B&G Oilfield Services celebrates its 50th anniversary and relies on its decades of experience to make the most of the latest downturn.
It’s a birthday party for B&G Oilfield Services, and a big one at that. With roots running deep in the Bakken Shale play, the company is in the midst of its 50th anniversary celebration.
“Initially and traditionally, we’ve always been a midstream oil and gas servicing company,” says John Baltes, executive vice president of North Dakota operations. “That’s been our sweet spot, and that’s where our customers have been.”
When the going was good, the Williston, North Dakota-based company capitalized right along with so many others. From quarter one of 2014 through most of that year, the growth was tremendous. “People were flocking from all over the country to come here and see what it was all about and to chase opportunity,” Baltes says. “When things were crazy and we were growing, it was relatively easy to make money.”
Now, however, the price that B&G can charge for its services is down right along with the price of oil. As a result, efforts to add efficiencies, reduce costs and find new routes to success have been ramped up. As a company with half a century of experience under its belt, it only makes sense that B&G and its people know a thing or two about the cyclical nature of the business and how to make the most of the good times and the bad.
FINDING OPPORTUNITY IN DOWNTURN
In fact, Baltes argues that the latest downturn has actually benefitted the company in a number of ways — and he makes a good case. New roads, infrastructure and plenty of added prospects were paved right along with the 2014 oil boom, and B&G has made a point of continuing to capitalize on those opportunities.
“If I’m an HDD rig, I don’t care if I’m pulling pipeline that’s going to carry water or gas or sewer or electrical,” Baltes says. As a result, the company began to take on customers that extend beyond just the oil and gas industry. “So what we’ve seen both out of opportunity and more recently out of necessity is not only customer diversification but also industry diversification.”
Honing in on human resources has also proven advantageous. When the industry cooled off, a lot of companies left the area and many good workers were left without jobs. B&G was savvy enough to spot it as an opportunity. “That allowed us to snatch up a lot of talent,” he says. “So we were able to trade up our talent pool, if you will.”
Director of human resources and safety Pat Bertagnolli says the company prides itself on its strong team of workers. “We’ve got employees who have been here as long as 18 years,” he says. “We’ve got a solid military presence of folks who’ve served our country, and we’re very transparent and big on communication.”
It helps that Bertagnolli has a fantastic working relationship with the director of Job Service North Dakota, which allows him to keep a finger on the pulse of labor pool hiring trends. But a strong company culture has been a big boon to recruiting efforts, too.
“We learned a long time ago that birds of a feather flock together,” Bertagnolli says. “I would say that traditionally most folks out here have had a very hard time recruiting people in, but with the culture that we’ve built here at B&G, our people find people.”
Yet another upside that has stemmed from the sluggish oil prices has been the decision to cross-train some of the company’s most talented employees in an effort to do more with less.
Even though there are several separate company divisions, Baltes explains, when people start to work in other areas and get exposed to leadership in other divisions it begins to breed a culture of confidence.
“I think everybody agrees that this downturn is temporary,” Baltes says. “It will recover. Oil prices will stabilize.” And the single cheapest way to get oil or gas downstream to the refineries is not rail and it’s not truck. “It is and will always be pipeline. The pipeline companies know that, and the operating companies know that. So pipeline is going to continue to go into the ground.”
B&G features six main service divisions: well site maintenance and construction (roustabout division), pipeline construction and repair (pipeline division), pipeline inspection and condensate removal (pigging division), hydroexcavation services (hydrovac division), utility, well site locations and pipeline locating (line locating division), and horizontal directional drilling (boring division). In addition, a full human resources and safety team, a maintenance shop and a welding shop round out the company.
It’s that breadth of offerings that helps set the business apart, according to Baltes. “We compete in a lot of those spaces, but there are very few companies up here that offer all of those,” he says. “It’s one-stop shopping, if you will.” And it’s a setup that bodes well during a stretch of time when customers are cutting costs wherever possible.
In the past, there was such a supply and demand mismatch that all sorts of fly-by-night companies came in to take on the work, he explained. Once the market cooled, however, companies cut their budgets, became much more selective with their projects, and started scrutinizing every penny spent along the way. As upstream companies tightened budgets in order to make ends meet, that obviously rolled downstream to B&G, Baltes says, but he’s also quick to point out that with every challenge comes opportunity.
“These companies are looking for highly technical, well-trained, good-safety-program companies that have multiple service offerings and can bundle and package all of that together with the proprietary IT system and billing,” he says, which puts B&G in an excellent position. “They don’t have to worry about outsourcing the hydrovac to one company, and the horizontal directional drilling to another company, and the pigging to another.”
The interesting dynamic is that in several cases entire company divisions sprouted out of nothing more than a single request from an existing customer. “I think it’s that approach that has really allowed us to continue to be successful and to grow and to diversify our customer base,” he says.
START TO FINISH SERVICE
When a company intends to install a pipeline, one of the very first steps involved is to provide notification so that everyone with an existing line along that proposed route — water, sewer, electric, fiber, gas, other oil pipelines, and so forth — will come out and mark their existing infrastructure that’s beneath the ground.
“That’s also one of the service offerings that we happen to offer,” Baltes says.
What began 15 years ago with one truck has since evolved into a full fleet of 14 Vactor HXX hydroexcavators.
“All of our hydroexcavating machines are made by the same manufacturer,” Baltes says, and that’s a company philosophy that leads to a variety of benefits. Each of the operators can go out and work on any machine, all of the maintenance technicians can work on each piece of equipment with a sense of continuity, and the inventory of parts kept on hand can be reduced as well.
Once that work has been completed, the horizontal directional drilling team can come in and pull new pipeline in underneath the existing utilities. To handle this work, B&G relies on five Vermeer bore rigs — three 60x90s and two 36x50s — as well as Cat 420 backhoes, Kenworth water trucks and Dodge 5500 crew trucks.
“That’s why we have a unique value proposition for a lot of our customers because we can do the utility locating, we can do the hydroexcavating, and we can turn right around and do the horizontal directional drilling,” he says. “And by the way, once the pipeline is complete and in service, we can do the pigging for you.”
As B&G has worked to become an even more efficient company, Baltes says, it has allowed the business to thrive in the current environment, but what’s really exciting to consider is the next market uptick. “When things take off again we’ll have the discipline and processes in place to be that much more profitable,” he says. “I love the position we’re in, and I love where we’re headed.”
Anything but boring
B&G sees something special in its fleet of Vermeer directional drills, which includes three 60x90s and two 36x50s, and it doesn’t hurt that they are one of the company’s highest profit margin service offerings.
“Our horizontal directional drilling machines are just really cool pieces of equipment and I think essential for what we have going on out here,” says John Baltes, executive vice president of North Dakota operations.
They’re sophisticated pieces of equipment, and in order to be considered a foreman on one of the company’s HDD machines there’s a gradual progression through several different positions that employees need to go through. “So for the operators there’s a healthy appreciation for what the equipment can do,” he says.
An interesting aspect of these machines is the relationship they create between the operator and the work that’s carried out, noted Baltes. A pigger puts something inside a pipeline and then grabs it at the other end but cannot see what’s going on in between. A utility locator marks lines that are beneath the ground but cannot physically touch them.
“The HDD operators, on the other hand, receive immediate feedback on their work,” Baltes says.