Integrity Wireline PBOG Article
Permian Basin wireline operations rank as the most sophisticated in the world. In the past decade the Permian Basin became, in fact, the world’s largest oilfield, having surpassed Saudi Arabia’s Ghawar field.
As the biggest-producing field, and as the proving ground for the industry’s foremost technologies (the United States’ industrial dominance being the reason for that), the Permian Basin reigns as the world’s laboratory for not just wireline development, but every form of oilfield services. Integrity Wireline, being a mainstay competitor in the Permian, stays in thick of things where wireline advances are concerned.
The State of the Art
That fact was shown once again when Integrity came up for recognition for its winning ways. In its February 2023 issue, Permian Basin Oil and Gas Magazine carries a six-page feature on Permian Basin wireline companies. Integrity Wireline itself comes up for discussion.
The magazine ran extensive quotes with Kelly Connally and Jonathan Deshler of Integrity as the publication analyzed the state of the wireline art. PB Oil and Gas also covered the challenges that confront wireline companies in a changing oilfield.
The article, entitled “Life on the Wire,” also discussed issues facing oilfield service companies in general. Competition remains tough. For everyone. One theme ran throughout—the competition between independent Permian Basin wireline companies (like Integrity) and “captive” wireline teams. Calling it “captive” means the team works as a department of bigger oilfield services companies. Like Schlumberger, Baker Hughes, and the like.
When Companies Are “Commoditized”
Meanwhile, perhaps the biggest challenge facing any service company in the Permian Basin today is “commoditization.” With competition being so intense, and with the wireline niche holding so many participants, E&Ps have tended to treat vendors as mere commodities. They treat each one as barely different from another. When that view becomes standard, those E&Ps tend to shop for wireline help based on price, and price alone.
But that’s a mistake. Not all wireline companies are alike. Trying to bargain down wireline companies on price alone ignores all the advantages that the better wireline companies have to offer. Those advantages can lead to greater success for operators… and even lower cost. But over the long haul, in labor saved and errors avoided.
In the article, Deshler made the case for the independents.
Permian Basin Wireline: Where It Pays to be Independent
The magazine described the situation in these terms:
Integrity Wireline PBOG Article Deshler quote
“What, exactly, is fully meant by being ‘commoditized’? Being commoditized means more than just having all considerations reduced to price considerations. It’s a phenomenon that hurts the E&P side equally as much as it hurts the services side.
“Here’s why: On the E&P side, the traditional decision makers, in the case of well completion work, is completion engineers or completion managers. These decision makers have delegated to others much of the work of screening vendors. They have farmed that role out to staffers in the procurement end of their business, or to consultants. And when these other individuals come to the task, the decision-making criteria itself starts to look different.”
The Ways of Permian Basin Wireline
The magazine continued:
“The completions manager, while he knows what he wants, is less involved in the screening. And so his own preferences factor less in the decision process. Meanwhile, a middle-manager type worries more about whether, for instance, the wireline truck is clean and comfortable. He might be obliged to sit in it.
“Same could be true for the completions engineer, but being more intimately familiar with the frac jobs, he is occupied with other aspects as well.
“What does the completions engineer value? According to Deshler, that can be an array of things.”
Perspective Makes the Difference
As the article pointed out, the criteria for decision making depends on who is doing the deciding.
Quoting Deshler, PB Oil and Gas continued:
“‘He [completion manager] cares about how many stages per month he’s getting. He cares about supply constraints of critical equipment, like greaseless lines. Additionally, he cares about the fracture geometry he’s getting from the perforating charges and the reliability of the gun systems. And of course all of this must be delivered safely,’ Deshler said.”
Perception is Everything
But the key factor is perception. Operators must look beyond the outwardly obvious.
The magazine added:
“Integrity Wireline is just one of many independent Permian Basin wireline companies that have survived multiple downturns and now are taking aim on growth in 2023 and beyond. For them, the challenge is perception. How are they perceived? Do they get lumped with the low-end providers, and do they slash their own prices to get their share of whatever’s available? Or can they differentiate themselves and thereby win more favorable rates and build relationships with the best E&Ps?
“Deshler said that his company can compete on price. But he’d rather not compete on price only. He’d rather compete as a company that brings more to the table than others do.”
“And, again, that’s a situation a lot of companies today find themselves in. Service companies who put a premium on quality want to be recognized as merchants of quality. They do not want to be commoditized.”