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00:00:00 Speaker 1
This episode of the Energy Pipeline is sponsored by Caterpillar Oil and Gas. Since the 1930s, Caterpillar's manufactured engines for drilling, production, well service, and gas compression. With more than 2100 dealer locations worldwide, Caterpillar offers customers a dedicated support team to assist with their premier power solutions.
00:00:27 Speaker 2
Welcome to the Energy Pipeline Podcast with your host, KC Yost. Tune in each week to learn more about industry issues, tools, and resources to streamline and modernize the future of the industry. Whether you work in oil and gas, or bring a unique perspective, this podcast is your knowledge transfer hub. Welcome to the Energy Pipeline.
00:00:52 KC Yost
Hello, everyone, and welcome to this episode of the Energy Pipeline Podcast. Our guests for this episode are Bill DeGraeve, Director of Drilling, and Dave Terrill, Assistant Director of Drilling at True Drilling out of Casper, Wyoming. We'll be discussing the history of True Drilling and the evolution of drilling over the years. Hey, guys, welcome to the Energy Pipeline podcast.
00:01:14 Dave Terrill
Thanks, KC.
00:01:14 Bill DeGraeve
Hey, good afternoon.
00:01:18 KC Yost
Glad to have you guys here. Before we get into our discussion, each of you take a few minutes to tell our listeners about yourself. Bill, why don't you go ahead and start. Tell us about yourself.
00:01:27 Bill DeGraeve
Sure. Thanks, KC. Bill DeGraeve, Director of True Drilling. I started in the oil industry back in 1980, so I've got 40 some years in the industry at this point. All my career has been in the oil industry, production, reservoir drilling work, and some large projects, not only in the United States, but also around the world a little bit. Have just really enjoyed all the challenges that the oil industry have offered me. In 2017, I came back for a second time to the True companies, and joined them as the Director of True Drilling.
00:02:04 KC Yost
Sweet, sweet. Good to know you're only a few years younger than me. That's good. That's good. Hey, Dave, tell us about yourself, please.
00:02:13 Dave Terrill
Yeah, Dave Terrill, Assistant Director of Drilling. I've been in the industry 30 plus years. It's my second time back at True Companies as well. I came back in 2017 for a second go. I've always been on the drilling side of it. I worked for several different competitors, and I'm glad to be here today.
00:02:37 KC Yost
Oh, super. Well, glad to have you guys here, so thanks very much. Thanks very much. In preparation for this podcast, I started looking at websites, and LinkedIn and this, that, and the other, and True Companies kept popping up all over the place, and very interesting stuff. You guys aren't just into drilling. You've got a lot of other businesses within the True Companies banner, right? I guess that's for you, Bill.
00:03:05 Bill DeGraeve
Oh, thanks. Absolutely.
00:03:07 KC Yost
The old guy. Yeah.
00:03:10 Bill DeGraeve
It's a pretty impressive suite of companies. I'll kind of run us through the history of it all. Back in 1948, which means True Drilling is now 75 years in business, back in 1948, the patriarch and the founder of it all had an opportunity to buy a portion of a one rig drilling company, and he took that opportunity. Then he had the opportunity to buy more of that drilling company, and he took that opportunity. Then a couple years later, he had the opportunity to buy out that entire company, and he owned it himself, and it became True Drilling. That was the founder and founding company of all the True Companies. As he progressed that business, he found himself in much more than just the drilling industry. He became an oil and gas explorer. He became an owner of Pipeline Systems. He became an owner of a supply company, a trucking company, and just started building businesses around the oil and gas industry, partly for need of his own company, but partly because they could serve the industry as well.
00:04:23 KC Yost
If you don't mind, it's kind like vertically integrating, but being an entrepreneur, because I need to be an entrepreneur to make my company grow. Got it. That's cool.
00:04:33 Bill DeGraeve
Yeah. One of the things that he concluded early is that if he could be the middleman to all of his operating companies, he could eliminate a piece of that profit and keep it for himself. He just built several companies along the way.
00:04:46 KC Yost
Great.
00:04:46 Bill DeGraeve
True Companies, now, under the umbrella is 11 operating companies, one of which is True Drilling, and we operate in 11 states around the United States.
00:04:57 KC Yost
Are you primarily up in the Northwest, or in the Rockies, or are you all over the United States?
00:05:05 Bill DeGraeve
We're primarily a Rocky Mountain company, but we do have operations in the Gulf Coast area, Mississippi, Louisiana, Texas.
00:05:16 KC Yost
Yeah, very good. Very cool, very cool, very cool. Let's talk a little bit more about the history of True Drilling. I'm sorry, I'm sorry. Let's talk about the evolution of rigs, Dave.
00:05:32 Dave Terrill
Okay. No, I'd be happy to. We had quite a good-sized fleet of mechanical Kelly rigs for some period of time up until probably around 2010, 2011. Then we built our first electric rig. It was a DC Electric rig, Rig 36, and then a couple years after that, we built a AC rig, our first AC rig, which was Rig 33. Since then, we have added several rigs. We are currently on Rig 41 in operation, which is down in Colorado, and they're the state of the art, all the bells and whistles on these rigs, and they're super spec rigs. It came a long, long ways.
00:06:22 KC Yost
We did a podcast a few weeks ago with a guy that runs PSC, Producer Supply Company, and he was talking about the productivity of rigs and that type of thing. I think we're going to get into the technology later on in our visit, but that's what we're talking about here, where the productivity is to the point where it's just unbelievable, light years ahead of where we were even 10 years ago. Is that the rigs that you're describing there?
00:06:56 Dave Terrill
Yes, that's correct. Just with the latest jump in evolution, we are drilling more wells now with one rig on one pad than it would take several rigs to do. For example, we just drilled a 32 well pad down in Colorado. The wells go out every which direction. There's just not the need for as many drilling rigs as there used to be with today's improved technology.
00:07:24 KC Yost
Outstanding, outstanding. Now, True Drilling is a family company, right? We've got some pretty strong family values that goes along with the company, Bill, right?
00:07:38 Bill DeGraeve
Yes. Family owned company for 75 years, never sold, always been in the family. We're now allowing or helping the third generation of family members get involved in the company. The patriarch, his three sons, and now those sons' children are starting to get into the business. They're doing a really good job of carrying forward the family values. Let me tell you a little bit what I mean about their family values. True Drilling has 150 employees. The True Companies have over a thousand employees. That's a pretty significant size company.
00:08:21 KC Yost
It is.
00:08:21 Bill DeGraeve
If you listened to any of the family members talk about their companies and their values, I think this is what they would say is it's not about the equipment that they're capitalizing and paying for. It's about the people who operate that equipment. They would say anybody could buy a drilling rig. Drilling rigs are rather expensive, so not everybody can find the pocket change for that, but not everybody can staff one up and operate it as well as True Drilling can. That's the family value that we enjoy is that they really have confidence and faith in their employees.
00:09:00 KC Yost
Two things I hear in that conversation, one, to be congratulated. I think business school teaches you that normally, family owned companies don't survive the second generation, so how exciting that you've made it to the third generation. I think that's fascinating. The other thing is the family value that you're talking about there. It's almost like true servant leadership where, what do I need to do to help you be as successful as you can be, when you're talking about staffing a rig, and getting the right people out there, and make it happen? Am I on the right track here with that?
00:09:42 Bill DeGraeve
Dave, you want to take it?
00:09:43 Dave Terrill
Yeah, you are. KC, we run by the 10 principles of the Cowboy Ethics, and that's how we conduct our business. Two that stand out in my mind is take pride in your work, which all of our employees do. They're very proud of what they do. We actually had an employee on Rig 41, which I mentioned earlier, that was so proud of what he does in his role that he went home and told his mom about it. Well, it ended up that True Drilling and this gentleman got a little newspaper article written up in the Powell Tribune, so that's pretty cool.
00:10:20 KC Yost
Sweet.
00:10:21 Dave Terrill
The second principle that I'd like to bring up is Ride for the Brand. The True family treats their employees very well, very, very well, and in that, they get all of our loyalties. It goes both ways. It's a give and take relationship, and it just makes you overall very proud to be with True Companies.
00:10:43 KC Yost
Excellent, excellent. I like that cowboy ethics pitch. I think that's pretty cool. I like that. Well, you guys are in Casper, so it makes perfect sense that you would have that brand. Goals, you guys have been around for 75 years. You've got to have some goals. What you had in 1950 are different than what they were in 1970, which are different in 1990. The goals have always evolved, haven't they? Taking care of customers, and taking care of your employees as the core, but still, your goals have changed, right, Dave?
00:11:27 Dave Terrill
Yes, and we have to be very fluid with our customers. We develop a partnership with our customers, and with that, technology and our rigs have changed. We've got the natural gas or the capability to run off of natural gas, the DGB, Dynamic Gas Blending system, that Cat has helped develop, and the ESS, the Energy Storage Solution, which Cat has also developed, has really helped our customers not only reduce emissions and save on diesel fuel, but just minimizes the whole green footprint.
00:12:08 KC Yost
Yeah, emissions control has really become a strong buzz phrase in the industry, hasn't it?
00:12:15 Dave Terrill
Sure has.
00:12:17 KC Yost
It doesn't matter whether you're talking about NOx, whether you're talking about CO2, whether you're talking about methane release, and all of that kind of stuff. It really comes down to emissions control. You guys have got a pretty strong handle on that, I guess.
00:12:30 Dave Terrill
Yes, and in some areas, KC, we're running off of Highline power, so that was new to us a couple years ago, but it no longer is.
00:12:40 KC Yost
Good. We talked earlier about the advancements in the drilling rigs, Bill, so tell us about the trends in well efficiency. How were you able to use one rig to, what did Dave say? Drill 36 wells off of one pad?
00:13:01 Bill DeGraeve
That in itself is a pretty remarkable feat. The evolutionary change that took place about 20 years ago, 15, 20 years ago in the oil and gas industry is the development of what we call shale place, or non-traditional oil reservoirs. It allows us to drill horizontally through these reservoirs. You can imagine if you have just a vertical well, and the reservoir is only 60 feet deep, you get 60 feet of exposure to that reservoir. If you can go horizontal in that reservoir and get one, two, three miles of exposure to the reservoir, you can increase the productivity of that well multiple times. That's what the industry is doing these days. The primary type of drilling we do is horizontal drilling. That's also allowed another innovation, which is, as Dave said, multiple wells on a single pad, because we can have an array of wells at the surface, but those bottom hole locations are spread out for miles around that surface location, allowing us to expose more and more reservoir than we ever have before.
00:14:13 KC Yost
Yeah. I'm sorry, go ahead. Go ahead.
00:14:16 Bill DeGraeve
No, that was it. Take it away.
00:14:18 KC Yost
I was just thinking, I graduated college in 1976, and my father was working for a gas company back in West Virginia, and I wanted to be a pipeliner. I wanted to work in the energy industry. In 1976, his company was saying that we were going to run out of natural gas in the United States in 10 years. By 1985, we were going to run out of natural gas, but technology like this is what has allowed you and me to be in the industry for 40 some odd years. Now, we have come up with these efficiencies of scale and technology to make these things happen, right? It's made the United States the energy leader that it is. Anyway, just sidebar, sidebar, I was supposed to be out of the energy industry 45 years ago, according to my father. Anyway...
00:15:17 Bill DeGraeve
You can never leave it. It always comes back.
00:15:20 KC Yost
It always does, it always does. There's a challenge in this process when you're looking at the technology and the work that we're talking about, balancing performance, and power, and sustainability, right, Dave?
00:15:37 Dave Terrill
Yeah, I mentioned it a little bit ago, but the main power plant for the rig and the generators, in certain areas, some of that natural gas that we used to burn off or whatnot, we can regenerate back into the DGB and ESS systems. As Bill mentioned, those wells are just getting longer. We're drilling four-mile laterals in North Dakota now, which is incredible.
00:16:00 KC Yost
I'm sorry. I'm sorry. What did you say?
00:16:03 Dave Terrill
Drilling four-mile laterals in North Dakota.
00:16:05 KC Yost
No kidding. All right, sweet.
00:16:08 Dave Terrill
The bar keeps getting set higher for us.
00:16:11 KC Yost
That's impressive, impressive. Okay, sorry, I didn't mean to interrupt you. Go ahead.
00:16:18 Dave Terrill
To further discuss the technology advancements for the future, we have started to see robotics on the rig, where you can eliminate having employees in what we call the red zone, where the pipe is moving quite a bit. We already have in place an automation program that helps the driller control how fast he can trip the pipe out of the hole, how fast they can make a connection, and how fast they can get back on bottom, and it improves the consistency. If you have a difference between certain drillers, that evens the plane out. That benefits our customers, because we're not tearing the bid up, and we're just keeping that wellbore as good as it can be.
00:17:08 KC Yost
I got you. Okay, so that's great from a technological perspective. Bill, let's touch on global demands and regional demands. You guys, you say that you're basically in the Rocky Mountains, and you've got some stuff in the Gulf Coast, but you've been around the world. What do we see from that perspective, the performance, power, and sustainability question, if you will?
00:17:35 Bill DeGraeve
Yeah, and I'm going to touch on that maybe in a different way than you might've posed the question, but Dave also mentioned this, but the world today is producing more oil and gas than we ever have, and the same goes for the United States. We're doing that with less wells, less rigs, and less wellbores being drilled each year. That just is a tribute to the industry and the innovative technology that we've introduced to make these wells more productive, and back to your point, more sustainable. One of the things I'll mention is oil and gas commodities are really valuable to the world economy. There can be some debate about whether we can ever replace oil and gas, but in my mind, we need oil and gas not just as fuel, but also as a feed stock to other manufacturing processes. I don't see the need for oil and gas going away, but what I do see is the need for us to make sure that we're an ever-competitive industry against other energy sources.
00:18:43 KC Yost
I think that the technology allows us to be really quite competitive, and it also allows us to have a very small footprint, if you will, from an environmental perspective. You're not setting up 16 drill pads to do 16 wells. Now, you're doing, I think Dave said, 36 wells off of one well pad. The footprint, square footage versus energy derived from that location, is significantly higher than it was just a few years ago. That's pretty impressive, pretty impressive. Back to technology, so Dave, pivotal technology shift that makes a difference for inaudible hole drilling, or have we been touching on that as we go through our conversation?
00:19:38 Dave Terrill
Been touching on a little bit, but the big technical pivotal point, I do believe, is rotary steerable drill bits that are helping us drill horizontally, and we're able to steer around certain zones that we don't want to be in. There's been some equipment technology that has definitely improved, such as top drives, which controls the drill string as well. We have certain drilling programs that will remember the zones that are difficult, where it automatically speeds up our drilling or slows down on our drilling automatically.
00:20:16 KC Yost
Very cool. Very cool. Bill, does Cat play a part in adapting to these changes that we're talking about, with the efficiency and the technology?
00:20:26 Bill DeGraeve
Hang on just a second. I had a phone call coming in on my regular landline. Am I back now? Your question was, does Cat play a part in some of this technology and advancement? I'm going to go back a little bit and touch on something that Dave mentioned. We're a 24/ 7 operation, from the time we move onto a location to drill those 32 wells, once that rig is in operation, we don't stop until the job is done. All 32 wells were drilled, and in that case, it was five months or so of continuous operation on that location. That means we've got to have energy on location all the time. If we're using diesel driven generators, then Cat is the supplier of those. Another thing that I'll touch on is Dave mentioned four mile-long laterals. When you drill out that far, you need more pressure from the mud pumps, you need more lifting capacity from the rig, you might run into more torque and you need more energy. That energy is something that we need on demand. Caterpillar's equipment has always been there for us, providing that energy, and even more on a drilling rig today than 20 years ago. Yes, Cat's right along with us.
00:21:51 KC Yost
Good, good. That's good to hear, good to hear. Since they sponsored the podcast, it's good that you're happy with what they're doing.
00:21:59 Bill DeGraeve
Absolutely.
00:22:00 KC Yost
Yeah. We've been talking about the past and the present, so let's look into the future a little bit. What do you guys see happening for True Drilling and for the industry, if you will, in the next 10 years? What advancements do you see for the company as well as for the industry? Dave, you want to go first?
00:22:26 Dave Terrill
Sure. Well, I think that I kind of foresee, we want to maintain our drilling rig fleet, our super spec rigs, and continue to reduce emissions. As Bill said, Cat has been there with us, right along with us for the ride, and they'll continue to be right there with us in future developments. I'm not quite sure what's going to come at us next to reduce emissions, but I think together that we'll definitely figure it out through our partnership.
00:22:56 KC Yost
Cool. Cool. Bill, you have some thoughts?
00:23:00 Bill DeGraeve
I like what Dave said. We don't really know what's coming at us next. That's not because we're naive, it's because this is an ever-changing industry with huge challenges every day. Dave and the rest of the team at True Drilling, that's what they like. They like challenges, whether it's mechanical challenges, electrical challenges, or just what it is. The biggest objective that we've got going forward is the same as it's been for 75 years for True Drilling. It's having the right equipment that the customer wants and needs to drill their wells, and having the best people we can hire to manage and operate that equipment. With those two things in place, we can meet all the challenges that the industry's going to throw at us.
00:23:48 KC Yost
Excellent, excellent, excellent. Well, congratulations on the 75-year anniversary. Fun question that's popping into my head. What'd you guys do to celebrate? I turned 70 last month, so I've got five years to plan this. What'd you guys do for your 75th birthday?
00:24:05 Bill DeGraeve
Dave?
00:24:06 Dave Terrill
That's for you. You're the party planner. You know all about it.
00:24:11 Bill DeGraeve
It is an interesting question and a fun question, KC, because the family really had fun with this 75th anniversary. They made it a point to get around to all of our primary customer bases, Denver, Oklahoma, Houston area, and those places where we have a core group of employees, like North Dakota, Colorado, Wyoming, and we just pulled our customers and our employee base into one year-long celebration in multiple places. We're typically a pretty quiet and humble company, but they let go of that last year, and just had a really good time celebrating 75 years.
00:24:54 KC Yost
Sweet, sweet. Do you got any stories you want to share?
00:24:59 Bill DeGraeve
inaudible-
00:24:59 KC Yost
It was a rhetorical question. I know you don't want to answer it. No, we'll move on. We'll move on. All right. Well, we've covered about everything I can think of. Is there anything else you guys want to add? Something that I might've missed in our conversation about True, and about the industry, and how things are going?
00:25:17 Dave Terrill
I think I would just like to say, again, we want to thank Cat for their partnership and the opportunity to be here on this podcast today.
00:25:26 KC Yost
Oh, sweet. Thank you. Well, we were tickled to have you guys here. All right, so again, thank you guys for taking the time to visit. We appreciate it very much. If anyone would like to learn more about True Drilling and all the good work that they're doing, and maybe some photographs of the 75th anniversary party, you can find them on the web at TrueDrilling. com. That's TrueDrilling. com. Thanks to all of you for tuning into this episode of the Energy Pipeline Podcast, sponsored by Caterpillar Oil and Gas. If you have any questions, comments, or ideas for podcast topics, feel free to email me at kc.yost@oggn.com. I also want to thank my producer, Anastasia Willison-Duff, and everyone at the Oil and Gas Global Network for making this podcast possible. Find out more about other OGGN podcasts at oggn.com. This is KC Yost, saying goodbye for now. Have a great week, and keep that energy flowing through the pipeline.
00:26:28 Speaker 6
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