On February 9, 2016 7:37 pm
Mustang Oilfield Services owners get creative with their business model, hauling both water and equipment to customers in the Marcellus and Utica Shale plays.
An array of water-related amenities is offered to these customers, including water acquisitions, freshwater and residual waste hauling, and water transfer services. The freshwater, which is obtained from various sources such as lakes, rivers, municipal supplies and groundwater, is delivered primarily to active frac sites but also during the drilling phase as well.
Water reuse is gaining momentum in the area, CEO and owner Greg notes. In the past, these companies were paying to haul water away and paying to haul different water back in. Now they’re just transferring from one site to another. It reduces truck traffic and reduces the amount of freshwater that’s needed, which ultimately saves on costs and allows these companies to be better environmental stewards.
Typically, Mustang Oilfield Services is not the only vendor hauling water at any given site. Its 10 or 15 trucks often work in tandem with another 20 to 100 additional vehicles, depending on the specifics of the project at hand. They generally haul about 5 to 7 million gallons per well depending on how the operator has decided to handle the job. Each of their trucks can carry on average 4,500 to 5,000 gallons, so it amounts to plenty of loads and plenty of travel.
What they’re seeing a lot of right now, Greg explains, are multi-pad setups with anywhere from six to 10 wells on a pad. In these cases the water totals are significantly higher, reaching levels of roughly 30 to 70 million gallons in total.
RANGE OF SERVICES
The company’s offerings don’t stop at water, however. Mustang Oilfield Services also offers flatbed trucking, hotshot services and winch truck services — hauling equipment, rig mats, containment fixtures, frac tanks, pumps, drill rigs and super sacks of pellets and wood chips for other companies that contract with them. This can take place at any stage of the game, from the very early phases of pad construction through drilling, and even up to completion of the well.
While most companies haul one or the other — water or equipment — Greg says their business model is a bit unique by design. It stemmed from the realization early on that there was a need to be varied in both customers and equipment in order to level out some of the ups and downs of the water truck business. The trucks might work hard for a while and then be down for a week or two until the next job starts, and that’s where they fill in work with the flatbeds. “It seems to have worked out well for us,” he adds.
While Mustang Oilfield Services mainly assists E&P companies, the other oilfield service companies that need assistance hauling their equipment make up a huge customer base as well. Less frequently, the company also steps in to help those who need water delivered so that another contractor can test the pipelines, and occasionally they’re called in for hydroseeding and soil stabilization, too.
GROWTH DESPITE DOWNTURN
Now into its third year of operation, Mustang Oilfield Services is still a fledgling company that has had to deal with the growing pains bound to accompany tremendous expansion during a short period of time. What initially began as a staff of 12 and a fleet of four water trucks has blossomed into a staff of over 70 and 20 water trucks.
“We have had much more growth this year as a company than we did last year, and I think that is a testament to the team that we have here, from our drivers up to our management,” Greg says, noting that it’s been a difficult year for the industry as a whole. Although the downturn in crude oil prices hasn’t impacted the company to a large extent since the region doesn’t produce much of it, he explains, natural gas isn’t doing a whole lot better. In turn, the company has been careful to re-evaluate its operations and make improvements whenever possible in order to watch costs and run lean.
Results of this process include the addition of a supervisor or manager in the field 24 hours a day, the opening of a satellite location in Bentleyville, Pennsylvania, in order to provide better service to customers in that region, and the inception of their own in-house garage with four mechanics and one shop technician, which now operates 24/7 and minimizes downtime.
“Everybody has sort of bought in and understood that this is going to be a tough year and that everybody needs to do a little bit of everything,” Greg says. “We’ll come out the other side stronger by making it through this downturn right now.”
Although this husband-and-wife duo are new to the industry, they have plenty of team members who’ve seen it all. “This is not their first rodeo,” says Megan, director of marketing.
“This is not their first downturn. Their comments are, ‘We made it out of the last one, and we’ll make it out of this one.’” As long as the company remains proactive and listens to what customers need and want, she adds, Mustang Oilfield Services will continue to be an asset and will continue to work with its customers to accomplish projects.
PARTNERING WITH VENDORS
The company’s fleet consists of 41 vehicles total, including 20 water trucks (Mack, Volvo, Kenworth, Peterbilt, and International); six tractors, five of which are winch trucks (Mack, Peterbilt, Western Star, and Kenworth); a variety of standard and oilfield flatbeds (GMC, ITI Trailers & Truck Bodies, Doonan, and Holden); a lowboy trailer that goes behind their tractors (Talbert Manufacturing); several hotshot pickup trucks (Ford and Dodge); and a gooseneck trailer (PJ Gooseneck). Rounding out the equipment lineup is a vacuum trailer (Dragon Products), a roll-off truck (International), a utility trailer (Car Mate) and a couple of SUVs (Chevrolet and Ford).
“In our business we sell time,” Greg says. “Our time comes along with a truck, but an hour of downtime is an hour we’ll never get back as revenue. So we’ve had to find vendors we can partner with that run some of the same hours that we do and stock the parts that we need so that when we do have a truck go down, we can quickly get the part, quickly get it fixed and quickly get it back on the road.”
Because the company has a very diverse fleet when it comes to OEMs, it’s not practical to stock their own parts, so they rely on trucking vendors like Wheeling Truck Center and Hunter Peterbilt, body tank manufacturer ITI Trailers & Truck Bodies, and Ziegler Tire, which offers 24-hour roadside service — a particularly helpful offering for a company that runs trucks off-road and damages tires at all hours of the day and night.
Although they deal with a lot of truck-related vendors, another key partner, the Cooks note, has been safety contractor Nathan Ray with Top Hand Training. “He has been such an asset to us to be able to bring in a fresh face and keep us compliant with all of our customers,” Megan says.
This year, Mustang Oilfield Services began efforts to replace older trucks in its fleet with newer vehicles, while also putting larger tanks on trucks than what the industry norm was three or four years ago. “By doing that we can deliver 20 percent more per truck,” Greg says, “which over time means fewer trucks on the road, fewer trucks driving by people’s houses, and being able to accomplish the jobs faster.”
After all, the process of striving to find ways to improve upon current methods and practices is part of what the Cooks seem to enjoy about their line of work. “The industry as a whole excites me,” Greg says. “It’s a very, very fascinating industry to be a part of. It changes every day. There are challenges every day.”
Two years ago, it would take over 40 days to drill a well in their area, and that same work now takes 18 days utilizing recent advances in technology, he explains. “We’re not a factory that produces the same product the same way every day,” he adds. “Every day our customers challenge us with something different, and it’s a lot of fun to solve those challenges.”
And in his view, continuing to solve the issues posed by customers will only lead to added business expansion and success. “I see us having additional growth over the next few years, which is exciting,” Greg predicts.