In full-bore growth mode, Oklahoma’s Tilley Pressure Test thrives by providing fast, precision, paperless service.
In the fast-paced world of oilfield pressure testing, where errors or slow response can cost customers big bucks in terms of lost production time, Tilley Pressure Test Inc. succeeds by providing swift, accurate service to one primary customer in a niche market with a high barrier to market entry.
Established in 2003, the company — based in Marlow, Okla. — has expanded from one pressure-testing facility to testing cells in 10 locations: two in New Mexico, two in Oklahoma, two in Pennsylvania and four in Texas. Over that time, the company's average revenue growth rate was 1,590 percent, and the workforce grew from two employees to 180, says Kimberly Tilley, who co-owns the company with her husband, Jimmy Tilley.
In doing so, the company bucked conventional wisdom by agreeing to primarily serve just one customer, a global energy services company the Tilleys don't want to name. Risky? To a degree, but that didn't stop the Tilleys when the customer asked them to enter the field for pressure testing "iron" used in the fracking and cementing processes. Tilley was already providing hot-shotting services to this customer.
"It is a partnership of understanding," Tilley explains. "As long as they keep our shops and facilities really busy, we won't accept iron from any other company. But if our guys have to start looking for work, we'll market ourselves to other companies.
"So it's not scary to us," she continues. "We know there's other work out there that we haven't even tapped into. But this partnership works out so well that we don't have to worry about that. It's very much a win-win situation. It's in their best interest to have an objective third party do the testing because it provides proof that they are doing everything within their power to prevent failures by working with certified iron."
The Tilleys also offer trucking and hot-shotting services via Tilley Trucking LLC, which generate about 30 percent of their overall revenues. To provide those services, the company relies on a fleet of about 50 trucks. They own about 10 of the trucks, which range from 3/4-ton Dodge 2500 flatbed trucks to Peterbilt semi-tractors with trailers, mostly made by Doonan Specialized Trailer LLC and Fontaine Trailer Co. Contract employees hired by the Tilleys own the rest.
Large capital investment
Pressure testing is an expensive venture. Tilley estimates that the company's first testing cell — a building with 9-inch-thick concrete walls and 3/4-inch-thick steel doors aimed at protecting people if a pipe fails and explodes under pressure — cost nearly $100,000 to build. Insurance is expensive, too, not to mention the required ancillary equipment: forklifts (made by Clark Material Handling Co.), large air compressors (Sullair), computers, software (NetPro IT) and cameras to document tests.
"We definitely had to think about it at the time," she says of the large capital investment. "It was very expensive — costly enough that not every Tom, Dick and Harry is going to get into it. But that's an asset, too."
Early on, the rapid expansion into pressure testing strained the company's cash flow, with expenses outstripping incoming revenue. The company had to borrow money to keep up. Finding employees and training them also posed a challenge; it can take up to a year for a new employee to pass a required test and accumulate enough hours of supervised work to obtain certification. But that strain on financial and human resources has eased now that all the test locations are established, Tilley says.
In an industry where speed and precision is paramount to both oilfield safety and productivity, Tilley Pressure Test prides itself on responsive customer service.
"One of the reasons we've grown to the degree we've grown is because of our quality of service and speed," Tilley says. "If they're waiting on their iron to go back on location, they're losing a potential of hundreds of thousands of dollars. They need the iron and they need it now ... every area that we service has an iron coordinator that does nothing but keep iron ready to go back to the field when out-of-date iron comes in. Our job is to make our customers' lives easy.
"We offer a big advantage because if our main customer takes its iron to a competitor's shop, they're putting it in line to wait and get tested," she continues. "When they bring it to us, they are the line. Now, in Marlow, we have a couple different buildings where we can service other companies, if needed. But at our external shops, where we have one building in each town, we serve only our primary customer."
It's also more efficient for the customer to rely on one pressure tester because it eliminates the chance of iron components getting mixed up with other companies' iron. In addition, Tilley Pressure Test keeps the customer's repair parts on hand — rings, seals, plug valves and the like — which also boosts efficiency.
Pressure testing is dangerous work. First, the iron — which generally ranges from 2 to 4 inches in diameter and 2 to 14 feet long, with pipe wall thickness varying according to its diameter — goes through various tests. Then employees assemble sections the way it would be put together in the field and use hydrostatic pressure to pressurize the iron to a point it's supposed to safely withstand, ranging from 5,000 to 22,500 psi.
That pressure must be maintained for a certain amount of time. If all goes well, the pipes hold, and then an operator slowly reduces the pressure. If not, an explosion might occur.
"We've had one explosion, and our customer uses it as part of a safety training video," Tilley says.
After testing is complete, employees sandblast the iron clean and paint it. Then they affix to each piece a colored band on it that indicates its certification period, which can range anywhere from 90 days to six months to a year. All pieces of iron in the field get tested regularly, and the customer typically drops off and picks up the iron, Tilley says.
"In a way, the certification band is like a 'born-on date' on a beverage bottle," she explains. "Iron can be reborn, or recertified, in which case it gets a new color of band and a new date."
The iron needs to be recertified because large volumes of fluids pass through it at high rates of pressure. In addition, the iron is constantly working under pressure, workers hammer on it to put it together or take it apart, and it's subjected to fluctuations in heat and cold.
After building its first testing cell, the company started to construct them from thick, heavy-duty steel plates instead of poured concrete. The reason was two-fold: it cost less, and could be disassembled and moved if necessary.
"We're not going to leave it there for someone else to use," Tilley says.
The cells range in size from 12 by 16 by 10 feet to 16 by 55 by 14 feet. Employees monitor the tests from an office outside the testing cell; they watch a computer that's hooked up to cameras within the cell, Tilley says.
Tilley says it's important for the company to stay abreast of new technology because anything that enhances things such as accuracy, productivity and efficiency keeps customers satisfied.
"We try to stay on the cutting edge because it keeps customers wanting us, rather than allowing someone new to come in and start providing that service better than we can," she notes.
A good example is phased-array, flaw-detection technology, which allows employees to perform integrity tests on iron out in the field. The company uses OmniScan MX2 machines made by Olympus Corp. Each of the portable machines and their attachments, which cost between $80,000 and $100,000, are small and safe enough to carry onto an airplane, she says.
In non-technical terms, Tilley says phased-array detection uses ultrasound technology that sends sonic signals into iron. The signals bounce around in a controlled manner and detect fissures, erosion or weak welds. Phased-array technology has been approved by many national specifications as a replacement for X-ray inspection. This enables the company to be a more mobile inspection service than conventional X-ray inspections allow.
Tilley says she believes the company's expansion will continue, with two more shops opening this year and three to four next year. One potential obstacle is skyrocketing land prices in areas the primary customer would like them to establish a facility, such as Williston, N.D.
"That's a major factor for us," she says. "But we need to be where our customers are, and it's easier for us to expand now because we're in a better financial situation (than during the company's rapid-growth phase)."