Estevan– Alliance Drilling of Estevan has kept drilling, albeit at a reduced pace, through the downturn.
Four years ago Advance Drilling Ltd.’s ownership divided the company, resulting in two companies, Advance and Alliance Drilling and Oilfield Services Ltd., which are now totally separate entities.
Alliance is owned by Paul Chueng, who was also a partner in Grimes Sales & Service prior to the company being purchased by Schlumberger. Ron Mowberry is the general manager and a part-owner in Alliance, as well.
Brian Skjonsby is assistant manager of Alliance, where here’s been for three years now. Prior to that he worked for oil producers as a consultant for drillings, construction and completions. One of the early companies he worked with was Grandbow Petroleum, but most recently, he had been with Spectrum Resource Group. Skjonsby spoke to Pipeline News on Jan. 21.
Alliance has eight drilling rigs, making it one of the larger outfits among the small drilling contractors based in southeast Saskatchewan. All eight of its rigs were once Advance rigs, and they are slowly being changed over from Advance’s trademark burgundy colour to Alliance’s blue.
Skjonsby said in 2014, before the oil shock, Alliance was running five to six rigs regularly. But in 2015 that slowed down quite a bit. “We probably ran an average of three or four,” he said.
Road bans, in recent years, have tended to run a long time as well, affecting activity levels.
As for 2016, so far, he said, “We plan on having four rigs working until road ban.
“Things have changed a lot. I see we’re going back into the 80s – a big slowdown. You have to watch your pennies. One’s going to make a fast buck like in the boom.
“Paul predicted before the slowdown started (there would be) $28 oil. A lot of people didn’t believe him. He was right,” Skjonsby said.
Of those four rigs working, he said, “Today we have three working for Crescent Point and one that works for a few other companies, but mostly Elcano. The rest are parked, but ready to go. We put in bids and maybe we’ll get lucky.”
Where are the workers?
“Believe it or not, as slow as it is, it’s still tough to find men,” Skjonsby said.
“I don’t know where everyone’s going. Housing in Regina? Or they don’t want to work?
“I have no idea what’s going on. I think a lot of people are leaving and not coming back, looking for steady work. You get paid good money, but it’s not a steady cheque,” Skjonsby said of rig work. “That’s the reality. It has always been.
“In today’s world, you have so many rigs laid down, and you have a core of people. When it comes to slow times, you try to get the most experienced people you can.
Skjonsby said, “We’re starting to see the phone calls come now. This week, we noticed it. I think a lot of guys think this will be a short slowdown. We believe it’s an eight-year slowdown, to get to what it was.
“The only thing that will change that is a war.”
Strategies
So, what strategies are Alliance following, given they thing low prices are long term?
“Keep out of debt. Cash is king,” he said.
While Cheung has numerous investments, Skjonsby said companies have to support themselves. Alliance is in a good capital position.
“In these times, you don’t want to go into debt,” Skjonsby said. “Manage properly. Don’t overspend. No thrills. No more swag. It’s time to buckle down.”
For instance, instead of fancy give-aways that have been common in the industry for years, he’s suggesting pens might be a less expensive alternative.
“We cut wages a little bit, but we brought them back up. We found other ways to cut costs.
“The biggest thing is we want to keep the men working. They’re paying their bills.
He added, “It’s getting quieter and quieter. I think it’s going to be a quiet summer.”
“Thirty-two years in the oilfield, it went really fast. I still enjoy it a lot. I’m still learning a lot,” he said. In all that time, the number of people he’s interacted with in the oilpatch that he didn’t like he could count on one hand. The vast, vast majority of people he’s found quite pleasant.
“That’s what keeps me in it – people. It’s a lot of fun. Sure, some hours are late. Some are short.”
