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Level Best granted patent

Focus on efficiency
Level Best
Dave Gallaway is president of Level Best Technologies Ltd.

Estevan– Dave Gallaway, president of Level Best Technologies Ltd., got some good news in mid-January. His patent for a new compressor design had just been approved. Now he’s going to develop the prototype, and eventually seek to commercialize the design.

Compressors have been a bright spot for the firm, which specializes in well optimization.

“In our business, different parts pick up when it slows down,” Gallaway said. Thus, there has been more interest in their electrically-driven, skid-mounted compressors. Those units lower annulus gas pressure, pumping the gas into the flowline. The reduction in pressure downhole makes it easier for fluid to flow into the well.

When it comes to increasing efficiency with limited dollars to spend, well optimization is definitely an option.

“It costs money to drill new wells. If you’ve got a well with a pumpjack on it, a flow line to it, and a guy checking it, adding another barrel per day makes you money,” Gallaway said.

“It also has a cost, and their cutting all their costs,” he said of oil companies. Thus, some are having their own operators do fluid levels instead of contracting third party companies, like Level Best, to do the work. But that in turn has resulted in more equipment sales and repairing equipment the oil companies already had.

“I’d rather have my guys do the work. When things get busy again, their operators won’t have time to do optimization work. Mine will.

“For us, we’re cruising along, a little slower, but business as usual,” he said.

That includes keeping all their staff, but one part-time person has had reduced hours. Conversely, they added a part-time –person in Manitoba which allows for a reduction in mileage charged to the client.

“He was a casualty of the slowdown. He was previously a foreman,” Gallaway noted.

Level Best has two full-time field staff, two part-time field staff, and one part-time office person in addition to Gallaway himself.

“With a well, it all comes to economics. If they can optimize the well to keep it economical, they will,” he said. “Part of the economics of the well is the cost. If you can decrease your costs, you can run it longer. It’s not always to get another barrel.”

For instance, slowing a pumpjack by one stroke per minute reduces the wear and tear of that pumping unit by 500,000 cycles per year. “Less wear is a huge one,” he said.

As well, there can be lower electrical costs.

Companies that are planning on hanging around might find shutting in wells is a perfect time to do reservoir well data collection.

“Shut-in the well, do a pressure build up, and it gives you reservoir data – bottom hole pressure, permeability and skin,” Gallaway said. “When they want to drill another well, they have all the data from the area. Or they can fine-tune a flood – water or CO2.”

“There’s been a lot of wells not being repaired,” Gallaway said. That means more service rigs are parked.

Now that a lot of wells are shut-in, it’s also an opportunity to get static pressure readings, he added.

Some companies are looking at abandoning old vertical well, i.e. stripper wells with less than five barrels per day production.

Their phone isn’t ringing off the hook but it is ringing. They still have their regular customers they go out for every week, but they’ve cut back on the amount.

Compressor packages have been a pleasant surprise, but some of their parts are sourced out the United States, and with the Canadian dollar’s value against the Greenback in freefall, there’s an impact.

With oil trading in the US$28 range that day, Gallaway said, “I’m hoping we’ve reached the bottom. It’s got to be affecting production.”

For 2016 he expects to see more of the same, including cost-cutting by everyone.

Will they be able to survive?

“I have pretty low overhead. It would be a good time to expand, if I were inclined,” Gallaway responded.

His peers in Alberta are hurting, Gallaway noted. “They don’t know what they’re going to do.”

One company there shut down their optimization division.

Despite all the turmoil in the industry, Gallaway is pumped, as it were, with new developments for his business.

“I have a line of downhole gauges now,” he said, adding they can be rented out. His son works as a programmer for the company that makes the gauges.

It’s not a huge revenue-generator, but something to add to the toolbox, he noted.

There is the aforementioned patent application going through, and Level Best is now looking at expanding its offerings in another area.

“I’m negotiating with a large automation company to offer pump-off controllers, variable frequency drives and other automation products.”

Those are other ways to optimize wells, he explained.

Gallaway’s had his eye on this sort of product line for a while now. “I’ve been looking at something like this since I started my company,” he concluded.