from the heel of the well. We concluded that keeping proppant near the wellbore is absolutely critical,” he says. “This was a big operational change to make sure we didn’t overflush.”

During its time working in the South Antelope field, the Sigma team also learned the value of onsite engineers. There were engineers onsite every hour of every day that the Helis wells were being completed. Since reviewing their work, Micheli’s team has since written a paper on its time in south Antelope, and according to Micheli, their time revealed something every Bakken operator should know about individual wells. “If you have a weak link in any part of the [well] chain, then it won’t perform as well as it otherwise could.”

-Luke Geiver


Meeting the Safety Demand
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The rapidly growing Bakken play is putting a strain on the existing inventory and personal protective equipment (PPE) supply chain, and customers are looking for more and more options to keep their businesses running safely. Grainger believes it has found the solution.
“Our presences are supported by the supply chain that helps get products to customers either same day or next day and allows us to provide critical product support and services that help keep their operations running and their people safe in two very important ways: making sure we have the right products and making sure we can get it to customers quickly,” says Marty Neus, district sales manager at Grainger’s Williston branch.

Grainger opened its Williston branch in 2013 and plans to open a branch in Dickinson by the end of the year.

The Williston branch is unique in that it’s open and accessible 24 hours, seven days a week and it has a customized inventory based on its market knowledge of other oil and gas plays in order to have the correct inventory to keep customers’ businesses running and to keep their employees safe.

“We will open up our branch after hours, which is a service that has been well-received by customers,” says Neus. “Having access to that inventory is critical and we’ve had multiple opportunities to open up our branch after hours to help our customers.”

“Our new Dickinson branch, in addition to locations in Williston and Fargo, will help more customers get the products they need, when they need them, to keep their operations running efficiently and their people safe,” said Cassandra Dye, regional vice president of customer service for Grainger.

Providing tools and equipment for safety is where Neus and his team focus most of their efforts within the Williston Basin.

“We supply things such as personal productive equipment—specifically Lockout/Tagout, electrical safety equipment, medical first aid supplies, temperature stress tools and equipment for confined spaces,” says Neus. “Some of those workers have to go inside tanks, go inside really small, cramped spaces so we make sure that they can enter and exit those spaces safely.”

Grainger also offers antislip products for oil rigs, fall protection equipment, signage, fire protection, and a handful of other service equipment that it says has been in high demand.

The company helps its customers manage inventory in two different ways. The Grainger manage solution—KeepStock—allows its employees to go out to sites and manage the inventory for customers. According to Neus, this puts time back into the customer’s day because Grainger is providing an onsite labor source. Grainger also offers a customer-manager inventory solution, by which the customer can track and order as they please. 

“In the Bakken, managing inventory, especially safety inventory, is one of the best ways a company can remove costs,” Dye adds. “Grainger’s KeepStock inventory management solutions help customers save money and space, while increasing productivity and freeing up time to do more important things on the job.”

According to Neus, the oil and gas services companies have been some of Grainger’s predominant customers. “For the fracking and wireline companies, it’s really critical to have PPE available 24 hours, seven days a week. We’ve seen a positive response from our availability and with how we provide inventory management solutions to those customers.”

Grainger offers more than 135,000 safety products, almost always having the products customers are looking for, but they also partner with their strategic vendors to perform audits and other safety services.

“One of the services we partner up to provide is hand protection audits,” says Neus. “We’ll partner with one of our strategic suppliers and look at what the customer is doing, look at areas for improvement or point out areas where injury could occur, and then come back and provide solution samples. This helps customers really stay on the cutting edge of their safety program.”

With the maturation of the Bakken, Grainger’s role in Western North Dakota is more important than ever.

“Customer safety, especially to keep people safe in being more productive all while reducing expenses, is becoming more and more of a focus for our customers. Grainger can provide solutions to help customers manage their inventory, to keep their facilities up and running, and to help them save time and money.”

-Emily Aasand

Long Lateral Answers
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Extended reach laterals—those drilled past the 2-mile mark—come with a price. In some cases, coiled tubing cannot reach the end of the well to mill out wellbore plugs inserted during the pressure pumping process, leaving hydrocarbons freed near the toe area of the well unrecoverable. Renee Supplee, sales engineer for Baker Hughes, has a solution: the SHADOW series frack plug.

The plug was designed to provide a larger inner diameter than other composite plugs and to stay in place for the life of the well as opposed to composite plugs that must be drilled out before production can commence. “For longer laterals, this plug offers a huge advantage,” Supplee says. In an extended reach lateral, an operator can place the SHADOW plugs near the toe of the well and use composite plugs at depths reachable by coiled tubing.

Although most composite plugs are not strong enough to feature an internal diameter (ID) of more than an 1.5 inches, the SHADOW series plug is made of steel. The ID of the SHADOW series can go as wide or wider than 2 inches because of the stronger material, Supplee says, a feature that doesn’t require operators to drill out the plugs in order to bring them on production. The steel design, along with a dissolvable ball, makes the whole system work. After the plug is set via wireline, dissolvable balls are dropped to portion off a given section of well. Eventually, the balls dissolve, allowing the well to start flowing.

The purpose of the plug is not new to people. What is intriguing to people is its potential of what it could do to avoid drill out and still have a nice ID,” she says. The SHADOW plug has been in testing and use phase for more than six months. The main hesitancy from potential clients has to do with time and efficiency in the event the balls do not dissolve properly, Supplee says. “If you are going to have to drill something out, you wouldn’t prefer to drill out steel.

To date, Baker Hughes has already created a Williston Basin case study for the technology using the SHADOW series frack plug and intallic dissolvable balls. In a well drilled to a total depth of 25,400 feet and a kick-off point at 10,589 feet, the use of Baker Hughes SHADOW plugs eliminated milling, saved two days of drillout-related time and roughly $50,000 for the operator. Without the use of the Baker Hughes plugs, the use of coiled tubing to mill out composite plugs inserted near the toe of the well would not have been possible.

-Luke Geiver

Praxair Gets Quicker
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Praxair Inc. offers unique gases and field services for customers in the Bakken.  The company is one of many that has performed equipment upgrades for faster in-and-out service times. The global company recently opened a new packaged gas fill plant in Bismarck, N.D., which will significantly increase the cylinder gases capacity in the Bakken oil play. The automatic facility has been designed to quickly and efficiently fill packaged gases from single cylinders and packs to liquid vessels and tube trailers.

According to Robert Crew, general manager of the U.S. central region of Praxair, the biggest benefit of this plant and the services it provides is the ability to turn products around quickly for customers.

“We’re at approximately double the capacity that we had before and that’s just on the filling side,” says Crew. “We built a plant that was designed to be loaded and unloaded quickly.”

Praxair has been present in the Williston Basin since the late '70s and the company has been expanding in the region ever since to keep up with the demands of their customers.

“We’ve managed to expand our route sales coverage out there and our staffing levels to accommodate the increased demand of all the customers moving into the area,” says Crew. “The guys who are out working in the field in the Bakken need to be able to get in and out quickly, so we’ve remodeled all of our locations to fit that need,” says Crew.

Praxair’s newest facility is responsible for filling argon and argon carbon dioxide mixes that are used for welding applications. Those welding applications—welding rods, welding wires and safety products— are out in the field for repair and maintenance on rigs, but they’re also used in the construction products, pipelines, gas plant construction and for refineries, which help accommodate the rapid Bakken expansion.

-Emily Aasand

Proppant-In-A-Box
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The proppant supply industry is approaching unchartered territory, which in the Bakken, is both good and bad. As operators move to longer laterals, increased fracture stages per well and deploy nearly double the amount of sand used over base completion designs established only four years ago, demand for proppant has been pushed to an all-time high. But, transportation issues related to rail bottlenecks and rail network congestion have made proppant buyers and suppliers rethink their distribution models in order to seize the Bakken’s unprecedented thirst for proppant.

Sandbox Logistics LLC, a Houston-based proppant distributor, has earned respect, and business, for its innovative tweak to the proppant supply business. The company—formed by several logistics veterans—has designed a cube-shaped shipping and storage container that can hold the amount of sand typically delivered by truck trailer. Sandbox has already received three orders from RockPile Energy Services and more from Liberty Oilfield Services to use the patent-protected system. The design of the cube is meant to eliminate equipment such as sand movers, silos, pneumatic trucks and some conveying equipment while improving the economics of logistics. 

Because the boxes are equipped with pneumatics, the need for powered blowers on the well site to remove the sand from the truck hopper is gone. The units can be prepackaged with various proppant types or sizes, allowing completion companies the assurance that when they show up to a well site, the sand will be there. According to Peter Glynn, senior vice president of strategy and commercial development, the boxes can be stacked and unloaded in any order. “We have filed a substantial amount of intellectual property around the system to address the entire logistics chain,” he says. “The system is a true process innovation.”

The main draw of Sandbox’s system to its Bakken clients is the assurance that the proppant will be onsite. “It alleviates a lot of scheduling problems,” Glynn says. The boxes can be predelivered to a site via rail or specifically designed truck trailers. The stackable nature of the boxes requires roughly one-third less space on the well pad as pneumatic truck trailers would need.

Use of the Sandbox product first happened in the Bakken, a factor that insured the product was well-suited for harsh weather conditions, Glynn adds. Although the goal of Sandbox is to develop regional distribution hubs, it currently works on a one-off basis with its clients.
Portare, like Sandbox, also offers a shippable containerized option to move frack sand and ceramics. The system benefits the user by eliminating transload handling damages and railroad wait time, according to the company. Current rail wait times can range from six to 18 months. The units can be filled with sand at the frack sand site and be shipped via truck directly to the well site. Portare offers a 700-cubic-foot and 1,400-cubic-foot box. When shipped via rail the boxes can sit two units high. On a shipping vessel, the boxes can be stacked as many as eight units high. A truck trailer can carry roughly 23 tons of material over the road.

-Luke Geiver


Walking Rig Designers

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Entro Industries specializes in figuring out how to move large, heavy equipment that people never intended to be mobile, says Shawn Smith, president of the Oregon-based engineering and design firm. Entro has serviced the heavy haul, aircraft and drilling industry since ’94, led by Smith’s father Harlan, founder of the firm. Shawn joined his father in 2010. “We decided to change the focus of the business. We decided to take the lead position on contracts.” With the help of Western Fabrication, a custom welding and machine shop, the Smith’s applied their new ideas to the drilling rig industry. The team now designs and fabricates custom and bolt-on systems capable of changing a stationary drilling rig into a walking unit. Since 2010, Smith estimates the team has been directly involved with 180 to 200 rigs, performing either a retrofit of an existing unit or the design of a newly built rig. “We’ve been at it one a week for at least the last year,” Smith says.

In addition to the drilling firms heavily leveraged in the Bakken, such as Nabors Drilling and Precision Drilling, Entro has also provided its services for rig operators working in Alaska, Canada, South America, the Middle East and the entire Lower 48.

“When you install one of our units, it isn’t just about designing and installing equipment,” Smith says. “It is about taking an existing asset, like a 30-year old drilling rig and figuring out how to safely mobilize that rig and give it additional service life,” adding that, “it is the combination of the machine design and the structural analysis that is our specialty. We kind of do the things that other people don’t know how to do.”

Entro's main product is called the Kingpin system. The Kingpin combines a high-capacity jack and a walking foot into a singular space. The equipment package can be installed directly onto a rig. Using a ratchet or a remote control, an operator can move an entire drilling rig in any direction once the Kingpin system is installed. “We have actually removed other walking systems from rigs and replaced them with ours,” Smith says.

The system is a walk-and-roll set-up, utilizing a large stomper foot directly under a hydraulic jack. Because the stomper foot can shift positions, by roughly 2 feet, in any direction from where the base of the hydraulic jack is attatched to the top of the stomper, the system can move a rig. The jack deploys, lifting the entire rig off the surface, a rolling mechanism rolls the rig to follow the placement of the stomper while the rig is still in the air and then the jack lowers the rig directly above the position of the stomper. The process is repeated until the destination has been reached.  “You can actually spin it in a circle,” Smith says. The beauty of the system is often seen in difficult well-site layouts or when settling under a rig mat occurs, he says.

Entro’s success with the walking systems has required Western Fabrication to update its abilities and its approach towards safety and quality. The company recently completed the American Petroleum Institute’s 4F Monogram certification program. The certification is the result of a yearlong audit to ensure the facility and its employees—from designers to fabricators—meet the stringent requirements of the API. In 2014, Entro's sales will increase by 75 percent over the previous year.

-Luke Geiver