Natural Gas-Powered Frac Operations

[00:00:00] Josh Lowrey: Welcome to the Energy Pipeline Podcast. My name is Josh Lowrey. We are coming to you live from the Upright Digital Studios at Prange & Associates office in Houston, Texas. Um, we are... I am joined by two gentlemen today. This is a great podcast. I, I have a great story for the audience here in a minute, but before I get to that, let me introduce these guys.

[00:00:20] Josh Lowrey: We have Dallas McCauley, who is the vice president of Canadian operations with Step Energy Services. Dallas,

[00:00:27] Dallas McCauley: you gotta

[00:00:27] Josh Lowrey: say your name. Good day.

[00:00:28] Dallas McCauley: They gotta hear the- Yeah, Dallas. Yeah, glad to be here. I'm actually disappointed that you bragged up these pink shoes- Yeah ... on your, on your, uh, podcast with Andy, and I was, I was expecting to see them today.

[00:00:38] Dallas McCauley: So I have pink socks. Yeah, that's good. Yeah, I like that. I like that. But that- So that's the

[00:00:42] Josh Lowrey: episode he was on, was the Valentine's episode then. Yeah, totally. Yeah. All right, Dallas got... Dallas is coming in hot here, folks. And then, uh, Nathan Getchell, who is the director of asset management manufacturing with Step Energy Services.

[00:00:56] Josh Lowrey: Yes. How are you, buddy? Yeah, appreciate you guys having us on. [00:01:00] So do we... If... Audience, if we sound like we are electric and that we've been talking for perhaps nine minutes- ... and we are warmed up, there's a reason for that. Dallas, why don't you tell the audience why you are so comfortable? Is this your first podcast?

[00:01:14] Josh Lowrey: This is my

[00:01:15] Dallas McCauley: first podcast. Why do you sound so comfortable on your first podcast? Well, the heart rate was going about 600 and we've calmed down to normal, n- normal operating temperatures, parameters. So yeah, the... It was just a, it was just a, "Hey, nine minutes of no recording and here we go. We're live now."

[00:01:28] Dallas McCauley: You know, it... That's right. Well, we...

[00:01:30] Josh Lowrey: I thought we were live. We had a technical difficulty. We got nine minutes in, we realized we had a technical difficulty and we started over. Do you know why? It's 'cause we're pros and we can just- We bounce back ... bounce back. We did solve... So we're gonna... Audience, ev- the audience knows I'm the greatest podcast host of all time.

[00:01:47] Josh Lowrey: And we had a question on the first nine minutes that we are gonna ask again and see if the audience knows, because we solved it in that interim break here. These guys are Canadians, which everyone knows is my favorite town [00:02:00] to do business in oil and gas. Love Calgary. I've enjoyed going up there for my entire career.

[00:02:05] Josh Lowrey: There is, um... One of the things Dallas is saying is how great it

[00:02:09] Dallas McCauley: is to do business downtown. Yeah, there's, there's... The core of Calgary is connected through the Plus 15. And, you know, with our harsh winters, our environments, we can, we can literally walk inside to go meet our, our vendors, our clients, have a coffee, have a beer, stay warm, don't have to put the parka on, and we'll go back to work.

[00:02:26] Dallas McCauley: Parka. We do not have parkas in Texas. Yeah, so when our, when our US team comes up for board meetings, um, sometimes we'll just maybe be out a little bit later than we should be, and they gotta take in the harsh winter. Before they're waiting for their Uber, they're walking back to the hotel and they're, they're freezing, uh, they're freezing their tail off.

[00:02:41] Dallas McCauley: Yes.

[00:02:43] Josh Lowrey: And then so we were calling it the, um... You called it the Plus 15. Plus 15. Plus 15, right? Plus 15. Or that's what they're called is the Plus 15s. Yeah, correct. Yeah. And I said... And I thought I knew why they were called Plus 15s Uh, Nathan said, "Well, they're 15 feet up." Yeah, pretty sure it's floor one and a half.

[00:02:59] Josh Lowrey: Well, yeah, that's [00:03:00] right, four- floor one and a half. And I was like, "I think it's 15 feet up." And we've solved it. That is what's going on. These are the f- they're 15 feet up, which would make sense. A floor and a half, halfway up. That's... And if you kinda go to Calgary, it- they litter all over town, and you can run between buildings.

[00:03:15] Josh Lowrey: E- every tower is interconnected. I love it. It's awesome. I love it. The negative is that it- the sun doesn't go down early enough, and you can just- In the summer. In the summertime. We're getting- That's right. We're getting to that point.

[00:03:27] Dallas McCauley: I- we were sitting at, at a friend's last night, and it was 8:00, and it was dark.

[00:03:30] Dallas McCauley: And, and then I FaceTimed the family, and it was still light at home. So it's getting to be that great season to be in Canada. The, the summers in Canada are wicked. Great time to be outside. Sun's still up at 10:30, 11:00, so you can be finishing 18 holes- Oh my gosh ... after work, coming in, and, and the sun's setting on the 18th hole, and it's just a great place to be.

[00:03:47] Dallas McCauley: You know, Dallas, this

[00:03:50] Josh Lowrey: may not be the place for me to live when you say it like that because- ... I need, I need the, the world to tell me when to go to bed. Oh, I'm the same way. Yeah, yeah. I [00:04:00] need something to say, "Go to bed." Yeah. It's, it's not the Canadian summer, then. It's not me. It's not going to be me telling myself to go to bed.

[00:04:06] Josh Lowrey: It's the sun going, "It's... Josh, it's time." Yeah. Yes.

[00:04:09] Nathan Getschel: Un- unfortunately, with the winter, though, you don't get to see the sun, so

[00:04:12] Josh Lowrey: it's the opposite. Is it just dark

[00:04:13] Nathan Getschel: all

[00:04:14] Josh Lowrey: winter long? I really

[00:04:14] Nathan Getschel: don't recall much- Not, not quite ... winter up there. But you don't leave the office, so it's, uh... Yeah, by the time you leave the office, it's dark.

[00:04:19] Nathan Getschel: By the time you get there, it's dark, so.

[00:04:21] Josh Lowrey: So I, I need to go... I got your titles here, but I wanna kinda hear this real quick. So director of asset management and manufacturing. We talked a little bit off-air about what manufacturing... Manufacturing means to me is machining, forgings, castings, et cetera. Yes, sir.

[00:04:35] Josh Lowrey: What is machining, or excuse me, manufacturing. What does manufacturing mean to you- Yes ... uh, Nathan?

[00:04:40] Nathan Getschel: Yeah, so for, in, in my role currently, it, it's, it's really overseeing everything that's... all things assets at the end of the day. Um, so that's where typically we'll third-party a lot of our manufacturing, uh, assembling much of our components together.

[00:04:55] Nathan Getschel: Um, so my position will look after how, how we design that, [00:05:00] s- set that as a standard, um, make sure it works for operation, is, is reliable at the end of the day. And then, uh, yeah, out, outside of that, really evolves into our capital and R&M plan, managing and overseeing that side of it, so. And again,

[00:05:15] Josh Lowrey: off-air, we were talking about, um, how just managing suppliers, people of, I mean, Caterpillar, for instance.

[00:05:23] Josh Lowrey: Pe- your, your job is to pick the ones that I would say don't give you the headache

[00:05:28] Nathan Getschel: Yeah, try to. Try to.

[00:05:29] Josh Lowrey: For the most part. Yeah, I mean, everyone's gonna give you a headache at some point, right? Yeah. Manufacturing is manufacturing.

[00:05:33] Nathan Getschel: Yeah. Least, least amount of headache with, uh, obviously- Best, best solution for the headache.

[00:05:37] Nathan Getschel: Yeah. Yeah. Yeah, quality product. Yeah, while, while controlling cost, it, uh, quality product at the end of the day,

[00:05:41] Dallas McCauley: right? So... As you can... As you know, in this, in the oil and gas space now, uh, reliability is such a big part of our business. And when you go to a client site, they, they expect you to execute at a very high level.

[00:05:51] Dallas McCauley: So that starts with Nathan's team partnering with the right cl- uh, right vendors and having that reliable product on site. [00:06:00]

[00:06:00] Josh Lowrey: What do we wanna talk about? So let me just tell you guys how great my team is. Other than some technical recording errors. The... Truly, I mean, so Caterpillar doesn't mess around. This is the Caterpillar...

[00:06:12] Josh Lowrey: There's, they're the big sponsor of this. The notes that they give me... And they think I'm reading their notes. I don't read their notes, um, because they're just so much better than I am. Yeah. They're, they have a professional team of communications, and I'm like, "I, I can't..." I can barely read. Yeah. So my team translates their notes into my type of...

[00:06:28] Josh Lowrey: I like, I like outlines. I'm an outline guy. I'm a, I'm a bullet point guy. Yeah. I have to- I'll, I'll turn it

[00:06:32] Dallas McCauley: into my own story. Yes. I just want the, I just want the nuts and bolts of it. Thank you.

[00:06:36] Josh Lowrey: Correct.

[00:06:37] Dallas McCauley: So that's what I have to do. Yeah. Like, I can't... I'm not a paragraph guy. Oh. I'm too sensitive. I'm like, "Oh, squirrel."

[00:06:42] Dallas McCauley: Yeah. "What are we talking about over here?" I would have seven different paragraphs and then I'd go to speak and I wouldn't, I wouldn't talk about any of those points. Yes. And then it'd be

[00:06:48] Josh Lowrey: another version. See, we would wear Nathan out.

[00:06:51] Dallas McCauley: Yes.

[00:06:51] Josh Lowrey: Yeah. Yeah. That is the opposite of you, isn't it? Yeah. You- A little bit, yeah.

[00:06:55] Josh Lowrey: True. I had a guy tell me one time, he says, "Josh." He goes, "You're a, uh..." [00:07:00] He said, "You're a paragraph guy. I'm a spreadsheet guy." So... And I was like, "Yeah, I understand what you're saying there." So- We got those

[00:07:08] Dallas McCauley: for you, the spreadsheet.

[00:07:09] Josh Lowrey: Yes. So there's a lot to talk about. By the way, I gotta give step... Y- audience, look how great I am as a podcast host, how quickly I can seamlessly move into this.

[00:07:19] Josh Lowrey: You need to follow us on all of our social media channels, and most specifically, go to the Caterpillar oil and gas website and check out the, um, all the episodes. Caterpillar does a great job, like, indexing any subject- Mm ... you wanna talk about. This was the first... You guys are the first people to throw schwag behind me.

[00:07:38] Josh Lowrey: Nice. And- Kudos to Nathan. That was his idea. This is great. So we're gonna talk about the NGX product here in a minute. Yeah. Um, but I think this is really kinda brilliant for you guys to throw this behind us. I'm like- Perfect ... actually, it's kinda smart to- Awesome ... to do this if we only do a marketing company.

[00:07:54] Josh Lowrey: Yeah. Yeah, right. So what... Do you guys wanna talk about NGX real quick? What, where do we [00:08:00] wanna start? 'Cause I've got lots of cool things we can talk about. Why don't we talk about- Yeah. So NGX is gas management system. Let's talk about that.

[00:08:06] Nathan Getschel: Yep Yeah. So the, the NGX is based on, uh, Caterpillar's GM- GMS solution, so their, uh, gas mechanical- Okay

[00:08:14] Nathan Getschel: uh, system. Uh, it's 100% natural gas, uh, driven engine. Um, they've been, uh, working through a pilot phase over the last year and a bit here and, uh, we were fortunate, uh, to know some of the great people at Caterpillar and, and partner with them on, uh, getting to deploy some of the, uh, original asset base in, in some of the, uh, harshest conditions up in the cold winters.

[00:08:37] Nathan Getschel: So it's, uh... Yeah, it's been a great partnership and, and, uh, great opportunity all around.

[00:08:43] Dallas McCauley: Yeah, I think we had a plug Nathan. Kudos to Nathan. He's, he's developed a great partnership and a relationship with the Caterpillar team and, and I think that was one of the legs up on why we were the first to bring the GMS- I was gonna say

[00:08:53] Dallas McCauley: to Canada. So, you know, Nathan did a great job. Yeah. And of course, the Caterpillar team's great to get along with and, and Nathan [00:09:00] connects with them on the, on the technical level. So, uh, I feel they, they had a solid partner in Step as well, and the right people to bring that product. Very transparent with the data, um, coming to site if they wanna be on site with our clients and, and watching this unit run.

[00:09:13] Dallas McCauley: So it's been, it's been great. So we've been hearing about this

[00:09:18] Josh Lowrey: from the Cat si- Caterpillar side. You're the first ones we've heard about it from the end user side. Okay. Awesome. So tell us about it. Where to start? Yeah. No, truly. It's a, it's a beast. Well, I, I- Yeah ... there's a lot actually I wanna hear about it.

[00:09:31] Josh Lowrey: Yeah. I mean- Um, I would like to hear about it from the fuel saving side. Uh, this is what they talk about often. I wanna hear just... I would... I kinda do... Remember we... I, I... In to be fair, off air, I said people don't wanna hear about the widget to the Nth degree, but all of a sudden I'm actually kind of interested in it-

[00:09:45] Josh Lowrey: because, because I have been hearing so much about this and there, it feels like there's so many metrics that are changing the game for what we've been used to that I am pretty interested in some of the specifics. So if you don't mind. Yeah. No, for sure. I'm, [00:10:00] I'm all for getting technical so. Oh my God, Nathan is...

[00:10:01] Josh Lowrey: Look at... He's, he's- He's in here. He is pumped, boys and girls. He's engaged.

[00:10:04] Nathan Getschel: Just, just, just, just remember to show squirrels if I go too far here. Go ahead,

[00:10:07] Josh Lowrey: my man. I wanna hear

[00:10:07] Nathan Getschel: this. Yeah, no. So I mean, from a, an NGX perspective, and again, the GMS side from Cat, um, really it's, uh, yeah, it's 100% natural gas.

[00:10:19] Nathan Getschel: That's where we started with. It was really, from our client's perspective, is everybody's wanting to use more gas, displace diesel, lower their cost to operate, and that's w- one of the fundamental ways is obviously through our horsepower, 'cause each one of our horsepower is, you know, they're burning upwards of 400, 500 liters.

[00:10:37] Nathan Getschel: So I think that's, uh, what is that? 8 million gallons. Yeah. Yeah, eight roughly ... gallons per hour, right? So it, it's, it's about lowering that cost. Um, but then doing it reliably and, and, and such. So the... What we also did, or what Cat did with this package was actually took... Conventionally, we're about a 2,500 horsepower engine.

[00:10:58] Nathan Getschel: Uh, this is actually, uh, [00:11:00] 3,600 horsepower, so we were actually able to squeeze more, more power density into a smaller footprint, um- Which came to a lot of complications, especially up in Canada- Wow ... 'cause we have a lot of road rules that, uh, um,

[00:11:13] Dallas McCauley: have weight restraints unfortunately. But, um- Yeah, so we couldn't put it on a conventional trailer.

[00:11:17] Dallas McCauley: It's actually on a, on a 10 wide, 10 foot wide 24-wheeler to- Did you, did you have to shift it sideways?

[00:11:25] Josh Lowrey: Or is it... How is it sitting on there?

[00:11:26] Dallas McCauley: No, it's, it's laid out as a conventional pump. Okay. But again, the trailer is just beefed up, essentially like a coil tubing trailer. It's a massive trailer 'cause we need that many wheels for the, the axle allowance.

[00:11:36] Nathan Getschel: Okay. It, it comes right down to placement of those components on that trailer though too, right? Like, if your, your, your tractor's a couple inches too far forward, they can throw us out of weight for, for where those we- that weight lands on those a- axles. So, um, so- Is this, is this available to view on your website?

[00:11:52] Nathan Getschel: It is, yeah. We do have the NGX, uh, posted on there. What's the website, just so people can go look at it? Step-es.com. Okay. Keep going. Yeah. [00:12:00] Um, so yeah, from a, I mean, from a, an asset-wise, we were actually able to, um... So right now our asset base consists of tier two, tier four, um, and now NGX, and majority of it actually cat-based up in Canada.

[00:12:16] Nathan Getschel: Um, with that NGX, because of the power density, because our focus is on, or some of our client focus is burning natural gas, uh, more so than the diesel, we're actually able to optimize and get almost two to one horsepower, hydraulic horsepower out of this asset in comparison to our existing tier four fleet when, when trying to run on an optimized displacement level, so to speak.

[00:12:40] Nathan Getschel: So it's- So reduces

[00:12:41] Dallas McCauley: our footprint on site, so you have two to one horsepower. So, um, site size in Canada is very, very particular. We only have so much room. We are going back to some existing, um, pad sites now as well, so that, that footprint becomes really critical when you wanna achieve, you know, more rate, more pressure- Mm

[00:12:58] Dallas McCauley: to complete these wells. [00:13:00] So bringing out with this technology, you're able to reduce that footprint 'cause as you can imagine, it's a very busy site when you got multi-we- multi-pad pr- uh, operations going on. You got wire line, you got pump downs. Mm. You got sand coming in and out, like it's a mini city out there.

[00:13:14] Dallas McCauley: And so when you can reduce that horsepower footprint, gives the ability to be a little more nimble on what else has to go on.

[00:13:20] Josh Lowrey: Well, for the record, I used to sell fluid. I, fluid ends were my core business for 12 years, so I don't like anything you're talking about. Yeah. That

[00:13:28] Dallas McCauley: wrecks

[00:13:28] Josh Lowrey: a lot of components. I would like to go back to the 300-hour horsepo- uh, um, lasting fluid end world.

[00:13:35] Josh Lowrey: We would- Oh- That was really good for me ... we, we would not, no. Oh, you don't want- Yeah. Yeah ... that for me? Those were good times. Absolutely. Yeah. But go on. Other than that, I- Tell me about how great you guys are. I'm listening. Yes, Nathan. Tell me about your success. Yeah. No, I actually am interested in this. Keep

[00:13:53] Nathan Getschel: going.

[00:13:53] Josh Lowrey: Yeah.

[00:13:54] Nathan Getschel: Yeah, no, it, it, it's been a great product for us so far. Um- I mean, those numbers

[00:13:57] Josh Lowrey: sound kind of crazy

[00:13:58] Nathan Getschel: actually.

[00:13:59] Josh Lowrey: Yeah.

[00:13:59] Nathan Getschel: [00:14:00] You know, and it's, it's, it's been... I mean, with, with the added horsepower, obviously you're pumping a lot more rate. Mm-hmm. So to, to your point, it's a lot more, uh, fluid going through that fluid end.

[00:14:08] Nathan Getschel: Um, but, uh, all in all, the package has been great for us. It's...

[00:14:13] Josh Lowrey: Yeah. Okay. Well, hang on. That, that's, uh, kinda leads to another question, but to the management. But you're... Are, the, you're... I, and I know that you have a lot of history with digitalization. Are you guys monitoring- Mm ... your preventative maintenance differently these days?

[00:14:26] Josh Lowrey: I mean, are you ke- how are you monitoring this stuff to make sure that it lasts longer, you're taking care of it? I assume that they're, you're

[00:14:31] Nathan Getschel: putting- Yeah. Yeah, for su- well, so that, that's one of my core backgrounds actually was more control systems and- Oh. Hey, Josh did his homework. Keep going. Yeah. Yeah,

[00:14:39] Dallas McCauley: I did.

[00:14:41] Nathan Getschel: So that, that is something I'm, uh, deeply passionate about actually is the, the control side, the automation side and, and seamless integration from a site overview. So every, every asset that we have actually has... Like a frac pump, for example, have over 250 plus data points, right? So it, it's, it's really...

[00:14:59] Nathan Getschel: We're, we're [00:15:00] trying to monitor absolutely everything that's coming off that pump. And for us it's, y- you talk about 300 hours, but it's not necessarily about... We, we talk about hours more because the finance group needs to know how many hours that fluid end's gonna last. That's right. For us it's, it's really what, what that component's going through in its life, right?

[00:15:17] Nathan Getschel: Because a, a, a pump can go through pump fluid for 300 hours and, and not see anywhere, but it might pump it. It's really about the kilowatts and the, uh, the tonnage of, of proppant you're pumping through that asset, right? So data is everything. We do, we do s- focus on putting all that data up to the cloud and allows us to go through and s- and start other programs that can start looking at, uh, different modeling, um, and really, uh, focus on, on asset efficiency and asset life, right?

[00:15:46] Nathan Getschel: So.

[00:15:46] Josh Lowrey: I mean, um, and you know, Dallas, I'm sitting here looking at your stuff as well. Uh, this is... You guys are not fly by night guys with Step. Like, this is... You're, you're decade plus in this thing. So. [00:16:00] Yeah. We got

[00:16:00] Dallas McCauley: a lot of balls in the air. Yeah, you do. We, we manage a lot of people. Um, you know, now with the merger with, uh, Sandahl Energy Services and Wayfinder- Yeah

[00:16:08] Dallas McCauley: the organization is over 1,600 employees now. Is it really? So it's, you know, we're, we're, we're turning into a, to a bigger animal and, and the vertically integrated business is, uh, positioned as well for the future. We're, we're now cementing, uh, you know, on the drilling side, we're, we're cementing wells in, we're stimulating the wells, we're milling out the wells.

[00:16:26] Dallas McCauley: So it's really from the cementing side and then handing over to production. So we're involved in a lot more of the process bringing wells to life. That is much bigger than I- Remember STEP being Yeah, absolutely. So the, so the merger's quite fresh and, and from my chair, super happy with the Sandjel Energy Services team.

[00:16:44] Dallas McCauley: They're, uh, great leadership, safety focused, client focused. Um, they really focus on their quality assurance as well. They're, they're about delivering great products. And I'd say the same for Wayfinder. Uh, great leadership, domestic sand, located in a great spot in, in central Alberta, or... [00:17:00] And, uh, great access to the Duvernay formation.

[00:17:03] Dallas McCauley: And again, uh, yeah, we're just a bigger animal and it's, it's, uh, it's, it's exciting to what we're gonna be looking into the future.

[00:17:11] Josh Lowrey: I- is... What is the future for STEP? I mean, how do you guys view it as... I mean, look, there's a lot of

[00:17:16] Dallas McCauley: changes, a lot of additions. It, it's very positive. Um, you know, we're finally seeing investment come back into Canada.

[00:17:23] Dallas McCauley: Ovintiv, um, has gotten bigger. Shell has gotten bigger. They bought Arc Resources. So we're seeing outside of Canada investment come back in. We have LNG that's, uh, growing and, uh, again, we're positioned well to take advantage of that market dynamics. Is that... I don't wanna go political by names. I really don't.

[00:17:40] Dallas McCauley: Neither do I. Yeah. 'Cause number one, there is no answer. It's a rabbit hole. There is, yeah. There is

[00:17:44] Josh Lowrey: no an- they're both wrong and it just does this. And we can't

[00:17:46] Dallas McCauley: control that. And you can't control it. We gotta control what we can control, and that's- Buddy, that is the- ... being, being there ... that is the answer- Yeah

[00:17:51] Dallas McCauley: for

[00:17:51] Josh Lowrey: the record. It... But is there... Does data center affecting the [00:18:00] reinvestment? Is the... Are the market forces just more favorable? Is there... Like, why is it coming back in there? 'Cause it was tough. Like, again, not... I love Canada. I... That was not fake. I'm not being s- Yeah ... that's not just fluff about Calgary. It's one of the most enjoyable towns to do business in.

[00:18:16] Josh Lowrey: Yeah. But there was a period where you could not do business in Calgary. Yeah. And in Canada, like, it, it is... I'm thrilled to hear that it's a place that you can... that it's coming back and it's lively again. Why is that happening?

[00:18:29] Dallas McCauley: I, I think a lot of it has to do with the, the prospects of LNG. Um, no different than the US.

[00:18:34] Dallas McCauley: Okay. Um, you know, the oil markets are obviously strong. We all, we all watch what- Yeah ... WTI is trading at. Um, I do think that we're in a more favorable position from a government standpoint. I think the world in general realizes that we need energy, and I think it's great. And as, as we move forward, we're, we're bringing on technologies like the GMS that's, you know, more emissions friendly.

[00:18:56] Dallas McCauley: Um, so yeah, I think it's just, yeah, a lot of [00:19:00] excitement- Okay ... overall. And you can feel it as we're in Houston as well.

[00:19:03] Josh Lowrey: Yeah. I mean, again, I, it sounds... I'm happy to hear that. That sounds very normal business opportunities. Yeah. Right? And, and w- uh, look, everybody here, I always, I always joke with people, nobody wants to go to dinner with me anymore because all I talk about is AI and peptides.

[00:19:18] Josh Lowrey: peptides. That's it. Peptides and AI. What do you wanna talk about? Yeah. And, and then maybe the third thing is data centers. Data centers. Yeah. Yes. And, and how are you powering them? How are you involved in them? How, how... Data center, data center, data center. Behind the meter. What... I mean, just keep, take your pick here.

[00:19:34] Josh Lowrey: And I'm wondering if- If that's starting to... If those conversations are taking place up in, uh, in Canada as a whole, all over the place, and

[00:19:42] Dallas McCauley: I'm just, I'm- At, at a smaller level they're happening ... Yeah. Def- Um, but from, from our standpoint, again, it's, it's how do we provide that, that natural gas to, to that power generation

[00:19:50] Dallas McCauley: You're, yeah, you're just there to service the gas

[00:19:51] Josh Lowrey: then. Yeah. Okay. Absolutely. Okay. That's great. I mean, again, that's, uh, by the way, you're right on target for where I was going next. Uh, and [00:20:00] by the way, that's what everybody's strategy's going to be is natural gas. That is the solution for what we're trying to all get to.

[00:20:05] Dallas McCauley: Yeah,

[00:20:05] Josh Lowrey: absolutely.

[00:20:07] Dallas McCauley: And we have an abundance of Canada. We, you know, hence, hence the GMS. Um, so when we started the frack business in 2015, we knew early on that, you know, natural gas is gonna be part of this. We were wondering what the clients were looking for, so we invested into the Tier 2 technology, um, early on in '15.

[00:20:24] Dallas McCauley: Um, rolled out a couple fleets with, with the, with the Tier 2 technology, and then we got into Tier 4 through a neat client partnership where we were able to build out a crew with Tier 4. And then we were, again, back to the, the first to bring the GMS to Canada, which, you know, our clients are ha- extremely happy with.

[00:20:40] Dallas McCauley: Our, our operations team love working on that beast, and it's proven to be a reliable asset. Well, you know, there's a line

[00:20:49] Josh Lowrey: that... There's a... Go back to 2015 probably, right? 10, 10 years ago. Back when, uh, the world of subsea was [00:21:00] actually dead. But, but we didn't know it was gonna be dead forever at that time.

[00:21:06] Josh Lowrey: And a friend of mine was... He... They signed a deal with one of the big offshore companies, and it was a huge deal at that time. They were gonna start refurbing BOPs. And he nailed it. They... Or this, they, the company nailed it. So, a- and the CEO was quoted in the paper. So I called him and I said, "Hey, great job.

[00:21:22] Josh Lowrey: This is a big deal." And he said, "You know, Josh..." He goes, "It is a big deal." And he said, "Nobody..." He says, "We worked on this with everybody. We tried to get everybody to do this." And he said, "Nobody wanted to be first." Mm. He said, "Everybody wants to be second." Yeah. Mass followers and... Yeah. Man, I, I'm... When I hear you guys talk, did everybody wanna be first or did you guys wanna be first?

[00:21:46] Josh Lowrey: And now that you're first or were first, does everybody wanna be second? Are... How much of a head start do you guys have and how fast do you have to run to

[00:21:52] Dallas McCauley: stay ahead? We've gotta run pretty fast. Yeah. I would, I would think so. Yeah, pretty fast, yeah. But we, we like to challenge ourselves and we like to be on that leading [00:22:00] edge.

[00:22:00] Dallas McCauley: Not bleeding edge, is what we say. Sure. But, um, you know, I think we e- we embrace the challenges. Uh, Nathan can touch a little bit on our, on our exi- uh, electric backside, but again, if you wanna be the first call to your client, you gotta be able to be, stick your neck out a little bit to bring these solutions to them.

[00:22:16] Dallas McCauley: Um, and it's not gonna go right the first time. It may not even go right the second or the third, but when you have a team like we've assembled at Steck- You get to that point where like, holy cow, that was, that was a lot of work, but it's rewarding. And, and now you got this finished product in the field, and you're executing for clients and, and people are looking over the fence like, "How did they do that?

[00:22:34] Dallas McCauley: What's different about these guys?" So it- it's very cool to be, you know... Again, Nathan does a great job on, you know, understanding that big picture on how do we get this asset to the field, and then, uh, my team, you know, well, we wreck it a little bit, but that's just part of fracking. But So you're right.

[00:22:50] Dallas McCauley: That's great. It comes, it comes down to that

[00:22:51] Nathan Getschel: partnership, right? It's like, it's a, it's a three-way unit is the way I look at it. It's like that client, it's the, the people within our organization, the people within the [00:23:00] team that want to see it through and, and have just as much into it to, to drive them forward with it, and then it's, it's the technical side of it, like, like the partners of the OEMs and whatnot that, that have our back with it, right?

[00:23:12] Nathan Getschel: So it's, it's... That's why I love being first with it is because I know the support, support team that we have internally w- and, and the, the outside two groups that support us with it. So it's- How did the field react to being first? Our, our operations? Yeah. It's, it's been great. Our operations. Yeah, yeah.

[00:23:28] Nathan Getschel: Because, like, like they, again, they, they want that technology too, right? I would think they love it actually. They love it. Without their buy-in, we can't be successful with it. 100%. So it's, it's, it's seeing them, it's supporting them, making sure that they, they see it, they want it. And then anything that they do run into, we need to make sure that we're 100% there supportive for it so that they do want it there the next job, right?

[00:23:48] Nathan Getschel: You

[00:23:48] Josh Lowrey: know, and I would think, again, just this is one of those worlds, you know, the whole joke about AI. AI's taking your job. No, no, listen, AI's not ta- The, if you, uh, the guy who knows how to work AI is taking your [00:24:00] job, right? Yeah. That's the, that's that line.

[00:24:01] Dallas McCauley: You gotta, you gotta be the guy that's leveraging AI to get you- Yeah

[00:24:04] Dallas McCauley: to where you need to be. Well, but I

[00:24:05] Josh Lowrey: mean, that's, that's AI. Specifically on you- for your group and your operations, I would imagine that, you know, anybody can use a hammer, but it's the guy that knows how to use the hammer with technology, et cetera, the digital side of things. Y- your team now feels more advanced than the next crew out there.

[00:24:23] Josh Lowrey: Absolutely. And that to me is a huge

[00:24:25] Dallas McCauley: advantage for them. Yeah, they're proud to roll that equipment- Absolutely ... on the site. You know, they, and the client's like, "Oh, that's cool. Tell me about it." And, and our field professional's like, "Yeah, check this out." And, and it, and then you go do a site visit and these guys are just, they're so proud to be out there.

[00:24:38] Dallas McCauley: Oh, I love that. Yeah. Tell

[00:24:39] Josh Lowrey: me more about that. I'm really int- I love, I love when those guys get that recognition. Though, 'cause listen, it is easy to do a podcast in this badass studio. Yeah. You know what I mean? It is easy. Absolutely. I bet it's not real easy when you're freezing your butt off.

[00:24:54] Dallas McCauley: No. And that, and that's where the collaboration with our, with our group goes.

[00:24:57] Dallas McCauley: I, I grew up at the, at the ground level. I started at the [00:25:00] bottom and, and grew myself through and now in executive leadership. Yeah. But again, my, my focus is collaborating with my field professionals. Yeah. I don't know what they're do- dealing with on a day in and day out- Right ... basis. I, I'm sitting in a, in the ivory tower, like what do I know?

[00:25:14] Dallas McCauley: But so that's where you gotta have these conversations with them and say, "Hey, what's working for you? What's not working for you?" You know, we have an open door policy. Call me any time, 24/7. Like, we're in operations. We, we wanna make this things, make these things work for you.

[00:25:25] Nathan Getschel: Yeah. I think that's what makes EPS so successful though too, is that, that, that history, that experience that, that we all have, right?

[00:25:31] Nathan Getschel: Like, every one of us grew up at that ground level. They've, they've all put in a, a ton of time. You know, so many employees that... or professionals that we have that are 20-year plus that are, that are in it from the roots ground and, and want to make a difference, right? Like, their, their passion is this.

[00:25:46] Nathan Getschel: It's, it's the industry. It's, it's what they're doing from day to day. So it's-

[00:25:50] Josh Lowrey: You know- ... it's awesome to see ... we, uh, I almost get emotional talking about that stuff 'cause that's really how these podcasts started. Just so you know, we started this first podcast in 2019 selling [00:26:00] forgings. Okay. Like, I was trying to sell forgings.

[00:26:01] Josh Lowrey: That's fine. Yeah. It's... And, you know, not anybody can sell forgings, but that's a, it's a commo- steel is a commodity.

[00:26:06] Dallas McCauley: Yeah.

[00:26:07] Josh Lowrey: So we were selling steel forging fluid ends. Great. You sell that. Well, okay, fine. Mine costs a dollar, this guy's costs $1.02, right? Or whatever. Yeah. And as I kept thinking, "How am I gonna tell people that mine is better?"

[00:26:25] Josh Lowrey: You know? Like, what... Why is mine better? Yeah. And I was like, "Well, mine's better 'cause the guy at the shop works harder, and he's been there longer. And if there's a problem, he'll get, he'll... If there's a 3:00 AM call, he gets up to answer the call." And I started really thinking about... And I used to work in the Midwest, in Pennsylvania, Ohio.

[00:26:44] Josh Lowrey: That's where I'm from- Okay ... professionally. And I don't know how to fix that stuff. And I've been made fun of at the machine shop for the guy who doesn't know how to work anything. Yeah. But I, but that's fine. I was willing to look stupid so I could be around these guys. And what you [00:27:00] realize is the passion...

[00:27:03] Josh Lowrey: We had, we interviewed a guy from CAT, and, and I'm so glad you... It's so funny you mentioned the outline. I hope... I, I don't know if this was on our recorded part or not. But w- if, if not, you told a story about how there was an outline of a wrench- Yep ... that if it's not there, that means that tool is missing.

[00:27:22] Josh Lowrey: Yep. And if you've ever been to a machine shop or... Then everyone knows what that means, right? And I always loved that example of that's how you know a shop is done right. Yeah. I agree. You know? Because if you're willing to take the time to tape out a wrench and, and the hammer and everything, and that better be back, and I'm telling you, I've been in there when it's not back And that guy is furious

[00:27:44] Josh Lowrey: Yep. Attention to detail. Attention to detail. Al- al- also

[00:27:47] Nathan Getschel: scared wondering where it's gone. Say it again? Also scared wondering where it went. Yeah.

[00:27:51] Josh Lowrey: Fair enough. Yeah. But he's gonna... He... If it... B- better not be Josh Lowrey who left that hammer out- Yeah ... or the wrench gone because he'll kill me. Yeah. Right? Yeah.

[00:27:59] Josh Lowrey: Somebody [00:28:00] else could be using it right now, but I just... I love the story behind the guy who takes the attention, takes the time to do the little things behind the scenes that nobody ever gets attention for. So the fact that, you know, when you say that you came from the ground up and you guys worked it and your attention to the, the, the detail on the mechan- or the electrical stuff, like, this is what makes our industry so great.

[00:28:20] Josh Lowrey: Agreed. I could talk about this for five hours. Like, this is what makes a company- It's the passion piece ... private equity guys, fine. Spreadsheet guys, and they're smart too, don't get me wrong. They're, they're really smart guys, but it, it really comes down to the people that, that our audience will never meet.

[00:28:38] Dallas McCauley: Yeah. Yeah. We're, we're... I mean- Yeah ... the reality is we're- I agree ... we're, we're 80% of our, of our professionals work in the field to, to bring in the revenue dollars, to, to keep the wheels turning on, on the big organization, and we try and do a... We try and put focus on that. We try and, um, recognize our field professionals for what they do day in and day out, 'cause it, it's not easy and, [00:29:00] and there is a true appreciation at our organization for those team members.

[00:29:04] Josh Lowrey: Well, technically we've been on this podcast for six hours, but- ... we've only been recording for about 30 minutes, so we're gonna keep going here. Uh, what are... I... This is a good question here. What customers, when they're evalua- evaluating solutions for you guys, what ultimately drives the decision? Cost savings, performance, strategy?

[00:29:19] Josh Lowrey: You're a strategy

[00:29:19] Dallas McCauley: guy. Yeah. Um, so when our clients are looking at us, it's, it's, you know, it's bringing the, the gas technology. Um, it's understanding... trying to understand what their well completion program looks like. It's trying to be efficient on site for them. I mean, safety's at the... at top of mind. Um, you know, we do a great job on collaborating with our, with our clients.

[00:29:41] Dallas McCauley: We'll, we'll do, uh, town halls on site. You know, so we'll go up there and, and we'll, we'll make sure that we reinforce that safety culture within the organization and, and our clients do a great job of that as well.

[00:29:56] Josh Lowrey: Sorry, you stopped. I was mid-, mid-note-taking here. [00:30:00] Um, where's the industry going for you guys? What do you think? Do you think they follow you guys, or you think you guys keep leading? What happens to the industry? We wanna keep leading. Yeah?

[00:30:10] Nathan Getschel: Yeah. In terms of technology, 100%, yeah. Yeah.

[00:30:13] Dallas McCauley: You know, our, our C-suite probably gets a little annoyed with us-

[00:30:15] Dallas McCauley: 'cause we, we always wanna bring new technology and, and again, back to us not necessarily getting it right the first time, but we will get to that point where, you know, we brought something new and it, it's... We're, again, we're at that leading edge. So, and,

[00:30:27] Josh Lowrey: and

[00:30:28] Dallas McCauley: I, I know you're a little tongue in cheek there, but, like, w- why would they be annoyed?

[00:30:34] Dallas McCauley: Money, time? I think it's capital efficiency. So, you know, making sure that what we invest in is- Yeah ... is gonna give us a return. Okay. And in, in these market conditions, uh, and for the OFS space, we, we need to be really diligent on what we are investing in. Right. So you need to have, you know, solid products behind you.

[00:30:51] Dallas McCauley: You need to have reliable, um, reliable assets and, and working for the clients on a daily basis. [00:31:00]

[00:31:00] Josh Lowrey: I actually really like this question. I wanna get your opinion on this. Um, y- you guys can either, either or, or both. Uh, your vantage point, what is the biggest misconception about natural gas-powered operations today?

[00:31:17] Josh Lowrey: Oof. Yeah.

[00:31:20] Nathan Getschel: From... The biggest misconception would be likely just everybody feels that they have sufficient gas, right? And, and not, not all the time do you have, have the amount or the, the quality of gas that you necessarily require. That, that, that's a big reason, like, one of our, one of our, our, our strategies I guess you could say from, from a site level is, is how do you deliver zero to 100% diesel displacement, right?

[00:31:46] Nathan Getschel: And the reason why we say and everything in between is because it's, it's not just one technology that can give you 100%. It's some clients may be able to support, you know, 60% displacement. Some may be able to do 80, some may be able to do 90, [00:32:00] few 100. So it, it, it's... But just saying that, you know, you wanna burn 100, all 100% natural gas is it's, it's complicated in doing so in, in making sure you can manage that capacity and that quality and-

[00:32:13] Dallas McCauley: Yeah, that's where my head goes as well is, yeah, we're, we're gonna bring the best asset base out for you based off of what you can supply us for gas.

[00:32:22] Dallas McCauley: Okay. It's, it's not a- That's a great way- It's, it's actually back to that capital efficiency. So if we have a client that can only provide X gas, then we might have a mixture of Tier 2, Tier 4, NGX. We might go down the road and this client has an abundance of gas, and we can, we can send out all GMS and a few Tier 4s.

[00:32:41] Dallas McCauley: So really we wanna focus with, focus on the clients on what they can deliver to us, so we can deliver equally back to them and we'll get, you know, whatever that substitution number is or diesel displacement number is and, and we're all happy. But we have that expectation going into that work. And, and from an asset base too, when

[00:32:56] Nathan Getschel: you look at it, I mean, we still have y- we still have some of our [00:33:00] legacy Tier 2 assets.

[00:33:01] Nathan Getschel: We have a, a Tier... a giant Tier 4 asset base and, and some of this NGX. But when you, when you start looking at it from a, the, the client cost perspective, you, you can take a, a handful of Tier 2s, mix it with some NGXs, and now all of a sudden you're displacing a Tier 4 fleet. So it really it comes down to how our operations teams goes and compiles those, those fleets for that, that client and, and addresses what assets are going out and at, at the end of the day, achieves the exact same result as what the client wants.

[00:33:29] Nathan Getschel: So my,

[00:33:30] Josh Lowrey: my... Kinda one of my follow-up or final question was, was how quickly are customers adopting this? But it really comes down to How quickly can they help, help service their own adoption? Yeah. It, again- Is that a way to

[00:33:44] Nathan Getschel: say it? And how we can support that, yeah. Okay. Help- helping them identify that, right?

[00:33:48] Nathan Getschel: There is different techniques, too, in, in where we can help boost gas, quote unquote, w- in terms of if it's... Or, or, or help them come up with solutions that will help deliver [00:34:00] more and,

[00:34:01] Dallas McCauley: and displace the most amount. But- I would also say one other point of, of misconception around, um, you know, DGB or, or, or, you know, tier four, tier two is just because you have those kits, you still gotta manage the asset correctly.

[00:34:15] Dallas McCauley: Yeah. So, you know, when w- it's a KPI for us on, on that substitution number. Right. So it's a visible, uh... It's a visible number on our screen when our pump operators are, are manipulating the, the assets. So we have optimal substitution because it's a KPI for us. We measure ourselves against it. It's not just, "Hey, you got this, this kit on, and now just put it into gear and go."

[00:34:37] Dallas McCauley: There's actually some science behind how do you maximize that substitution within the asset. Yeah. Well, most companies will look at it from

[00:34:44] Nathan Getschel: a fleet level, whereas we look at it per asset level.

[00:34:47] Josh Lowrey: So this is the closing question, but I'm gonna tell you guys how good of a job I think you've done educating me.

[00:34:52] Josh Lowrey: I'm gonna answer- Boop ... the question that I was gonna give you. Okay? The question is, if the oil field is moving towards a more [00:35:00] integrated energy managed model, what ultimately defines success? Is it fuel choice, technology, or execution in the field? And I would say, kind of list... Do you want me to repeat the question?

[00:35:11] Josh Lowrey: If the oil field is moving towards a more integrated energy managed model, what ultimately defines success? Fuel choice, technology, or execution in the field? I would say that fuel availability with execution in the field by your team and the technology available is the only way. So it's all three of them.

[00:35:32] Josh Lowrey: It's not one or the other. That's right. I would agree with that 100%. But you can't do anything without your execution of your people. That's right. And you really can't do anything without proper fuel availability. And then you have to have the technology, 'cause if you want this but you can't get it, it doesn't matter anyway.

[00:35:45] Dallas McCauley: Yeah. It's collaborating with the client. I learned something. You wrapped it up well though, John. Yeah. You're a natural. That means

[00:35:50] Josh Lowrey: you... Honestly, I really feel like you guys did a great job. 'Cause none of this stuff is... Listen, if you... There's 100 things you didn't tell me today, [00:36:00] right? There's, there's a- Yeah

[00:36:01] Josh Lowrey: there's the Nth degree of these widgets and... But like, this is... The audience learned something today. I promise you they did. And they need to know these things, 'cause they have to call you guys, and someone's gonna hear this and be like, "I need, I need that. I have fuel. I don't have the, I don't have the team."

[00:36:19] Josh Lowrey: Right. Or, "I have money to buy technology." And I have fuel. Yeah. Right? We like to have. Yeah. I love it. Um, did I miss anything? Do I, we need... Is there anything else I need to cover here? No, th- this was, this was fantastic. Which podcast do you

[00:36:39] Dallas McCauley: like? Our first, second or third one that we did today was your favorite?

[00:36:43] Dallas McCauley: I don't know. Maybe we'll just blend them all. I guess the first couple we can't do those 'cause they're, they're, they're gone. Just kinda m- m- mine those out. Yeah, absolutely. Yeah, no, really appreciate you having us. Um- Thank you for the hats. These are great ... been a wonderful experience,

[00:36:55] Josh Lowrey: so thank you. Thank you guys for coming to town.

[00:36:58] Josh Lowrey: So Dallas M- [00:37:00] Macauley and Nathan Getchell, thank you guys very much. Step Energy. Truly, I've known you guys for a long time. We have a couple mutual friends we talked about off air. Absolutely. Uh, you guys, actually you said you mentioned you, you know my brother. Yes. This is a small world here as well. Uh, it is, the oil field is the best.

[00:37:15] Josh Lowrey: Absolutely it is. The people... It is one of these worlds that you burn a bridge and you might as well go sell tires because you're done. You know? And you gotta be around a long time. You guys have been around a long time, and it sounds like you're gonna be around a lot longer, so I truly wish you guys the best.

[00:37:29] Josh Lowrey: Congrats on the success. Go tell the guys that nobody gets to meet thank you for doing things the right way. I'm gonna come see you- Let us know ... at, like, 11:00 PM. Yeah. And we'll have breakfast. Because nobody will know the difference. That's right. Bring your sticks when you come up. Absolutely. I'll, we can shoot 105 with me.

[00:37:47] Josh Lowrey: That just sounds great. Yeah. So all right, guys. That's the Energy Pipeline Podcast. Uh, check us out on all our socials. Um, Caitlin, how did we do? Great. Great job, Caitlin. Great job, everybody. [00:38:00] Uh, look, the Caterpillar oil and gas website, that's where you wanna go. Upright Digital for anything other questions.

[00:38:06] Josh Lowrey: If you have any complaints, which I will, send those to Caitlin. If you have any compliments, send those to me. Thank you very much, guys. Thanks for coming in. Thanks so much. Thank you so much.