Why The Drilling Industry Needs To Plan For Failure

A contract ain’t what it used to be.

In the late 1990’s and the beginning of this century, oil prices began a steady climb that would see them reach historic levels. In 2008, the cost of a barrel of oil was as high as it had been since 1979.

So as the oil flowed more freely (while, not free, but you get the idea), every energy-producing corner of the planet committed to new projects, new contracts, and new anticipation of a lucrative market for years to come.

Unfortunately, the industry didn’t plan for all of that to disappear.

“Yet despite their vast importance, few experts seem able to reliably predict where oil prices will go next. Financial markets and policymakers are perpetually surprised by large swings.”

That’s Brad Plumer, senior editor at vox.com. For Brad, large swings in oil prices like those we experienced in the mid-2000’s is just one example of shattered expectations. Conditions that lead to a surprise in oil prices include:

  • the difficulty predicting demand
  • unexpected technological advances
  • politics

For instance, with the growing popularity of electric motors in vehicles such as the Tesla, does this represent a boon or a bane for the oil industry?

Many would argue it does, however many others would argue the distinction between what types of energy we use isn’t a priority, only that we have energy to use at all.

With so many intangibles influencing the economy and the state of the industry, it’s little wonder that corporations large and small have a difficult time planning for a decrease in the budgets of their customers.

That’s why we have to plan for the worst while hoping for the best.

How Can You Lose Money?

During the design process we work through together with our customers, we always make sure to expose any potential situations that would result in lost funds. These examples range from common best practices to the all-but unforeseen circumstances that are difficult to plan for, which is precisely why we have to try.

  • unqualified operators
  • imbalance between purchase price and sales price
  • supply outpacing demand (for machines, equipment, and parts)
  • being outperformed by the competition

Losing to the Competition

Naturally, we’re focused on our own work and our own products, and we create solutions to the best of our abilities. It’s human nature to believe in yourself when you invest your life in your career, and that’s why it’s often unthinkable that our competition might actually be competent.

However, it’s right there in the word. If your competition wasn’t competent, then they wouldn’t be your competition, right?

Right. Well, the market is forcing the strong, progressive companies to improve and it’s offering the new up and comer’s a chance to prove themselves in a, wait for it: competitive market. 

Lost Time

In addition to losing money to a range of factors like competition, the best way to pre-emptively strike against failure is to pinpoint as many potential instances of lost time as you can. This is why, before building a new attachment or fabricating a custom head or other tooling product, we spend as much time as it takes to get it done right. In the past, when a customer’s budget wasn’t nearly as tight as it is today, companies were working with new products as fast as they could be produced, because losing time later wasn’t as detrimental.

Well, those days are over. Certainly in the here and now and hopefully into the future as well if the economy straightens out, our industry can maintain processes that place value on time, energy, and of course, our investments.

The closer we scrutinize potential failures now, the less likely they’ll be to cause problems in the future.

And a future with fewer problems is one we can all get behind.

Viking West’s Cab Guards: Case Study

Have you ever caught yourself wondering out loud at the end of a day, “where did the time go?”

It’s a good feeling, it means we were engaged in our work and we generally enjoyed the day. Coming back tomorrow will be easy?

When we speak with operators and customers, one of the most common themes is that good work is easier to do when you’re comfortable, and you’re comfortable when you can see properly, the temperature is just right and you know you’re safe.

With those three aspects in mind, Viking West designed and built new custom Cab Guards that are easy to get into as they’re easy to get out of.

Cab Guard

Key Cab Guard Features

  • Escape Hatch
  • 50% lighter and therefore safer & easier to operate
  • Safe, upright shipping capability

In addition to these key safety features, Viking West’s new Cab Guard offered the opportunity to design a clever, low-tech product, which is always a worthy challenge.

Improved Roof Design

Not only does the open roof concept allow for greater breathability and climate comfort, it creates an opening for GPS signals to penetrate the cab itself.

Cab Guard 3

Finally, this version of the Cab Guard comes with a larger rain visor to keep moisture away from the operator’s field of vision.

Other key features included to eliminate unnecessary shop labour:

  • Door bumper mounts
  • Soft cover hook mounts

Work Experience & the Experience of Work

Viking West’s Cab Guards are designed to be safe and easy to operate at different times of the day, with different amounts of light and in different climates. They’re delivered upright and they’re ready to use. Less install time and less man-power, and soon you’re up and running.

Cab Guard 4

Viking West is proud of creating products that solve common (and not-so-common) problems on the job site, and there’s nothing worse than going about your business in a cab that’s too hot, too cold or too wet. The best work happens when we empower our operators to use their experience and their skill-set without distractions.

Viking’s Cab Guards are just one more piece of the productivity puzzle.

Viking West: Storefront Mentality, Global Capability

Last month I caught up with two of Viking West’s owners, Mike Schlender and Kevin Reimer. After working with national publications such as National Drilling and GeoDrilling, it’s becoming clear that the philosophy upon which Viking West was built is enjoying a resurgence throughout the drilling industry. It’s just as important to maximize budgets when buying small products such as tooling as it is when making large purchases such as SPT Auto Hammers.

Kevin and Mike first got the idea for Viking West while exploring the wilderness of North Vancouver on their bikes. It was through a mutual respect for their industry that they decided to build a company that upheld the best parts of their experience.

Kelvin Cech: Was it a sudden instant, a moment when the two of you realized the potential to start Viking West?

“It sure didn’t seem sudden!” said Kevin Reimer.

But like all new ideas, careful planning is essential if we want to get our ideas off the ground. I wanted to learn more about the company’s origins and its unique approach to the heavy equipment and attachment industry, so I sat down with Kevin and Mike again. 

You see, for Mike and Kevin, starting a company during a time of historically-low oil prices required more ingenuity than sheer force of numbers. It required a mission statement that saved costs while also contributing to the future of their company.

I hope you enjoy the rest of our interview.

Read Part 1

Kelvin Cech: Your company was built on the strength of your collective experience in the oil and gas industry, specifically drilling, forestry and construction. Tell us more about the specifics that led to the origins of Viking West.

Kevin Reimer: Correct, the experience was there and once we started designing and creating attachments specifically for our customers, that’s when ‘sudden’ came into play. The reality is that we went through so many different machines and sourcing strategies that we transitioned from a local company into a global company basically overnight.

KC: How does Viking West balance focus between the local market here in the lower mainland with a global market?

KR: There’s value concentrating on the local market, but the global capability, the international perspective is one that’s becoming more important to the economy. Everyone matters, it’s important that developing countries or countries with a developing drilling or construction industry have the tools to sustain themselves. These attachments are required throughout the world to keep things moving. We give a storefront impression here in Langley of being a small company, it looks that way, but behind us we have a massive manufacturing capability. And beyond that we have relationships with other manufacturers overseas that adds to that capability. We believe strongly in the small storefront mentality so we can work with customers in a streamlined, simple fashion while also being fully capable of handling projects on a global scale. So, small storefront, full-scale world class manufacturing capability.

KC: What are some specific products Viking West is currently working on?

Mike Schlender: We want to continue designing and engineering new complex attachments. We’re passionate about new products, it’s what we’re good at. For instance, one of our new products is a hydraulically-operated grapple that’s going to make a huge difference for companies all over the world. With the grapple as opposed to a bucket, there’s moving parts and a more sophisticated design. The end user will then be able to do more in less time and with less energy. For that you need even more customer feedback when it comes to making the design work.

KR: And that’s really why these opportunities exist for us. Viking West is only two years old and we started in the midst of a tough economic time, so designing products with a firm handle on costs was crucial, and will continue to be crucial. It’s important to work smarter instead of harder. We had to be very clever when we started to flush out opportunities and to serve customers here at home, but to emerge with a global capability as well. 

KC: And that led to the design of some unique products built specifically for the customer, or really right to the end user, right?

KR: Correct. The cat-walk product we designed kicked things off for us, it’s a simple design but it makes such a huge difference in the day-to-day operation of the crews that use it. What used to be a three-day set-up is now one. We believe in going after those specific circumstances that create more value for the customer, and the results in the field show for themselves. The catwalk is my favourite because Viking West started with that one, but that’s really how it works with everything. As we get more of an established product line, as Mike said we want to get into more involved attachments, advanced engineered hydraulic attachments.

KC: It sounds like a rewarding way to go about business, talking with people, collaborating and ending up with user-friendly products that are as enjoyable to make as they are to operate.

KR: It’s more than just selling stuff for me. It’s about getting to know everyone in our team, which includes our customers. It’s more than just the sales guy in the office, but the people on the ground using the products. I don’t want to sound too thick here, but if our customers are successful, if they’re doing well, reducing their costs and improving their margins then by association we’re successful as well.

—-

Mike and Kevin’s story might have started in a forest in British Columbia’s lower mainland, but it’s quickly grown from their base of operations in Langley and to a vast network of like-minded individuals in China, the UK and beyond.

And as long as everyone is on board with contributing to the economy with smart attachments and sophisticated products, then the team will be poised to create something new and helpful around every turn.