Ensign

Source: Energy Digital

Date :12/12/2007 11:05:28

Will Matthews talks to Exec US about Ensign’s rapid growth, technological innovation and the launch of the next generation ADR 500

Written by Ian Armitage and Produced by Nick Ledue

Ensign United States Drilling Inc. serves oil and gas companies exploring in the Western United States. A subsidiary of Ensign Energy Services, the company provides contract drilling services primarily in the Rocky Mountain and California regions. It is the third-largest and most active land-based drilling contractor in the Rockies.

Headquartered in Denver, Ensign has 66 drilling rigs in operation in Colorado, Montana, Nebraska, Nevada, North Dakota, South Dakota, Utah, and Wyoming. In California the drilling contractor operates 18 drilling rigs primarily in the San Joaquin, Los Angeles, and Sacramento basins.

Founded in 1989, it quickly worked its way up the oil and gas industry, becoming a major player. Will Matthews, vice president of marketing, believes the company’s rapid expansion is due to delivering experienced crews and well maintained and designed equipment.

“Since our inception, we have grown to the point where we have earned a significant market share in the basins where we are focused,” says Matthews. “We have built top shelf fleet and added twelve next generation, technically advances rigs. These upgrades and additions have provided us with the ability to satisfy the demand of selective oil and gas operators. And has allow us to become a major player in the contract drilling industry.”

Well drilled

Ensign provides equipment and services for drilling oil and gas wells on either a footage, day-work or turnkey basis. It now has more than 76 drilling rigs and 15 well-servicing rigs operating in the United States.

“Our strategy has always been to become a vertically integrated company,” explains Matthews. “Unlike most drilling contractors, we have a lot of other services we can provide. These include underbalanced drilling units, coring rigs, coil tubing drilling, well service rigs, oilfield rentals, camp and catering servicing and directional drilling services. In essence, we are becoming a one-stop shop that operators can count on for quality services.”

Innovation, flexibility and mobility

Ensign has accumulated an extensive rig fleet which has all the necessary flexibility and mobility for meeting the challenging demands of today's oil and natural gas industry. Over the years, it has been an innovative organization, contributing to advancements in drilling and well servicing through the innovative use of advanced technologies.

It is believed that Ensign, which is seeking further expansion in all its markets, will soon enter into the Fort Worth basin, as well as other basins in the US. Such growth opportunities present an opening for the company and will enable it to continue to contribute to the success of its customers within the sector through the implementation of advanced technologies, particularly the new generation, fit-for-purpose ADR (Automated Drilling Rig) drilling rigs.

Excited by the market opportunities the ADR 500 opens up, an enthusiastic Matthews continues: “The ADR is able to move in quickly on a very tight drilling location, saving valuable time and money. The ADR rigs are available with self walking abilities which makes the ADR rig a perfect solution for multi-well pad locations. Since the ADR 500 has an automated iron derrickman the need for a crew member to be in the derrick is eliminated which has contributed to reduction in injuries.”

The bottom line is that the advancements built into the the ADR series of drilling rigs improve employee safety. “When it comes to operating drilling rigs, we have made a number of step changes and advancements in the area of safety,” explains Matthews. “From the design up, the Automated Drilling Rigs have some distinct advantages. ADRs are highly automated and eliminate many potential dangers, improving safety. Our safety record has reflected the fact that we have managed to get people out of harm’s way.”

The ADR 500 helps take people away from danger, minimizing risk and eliminating the need for crews to work in difficult circumstances. Almost everything on a conventional drilling rig is heavy and hard to move; but with the next generation ADR 500, Ensign personnel can leverage automation to reduce the interface with heavy and dangerous drilling rig components including rill pipe. This technology is really all about increasing efficiency and reducing elements of danger.

ADR equals faster drilling

What of the cost of drilling slowly? How will that affect an operator’s total well costs? Well, drilling slowly is a waste of resources and proves to be highly costly. The ADR 500 can help speed up the drilling process, thus increasing efficiency and saving money (that’s on top of the increased safety benefits).

“We have been able to create a rig configuration that enables operators to reduce location size, operate more safely and drill faster, which is great not just in terms of cost, but also in terms of the environment.”

Oil and gas operators are always looking for ways to reduce the cost and time required to mobilize a rig. The unique design of the new generation rigs will help operators achieve that objective, in part because of the reduced number of loads.

“We significantly reduce drilling time. The industry is demanding services that will enable wells to be drilled faster, without compromising safety. This trend is putting increased pressure on the older equipment, which is costing operators too much money. Operators are now looking for more viable faster drilling equipment” says Matthews.

The industry is starting to see a balance between the demand for and supply of drilling rigs. For the first time in roughly five years, supply is now matching demand. “Because of the once high demand, all kinds of equipment has been brought into service,” says Matthews. “To meet the needs of operators, equipment that had been retired has been overhauled and re-commissioned. At this stage of the game though, we will see more of those older rigs being re-retired. The superior equipment will then be that which continues to work.”

Despite the leveling out in the industry as a whole, 2007 has been a record breaking year for Ensign. Within the US, around 42 percent of its rigs are on long term contracts, so even though the market in general may be softening a little, the company continues to maintain high utilization and therefore return a profit to its investors.

2008 will bring a new set of challenges, particularly in terms of rigs being taken out of commission. But because of its range of ADR equipment, Ensign will be able to tap into a news market, which are full of potential.

Expanding its territory

Over the next five years, Ensign will continue to grow geographically, expanding its geographic diversity. As a business it currently operates in Canada, the US, Australia, New Zealand, Thailand, Indonesia, Oman, Liberia, Gabon, Argentina and Venezuela.

“We see ourselves expanding further in those areas and also probably expanding our set of services in new ways. We will continue to supply the in-demand services that allow customers to benefit from our ‘one-stop shop’ approach to the market.”

Ensign’s international reputation enables it to be flexible and nimble enough to approach new market opportunities when they are available, regardless of where in the world they are. It is currently looking at opportunities in other countries that will enable it to further support its customers.

Secret to success

Although it may sound like a cliché, according to Matthews the key to Ensign United State Drilling’s success is its people. There is no doubt in his mind that the people on the Ensign team are the single most important factor in the company’s incredible growth story.

“Although it is true of most businesses, the secret to our success is our people,” explains Matthews. “Our level of experience is a direct reflection of this. You can have the best equipment, the safest and most technologically advanced rigs, and that is great, but it is the people, specifically the crews and rig managers that are going to make or break a drilling contractor.”

Training has also played a significant role, as people are only as good as the skills they have acquired. To ensure the growth of Ensign’s own employees and to help them advance their skills, the company focuses heavily on training, including specific training on the use of the new-generation equipment. “It is important to make sure our people can be the best they can be. Our Master Driller and Active Mentoring training programs help assure that our people are focused on success and are proficient in the skills that it takes to make success happen,” explains Matthews.

Exciting time

This is an exciting time for the business because with all the opportunities the new technology has brought, Ensign has been able to implement a number of new initiatives for the future. The company’s goal going forward is to ‘drive to zero’ incidents and injuries, an initiative aimed at having one complete year without accidents, injuries or lost man-hours due to accidents or injuries.

“We are committed to driving to zero,” says Matthews. “We believe each and every incident and injury can be prevented. Over the last year we have focused on implementing new safety process in an attempt to reach this goal. Most rigs have now reduced incidents below the industry benchmarks, so we are pleased with the results the initiative yielded.”

Continuing, Matthews adds: “What defines us as an organization? Well, we typically work with companies that are concerned the risks of highering contractors with old equipment and with increased down time, which frankly results in people being paid to stand around and do nothing. Or secondly, they are tired of having an untrained crew who are making more and more mistakes that are leading to higher well costs. And thirdly these companies are frustrated with delays or promises not being met.

“This is when we end up working with companies who are looking for more of a partnership and that is why we have done the things we have done. We have focused on building a strong safety program, developing state of the art, cutting edge equipment, and maintaining a wide variety of ancillary services to support the primary service of drilling.

“We listen to what is being said and the result is that through partnerships we respond in a way that really allows a customer to have smoother operations that are frankly more fulfilling. We are more of a partner and that is really what differentiates us,” Matthews concludes.

In the future, Ensign must be mindful of the extremely high demand for quality workers, which is making it harder to find people with a proven track record and the right levels of experience. Training will play an important role in this. Equally as important is the company’s existing culture, which rewards staff loyalty and encourages them to push the frontiers of the oil and gas industry. Who wouldn’t want to work for such an ambitious and progressive company?