Little Guy Oilfield Rentals keeps rigs on solid ground
Rig matting firms see growth as wells grow more complex
Foul weather means good business for Jack Fraser. While torrential spring floods this year may have cost operators by forcing some production to be shut-in, purveyors of rig and access mats were prepping for new sales. “This year especially, if you didn’t mat you didn’t do anything,” Fraser, co-founder of Nisku-based Little Guy Oilfield Rentals Inc., says.
Not all oilfield business involves drill bits and rig rentals. As drilling seasons get longer and operations grow more complex, the business of rig matting is expanding, too. Setting up and running a drill site in remote parts of Western Canada can be challenging at the best of times. Inclement weather can quickly turn access roads and northern leases into mud pits and bogs.
But Mother Nature alone doesn’t drive demand. Fraser says he’s doubled his inventory from three years ago to 3,700 mats as drilling contractors take a more proactive approach to well-site safety. “You can work faster and safer on a nice floor, instead of slogging around in the mud,” Fraser says. “Maybe it’s fairly dry now, but when you’re working on a project and it rains for two weeks, you can shut down or try and get matting in on top of the mud.”
Strad Energy has likewise been able to grow its matting business during the past three years. In 2009, the Calgary-based oilfield services company had 10,000 mats. Today, the company’s inventory across North America totals 30,000 pieces – with two-thirds of it in Canada. “It’s grown every year, but especially in the last two or three years,” company president Andy Pernal says.
Much of Strad Energy’s inventory growth has been in rig mats. For years, the company’s inventory consisted primarily of eight-foot by 14-foot access mats, which were rented out to create temporary roadways over mud and bog, so vehicles wouldn’t get stuck en route to a drill site. The inventory of rig mats – larger eight-foot by 40-foot mats that help support a rig on rough terrain – was much smaller. Now, the inventory is split pretty much right down the middle. “People talk about the need because of wet weather and that’s true, but there’s an underlying trend [focused on] the environment and safety,” Pernal says.
Another driver is drill programs that are getting more complex. Matting companies have benefitted from the proliferation of horizontal wells and multi-stage, hydraulic fracturing operations. Contractors increasingly drill multiple wells from a single pad in a manufacturing approach to development. “Before, if they needed access, a matting company would come in. Now, they need a pad because they’re drilling 10,000 feet vertically and 10,000 feet horizontally,” Pernal says. “It’s a temporary manufacturing facility, rather than just three to five days of drilling. The requirements have increased and the need for matting has increased dramatically.”
While the derricks and drilling programs they support have changed, mats have remained decidedly less complex. It’s one reason Fraser likes the business so much. “Mats are mats. You can only improve them or modify them so much,” he says.
Plastic mats made from composite materials are starting to replace older, steel-framed wood units, which are prone to water damage. The plastic units are thinner and lighter, which helps reduce transportation costs. A single lease can require up to 1,000 of the eight-by-14 foot interlocking mats. “That’s a lot of truck loads and a lot of money,” Fraser says. He doesn’t expect plastic mats to replace wood mats altogether, insisting each has its own place in the industry. “You probably don’t want to put a drilling rig on the lightweight ones,” he says.
The plastic mats, however, do have an environmental benefit over their wooden counterparts. Because they are one solid piece, there are no cracks for produced liquids and potent chemicals to seep through, making the plastic mats better for spill containment. The feature makes plastic mats ideal in environmentally sensitive regions, Fraser says. “We did a job in Saskatchewan and the only reason we were there was to cover some grass that they didn’t want disturbed,” he says. “When you pick the mats up, you can barely see we were there.”
At Strad Energy, Pernal doesn’t see business letting up any time soon. Matting is just one of five business units the company operates, but it attracts a fair share of attention. Strad spent some $8 million of a $50 million capital expenditure program in the first half of 2011 on new ventures. One of those initiatives was developing a line of composite mats. “We spent a number of years developing our composite mats, finding the right resin, the right manufacturer and the right surface tension,” Pernal says. “Demand far outstrips our rental fleet and we see that continuing moving forward. Certainly the wetter weather accentuates the requirement for mats and we experienced that in North Dakota and Canada this year, but there are underlying fundamentals of the environment and safety. If we have a dry 2012, we don’t see demand decreasing.”