Carlyle – Watching the campus of Canadian Energy Services, south of Carlyle, over the years has been an exercise in watching continual growth. What started with Moose Mountain Mud then added Equal Transport and PureChem Services has grown into a much larger entity, with locations throughout the Western Canadian Sedimentary Basin as well as operations in the United States.
The publicly traded parent company, CES Energy Solutions, has grown over the years. The back of their business cards are plastered with logos for their various division. CES itself had changed its name as of June 15, 2017, from Canadian Energy Services & Technology Corp. to CES Energy Solutions Corp.
In their corporate literature, the company describes itself as, “a leading provider of technically advanced consumable chemical solutions throughout the lifecycle of the oilfield. This includes solutions at the drill-bit, at the point of completion and stimulation, at the wellhead and pump-jack, and finally through to the pipeline and midstream market.”
Mike Lothian holds the title of controller, but he also acts as the general manager, to some extent, of CES’ efforts in Carlyle. He spoke to Pipeline News on Jan. 10.
The names Equal Transport and Moose Mountain Mud are disappearing, however, according to Lothian, with Canadian Energy Services and PureChem absorbing what had been operated under those names.
“We’ve basically rebranded Moose Mountain Mud into Canadian Energy Services, to fit with the corporate entity. It still get’s called Moose Mountain Mud by everyone in the field,” he said.
“The trucking piece has changed a lot for us. It’s really just there to support the other businesses,” he said of Equal Transport. Equal used to do its own, separate work, like produced fluid hauling. “Basically, the main goal of the trucking piece is getting the customers’ products out to them to locations or just the long-haul trucking, to get products either into or out of Carlyle,” Lothian said.
Doing so allows them to have control on how their production chemicals are applied.
Moose Mountain Mud, the drilling fluids division, was the original company in Carlyle. The partners of several drilling fluids companies came together to go public, becoming Canadian Energy Services.
The next division born in Carlyle was Equal Transport. Equal Transport started dealing with semi vans for getting drilling fluids out to site, as well as material to Carlyle. “As PureChem started to build a little bit as well, it created an opportunity to not only haul product back into Carlyle, but to also haul finished goods out west for drilling fluids and production chemical sales into Alberta,” Lothian said.
The big expansion of the trucking division was fluid hauling from about 2009 to 2014. “We still do a little bit, but not that much. Primarily it’s either getting the drilling fluids out to the customer, the transfer of products in and out of Carlyle, and some of the specialties things like stimulation fluids and pressure trucks,” he said.
Equal’s evolution out of produced fluid hauling happened over 2014-2015. It came when there was a need for some of those tankers for PureChem’s internal needs, like hauling chemicals from the railhead at Estevan to Carlyle.
Lothian talked about how they spread out from being at the drill bit to essentially the entire production stream. That incudes items like production chemicals for corrosion inhibition, and those used for stimulation. The PureChem plant went into operation in 2011, CES’ factory for making their numerous products.
One particular division, added in 2013, was Jacam Chemicals LLC, in Kansas. “That provided additional strength,” Lothian said. “Jacam gave us access to some new, proprietary products and additional technical abilities using their lab in Kansas that allowed us to be ready as customers made changes in the downturn, looking for cost savings, those sorts of things. PureChem really had built out a team able to help out the customers with both products, technical service and laboratory capabilities to help the customers, not just in southeastern Saskatchewan, but across Western Canada.”
PureChem now has two PhDs working in their lab, Dr. John McEwen and Dr. Clinton Lund. McEwen has been with PureChem since the get-go.
During the past several years, they have continually expanded, adding an addition or building each year since 2014. PureChem established new lab facilities in a former retail store building in downtown Carlyle in 2016. That lab is now the primarily lab, as the lab on their main campus is now used for sales support and quality control. The downtown office also now houses their sales group.
Last year PureChem’s expanded warehouse facility opened.
PureChem built a relatively strong base prior to the downturn set its foundation to grow off of, according to Lothian. Diversifying beyond drilling fluids, with drilling fluids as a backbone, was extremely helpful.
PureChem is where the majority of their 180 employees in the region are, as well as a lot of the revenue, but it still requires everybody working together to makes things work, he said.
It’s hard not to notice the number of totes in the PureChem yard, extending both front and back, and how that’s grown in recent years.
Lothian said, “The growth of PureChem, just from a pure volume perspective, both in southeast Saskatchewan, and in our remote locations in Alberta and Saskatchewan, has been phenomenal. Carlyle is the manufacturing hub for most of PureChem’s products, so the quantity of what you see here is not just for southeast Saskatchewan, but for all our division.”
They have about 180 employees out of Carlyle, plus another 35 in the rest of Saskatchewan and southwest Manitoba. They have locations in Midale, Carnduff, Melita and are having a building constructed in Virden which should be ready hopefully before summer. In western Saskatchewan, Shaunavon, Swift Current, Kindersley, Macklin and Lloydminster also have locations. There are numerous locations in Alberta and one in British Columbia.
Bucking the trend
Most oilfield service companies saw declines in their workforce through the downturn, but CES has largely bucked the trend. While they had a bit of a dip in the start of 2015, they’ve grown since.
“We obviously had some reconfigurations and moved staff from one spot to another, decreased the number of people on the trucking side of things. But late in 2014, we were at probably 150 employees in Saskatchewan, and now were’ at 210 to 220 across all of Saskatchewan and Manitoba,” Lothian said.
In all, the dip was 10 per cent or less of total staff members. Some well-timed maternity leaves helped, too, he said.
In 2014, as things were booming, the mud shop was reconfigured. The original building had been added onto three times prior to the reconfiguration. “We were obviously impacted as the number of drilling rigs in the area dropped. We were really fortunate, especially on the mud side of things, and had a couple of guys that went off to other careers fairly early, a couple layoffs we were able to avoid. The next downturn, as things were slowing down, we were really fortunate to have all the growth happening over at PureChem. We were able to move people internally from the mud side of things over to PureChem,” Lothian said.
Like other companies, they have run their equipment longer, from computers to trucks.
Last year was a little busier on the drilling fluids side, as more rigs went to work. This winter, as that rig count has grown, they’ve had staff willing to put in extra work during the busy drilling season. That includes staff from the office going out to check rigs.
As with pretty much every sector in the oilpatch, the rates oil companies were willing to pay saw several rounds of cuts. They saw that as well. While the price of oil has improved, most sectors also have not seen a recovery on their rates. To that end, Lothian said, “We really went into the downturn with our customers wanting (us) to be a partner with them to help them get through those times. We probably made changes sooner than some of the larger companies did to be able to help our customers in those times. Because of that, I don’t think we’ll want to be the first ones to go to them and say, ‘Hey, you know we need to put our prices up. The price of oil is obviously not what it was when we set the pricing.’
Noting there’s still some uncertainty on oil prices, and how that will impact service companies, Lothian said, “I think we have to take our customers’ word that they will work with us on that as we did with them. Hopefully there’s some loyalty for the things you did.”
