Two back-to-back calls setting up stories for this edition brought about a realization – 2017 is the year of the phoenix in the southeast Saskatchewan oilpatch.
One of those stories is running this month – Bandit Energy Services. Another, Innovative Artificial Lift Solutions, is on the agenda. In recent months, so has Canadian Plains Energy Services and Quinn ALS also fit the bill.
In each of these cases, the people running the show cashed out a few years ago, and now that their non-compete agreements are up, they are jumping back in.
At Canadian Plains Energy Services, president Dale Ziegler, who has a long history with the former Carson Energy Services, got going as soon as he could. The company now has three locations, in Carlyle, Regina and Virden Manitoba, and has plans to grow.
Quinn Artificial Lift Services is a re-entry of the Quinn name into the pump business. The Quinn family sold Quinn Pumps to Lufkin in December 2011, and then GE, and Quinn Pumps still maintains its own shop in Estevan.
The Quinn ALS group is from the legacy Quinn, and have brought their experience and knowledge to this new venture. The Quinn family history in pumps goes back over 50 years.
Now Lionel Pouliot, who also has a significant history with the former Carson Energy Services, is heading up Lloydminster-based Bandit’s new shop in Weyburn. While Bandit has been around for quite a while, it’s significant that Pouliot is back in the game. In this case, Pouliot is not an owner, but he’s setting up the operation.
The most recent phoenix is Innovative Artificial Lift Solutions. Cary Wock and his compatriots had set up Independent Pump Co., and eventually sold it to Weatherford. Wock ended up in management with Weatherford, but most recently has been farming. The crop must be in, because by the May long weekend, he was setting up the Facebook page for Artificial Lift Solutions.
Don’t read too much into the phoenix analogy, as this is not a case of rising up out of ashes. But it is a case of rebirth. These entrepreneurs are going back into what they know.
Its significant these ventures are starting up at a time when things are slow. Indeed, they among the very few new ventures this paper has seen in the last two years. In comparison, almost every edition we had from 2008 to 2014 had several new ventures profiled. Their starting up now shows faith, not only in themselves and their ability to build and grow a business, but in the oilpatch as a whole.
And this is where geopolitics fits in.
As I type this, President Donald Trump is in Saudi Arabia. The OPEC leader is indicating that production cuts will remain another 9 months. WTI oil prices are now above US$50 again.
These points are significant, as Saudi Arabia really needs oil prices to come up. Trump is there, in part, for the signing of over US$110 billion in arms deals to the Kingdom. That’s a lot of planes, missiles and ships. They’re going to need the money to pay for all those new toys.
Hopefully that results in oil prices that will see US$50 for WTI as a floor, and hopefully much more than that. Those new frigates the Saudis ordered are going to be hard to pay for with US$30 oil.
It’s doubtful any of these entrepreneurs based their business plans on Saudi arms purchases, but they will definitely see an impact from those – and hopefully to the positive, on the bottom line.
That strength in the market should help float these new ventures, and, hopefully, many more. It would be nice to start seeing a lot more new companies pop up.
Will we see more phoenixes? The Carson Energy Services sale was the largest in a series of sales about five to six years ago, when owners were cashing out while things were good. By now, surely, all the non-compete agreements are up. Who else might be waiting in the wings to fire up? Will it take sustained US$60 oil?
If that’s the case, do we hope the Saudis buy more frigates?
Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].
