Carnduff 鈥� With the drilling rig fleet in Canada having contracted by 300 rigs, and likely more in the coming years, that can be a real problem if your business is built around moving rigs, like Fast Trucking Service of Carnduff.
Dennis Day, president, said they recognized the contraction early, and moved quickly to address it. More recently, they鈥檝e diversified both geographically and in service lines as additional measures.
In the last year, two operations were bought into the Fast Trucking Service group of companies, each in their own way, which allowed the core company to keep more of its people and equipment working.
鈥淪ince 鈥�05 we bought eight companies out, and they鈥檝e all expanded,鈥� Day said on Jan. 17.
They didn鈥檛 buy Swift Current鈥檚 Dynamic Heavy Haul, per se, but rather hired all their staff, bought a good chunk of their equipment, and took over the rent on the shop.
鈥淲e really didn鈥檛 take the company over, but I hired all their men. When they sold their stuff at the auction, I bought a bunch of it back,鈥� he said.
That meant hiring 35 people and bringing them under Fast Trucking. Basically everyone except the previous ownership came over to Fast. Some iron from Carnduff was sent to Swift Current to work.
鈥淭hey do quite a bit of service work, moving frac tanks, hauling tubing, stuff like that,鈥� he said.
This took place just before the 2019 Saskatchewan Oil and Gas Show in June.
The Swift Current operation is primarily rig moving and service work. There are usually around five to six rigs working in the Shaunavon area. That many not seem like a lot, but those rigs are usually some of the most consistent working rigs in the Saskatchewan fleet. While it was a bit sluggish for September and October, it鈥檚 since picked back up. 鈥淚t鈥檚 busy out there now,鈥� Day said.
鈥淲e鈥檝e got two rigs moving here, today, but three rigs moving up there (in Swift Current) today. So we鈥檝e got some Fast guys from here (working there). So it helps the guys and helps the customers, too.鈥�
The operating area is south of the 麻豆传媒AV Saskatchewan River, from Regina to the Alberta border.
Cara Dawn
The second operation picked up in the last year was Cara Dawn Transport Ltd. out of Regina. Dave Wellings was the owner.
鈥淗e鈥檚 been a buddy of mine for years. He phoned me and said you should take this company over,鈥� Day said.
鈥淭here was 40 people there, too,鈥� he said.
He had to move quickly in July, because other companies were trying to hire those men away. 鈥淚 told these guys in July I would be taking over and buying some of the equipment back.鈥�
All the staff stayed.
He went over to his friend Lenny Janz, who was working with a truck dealer in Regina, to talk to him about it. Janz asked who was going to run it, and Day said, 鈥淵ou.鈥�
Cara Dawn specializes in long distance heavy haul, with oversized loads being their specialty. 聽
鈥淭he reason we bought it was he has all his permits in place, and whatever you need to cross the border for hauling heavy equipment. That was something Fast didn鈥檛 have. So whenever we have a big job, we can lease our trucks (to Cara Dawn).
Cara Dawn had an auction in its yard in October. 鈥淚 just bought what I thought we needed,鈥� Day said.
This meant retaining about 70 per cent of the trucks and about 40 per cent of the trailers. But now some Fast, Sam鈥檚, and Competition Trucks are working with Cara Dawn, leased on as needed. This was a way to put men and equipment to work that otherwise may have been idle. It works the other way, too.
鈥淭oday, for instance, there鈥檚 five Cara Dawn trucks in Swift Current helping the Swift Current guys move rigs today.鈥�
It was essentially a diversification out of the oilpatch. 鈥淏ig time,鈥� Day said.
鈥淚鈥檓 not operating against people doing flat decks, working for nothing. This is all specialty stuff. They haul D10s. We just hauled a Cat 24 grader that weighs 240,000 pounds. We鈥檝e got 60-wheel trailer combination.鈥�
Another reason Fast took them over Cara Dawn is the fact it does a lot of work associated with Ritchie Bros. auctions. That鈥檚 a natural fit. 鈥淲e are huge supporter of Ritchie Bros. sales,鈥� he said.
There鈥檚 a lot of work hauling items to sales and away from them.
Contraction of rig fleet
Dennis saw the writing on the wall with the oil price collapse at the end of 2014, and he talked to his father, the late Tony Day, about it. 鈥淚 saw it right away. I went and talked to Tony about it in January of 2015 and said oil is going to US$40 a barrel, and we might as well sell at least a third of our older fleet, when the prices are still reasonable at the auctions, and the next four or five years, we鈥檒l be buying new stuff at half price.
鈥淭hat鈥檚 exactly what happened,鈥� he said.
He said in early December 2014, he warned their staff, 鈥淥il is US$68 a barrel, and it鈥檚 going down to the low 40s.鈥�
He saw a contraction of the fleet in the 1980s, and again in 1998. 鈥淵ou鈥檝e got to look at 鈥�85, 鈥�86, there were 40 rigs working here. That was a pretty big boom. And then it went down to 20, and then it went up with the Bakken play.鈥�
He showed a sheet from 2008, with 73 rigs working in southeast Saskatchewan and southwest Manitoba, combined. And many of the companies on that list no longer exist. 鈥淟akota鈥檚 no longer around. There鈥檚 no Totem, no Eagle, no Red Dog. There鈥檚 no Trinidad anymore, because Ensign took them out.鈥�
鈥淥ut of 16 companies in 2008, eight of them, half of them, are non-existent,鈥� he said.聽
Many rigs have been sitting since the downturn hit. 鈥淭he sad thing is, those engines are worth a lot of money. But you keep thinking, in a month it鈥檒l go to work. Next year, it鈥檒l go to work. After road ban, it鈥檒l go. And it just kept going.鈥�
A fleet that鈥檚 shrunken by half only needs half as many rig movers. 鈥淥r less,鈥� Day said.
There鈥檚 30+ rigs working in southeast Saskatchewan and southwest Manitoba. 鈥淚f we can stay like this, it won鈥檛 be too bad,鈥� he said.
鈥淲e鈥檙e about the right size, because 15 of the trucks that were parked out back went to Swift Current. Another six are working out of Regina.鈥�
The first quarter looks good for Fast, and Day has been encouraging oil companies to do more work in the second quarter. It hasn鈥檛 been wet in the region in the second quarter for six years, he noted.
There鈥檚 quite a bit more pad work, he said, but pad drilling means much less in the way of rig moving. 鈥淭here鈥檚 lot of multiple pads now. We鈥檝e really seen that since the downturn, more pad work, from here to Alberta. There鈥檚 a lot of pad work in Swift Current. We have two moves tomorrow, and they are skids.
鈥淣one of the rigs here walk. They just skid them. But it only takes a truck push, one bed and a tractor to usually move it. So instead of sending eight trucks to move a rig five miles, you鈥檙e sending three, and instead of getting eight hours, they鈥檙e getting four-and-a-half hours.
Rigs for sale but not moving
Tony Day had started buying rigs in the 1980s, and they wheeled and dealed in that market for many years, through ups and downs. 鈥淲e could buy cheaper than anybody else because we had the trucks to haul it,鈥� he said.
There鈥檚 about a dozen rigs in the yard for sale. The most recent acquisitions, made in Houston, didn鈥檛 work out as planned. 鈥淚 thought we could flip it, but we didn鈥檛,鈥� he said.
Some were bought back in 1997-1998 for scrap iron price, and then sold as a premium. But others were purchased, and haven鈥檛 sold. Some might end up as scrap.
鈥淚n the last few years, everything鈥檚 changed. People want top drive rigs,鈥� Day said.
鈥淚t鈥檚 all saleable, but there has to be demand.鈥�
鈥淢ost of the rigs are super singles or tele-doubles around here,鈥� he said.
鈥淚t seems like the ADR (advanced drilling rigs) and tele-doubles have more of the market, because that鈥檚 what was being built.
鈥淚鈥檝e already got a surplus of equipment. I don鈥檛 need to buy anymore,鈥� he said.
There鈥檚 not much of an overseas market for older rigs, either, he noted as they are often looking for bigger rigs. 鈥淚鈥檝e had guys come from Dubai, Russia, come look at rigs here. I鈥檝e sold some trucks to Russia, but not any rigs,鈥� he said.
