Michigan’s Team Services travels west to the booming Bakken to provide workover rigs and other services that keep energy companies in the oil.
It was inevitable that Team Services, LLC, based in Kalkaska, Mich., would make its way to the Bakken oilfields three states to the west. Manager Steve Kwapis didn't have to work very hard at it — unless you count the years of hard work to build a good reputation and the company's investment in a solid safety program.
A major oil company contacted Kwapis based on references and Team Services' emphasis on safety. In October 2011, the company had a new workover rig delivered to Dickinson, N.D., directly from the manufacturer. By mid-March 2012, a second rig was delivered to the Williston area to provide services for a second oil company, and a third rig was delivered in July. A fourth is scheduled for this April.
Since workover rig services cover the life of the oil well and the Bakken is showing no sign of slowing down drilling new wells, the venture west should be a long and happy one for Team Services.
Team Services was founded in 2001 as an oil service company with a small service rig and a vacuum truck in the northern region of Michigan's Lower Peninsula, and it has grown substantially over the past decade. As the company name indicates, its services cover a broad spectrum of support work, and crews coordinate with other oil service companies.
Team Services starts with excavation, offers hot oiler and vacuum and tanker truck services, along with brine spreading and disposal, and follows through right down to snow removal. Its biggest focus — workover rig service — has prompted the company to establish satellite locations in Manistee, Mich.; Mercer, Pa.; and Killdeer, N.D.
"When the Nielson family bought Team Services in 2008, the oil industry was picking up in Pennsylvania, so we sent a rig down there," Kwapis explains. "Pennsylvania was close, and the company started to take off from there."
The third-generation Nielson family understands the risks and benefits presented by the energy sector. Their first well in 1936 was a dry hole, but the company expanded from the 1960s to the 1990s with about 300 shallow natural gas wells in Michigan. In the 1970s, they partnered with Shell Oil Company to drill and complete deep oil and gas wells, and they continue to be a non-operating working interest owner with Shell (now Merit Energy).
The Nielsons sold interests in the shallow wells, but continue to manage 20,000 acres of mineral and leasehold acreage in Michigan. Kwapis, a longtime friend and business partner, manages Team Services for the family company.
The company's work in Pennsylvania and contractors sharing information led to the first request from a major oil company to set up a workover rig in the Bakken. The second oil company's request came through a manufacturer of workover rigs. The oil company asked the manufacturer which companies were buying new rigs, then checked the Team Services safety records on ISNetworld, which provides a grading system for safety and reliability to connect corporations with contractors. The oil company chose Team Services, which sent a second new rig to the Williston, N.D., area in March.
PUTTING WELLS INTO PRODUCTION
"I am very fortunate to see all facets of the business and now to be part of something this large," says Tom Goosman, 68, who enthusiastically accepted Team Services offer to experience "one more boom" when Kwapis asked him if he would accept a job as area manager in March. Goosman had hired Team Services when working for a different company.
Goosman remembers his first night flight into Williston and seeing what appeared to be a vast sea of stars on the ground below. The flight attendant confirmed that the lights they were seeing from 10,000 feet were fires burning off gases on well sites in the Williston basin. Goosman knew Team Services would be in the Bakken for a long time.
"The nice part for us is we get in right after the drilling process," Goosman says. "We get to come in and help complete the well, and we get to service it for the life of the well."
After a Bakken well is drilled, the oil company moves its rig to the next site and Team Services moves in, tripping pipe for the frac crew, then pulling it out and running the production string. With wells 20,000 feet deep or more, the pipe weighs about 200,000 pounds, so some of the workover rigs can lift and lower up to 350,000 pounds.
Typically the rig is on the site for eight to 10 days working with frac, cement and other crews to get the well into production. As they come close to finishing one site, the oil company schedules Team Services for the next site.
Production work is just the beginning. After the initial flush of oil, pressure starts to diminish and a pump is required. The workover rig crew returns to pull the pipe, drop in a pump and get the well ready for another crew that installs the "horsehead" pumpjacks commonly seen on well sites. Beyond that, workover rigs are needed to replace pumps and make repairs, sometimes as often as every year or two, Goosman says.
Each service rig costs about $2 million when equipped with all the necessary parts and support equipment such as pumps, tanks, skids and pipe racks. Based on customer demand and anticipated workload, it's an investment Team Services is willing to make.
The company buys its rigs from Falcon Rigs, Inc., based in Cashion, Okla. They initially purchased two sizes of rigs for the Williston area.
The first rig is a Model SR 550 powered by a Detroit 60 Series 540 hp engine on a five-axle carrier. It has a racking platform capacity of 24,000 feet of tubing on a 104-foot-tall derrick. The second and third Falcon rigs are in the 600 series, also with Detroit Diesel engines with 108-foot derricks.
"We needed a heavier rig for deeper wells," Goosman explains.
The service rigs' derricks telescope to half their length when they are transported to a new site. "It's different than driving a semi," Goosman notes. "They are top-heavy and extremely long." A permit is required, and lead and tail vehicles are required for the 45 mph (maximum) trip to the next site. Once they arrive, workers set up quickly and the rig is operational on the new site the same day.
The service rigs comprise about two-thirds of the workload, but Team Services has a large fleet of equipment to put to work for trucking and excavating services in Michigan and hot shot trucking along with workover rig services in Pennsylvania and Ohio.
"We have a fleet of trucks that varies in models. However, our tractors and winch trucks are primarily Kenworth T-800s with a minimum of 425 hp Caterpillar engines," Kwapis says. "We have pump trucks and hot oilers that are capable of pumping pressures up to 5,000 pounds. Our pump truck and hot oiler fleet is comprised mainly of International 4200 series chassis. Our vacuum trucks are equipped with Battioni vacuum pumps (National Vacuum Equipment) and Roper gear pumps. Our winch trucks are equipped with Tulsa winches (TWG) of varying capacities up to 80,000 pounds.
"Our excavation equipment is no different than the trucks in the sense that it is eclectic; however, a large portion is by Komatsu (D61, D63 and D68). We have dozers ranging in size from a John Deere 650 to a Cat D7F. Our dozers have winches and headache racks to enable them to participate in rig moves," Kwapis explains.
While Team Services prides itself on maintaining good equipment, it's the hardworking crews that make a difference for customers.
"I always like to play up our people," Kwapis says. "Everyone can buy the same rigs and equipment. It's the people you have running it that sell the company. Our Michigan employees are used to working in extreme weather conditions from -30 degrees to 100 degrees F, so they have very few problems working throughout the United States. They work 14- to 16-hour days and are away from home the majority of the time. We take pride in our people."
Because of the company's extensive training program, Goosman knows he will keep a group of solid workers — many who come from families with years of experience in the oilfields. Team Services strives to treat them well. The company secures worker housing, which can be difficult in boom areas such as the Bakken. Before they were set up there, the company networked with people in the area to find housing for the first crew. When Goosman spotted new construction underway for worker housing, he booked rooms for the second rig before the complex was finished. There are now three housing locations, all about an hour from the jobs on the rigs.
Team Services also flies workers home for time off on their four weeks on/two weeks off schedule.
By this spring, Team Services will have 20 workover rigs in the field, and then add two or three rigs each year. The company's goal for the year is to build its customer base in all areas of operation.