Jeff Chestnut, CEO of Coil Tubing Technology, Inc. provides information on their family of drilling tools, equipment maintenance, and being honest with customers.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back. Hello, Texas. Welcome to Texas Business Radio. Got a great program going today. We’re talking about oil and gas. Folks, I know if you’re in Texas, that sounds like a big business. It is, but believe me, it is a complex business. A lot of people think you just puncture a hole in the ground, and you get it. We’ve got a great guest here, but before we get into talking to Jeff, let me remind you that everything we do is on texasbusinessradio.com. You can go there and see everything. Videos of the guest, information about our sponsors, the hosts, everything is there. Texasbusinessradio.com. We also monitor #TBR on Twitter. Matt stays up on all night, every night, waiting for your phone call at 844-814-8144. That’s 24 hours a day, you can call. If you’ve got questions about the oil business and what you’re going to hear, you just pick up the phone and call 844-814-8144. We’ll get the answer. We’ll get it on the air. We’ll take care of you, all right? Let’s get into the oil business. I have in the studio here Jeff Chestnut, who is the CEO of Coil Tubing Technology. We immediately decided that wasn’t really what you do. What does Coil Tubing Technology really do, Jeff?
Jeff Chestnut: Jay, we provide tools that work on the end of coil or jointed pipe or stick pipe to go down in the well, and we do all kinds of different work with those tools. They’re part of what we call the BHA, the bottom hole assembly. These are the tools that go down in the well and do the work. We used to be a couple miles away from us. Now think of it: We’re three to five miles away from us, working with these tools.
Jay Curry: So meaning that nowadays they drill down, and then they’ll curve, and they’ll head south or north. You’re a long ways when you’re at the surface from where the tool is down below.
Jeff Chestnut: That’s right. They might curlicue the hole around. It’s not just straight. It makes all kinds of waves and takes kind of a funny path to get there. Our stuff is at the end of that, doing whatever they want to do. There’s all kinds of things that you do.
Jay Curry: Give us a couple of examples. Now, this is generally after the well’s been drilled, and you need to figure out or fix a problem, right?
Jeff Chestnut: Let’s look at the common … Everybody is like a frack is. After they’ve fracked the well, they have things that are in the well they need to get out of there to produce the oil and gas, for an example, a frack plug. Our tools will be part of the string going down, and the first thing in will be a bit. Behind that will be a motor. Then behind that will be a couple of our tools, maybe an oscillator or an extended reach tool. Basically, that wiggles the pipes so that it doesn’t get stuck. It doesn’t wiggle the front end of the pipe. It wiggles from that point in the tool string back to the surface, so that the pipe doesn’t build up friction between the casing. You might have a set of jars on there or an accelerator, which amplifies the signal on the jar. The jar is when you get down there and get a little bit tight, you can’t go down or back up. You can push or pull, and the jar gives a bang to that tool string, like you’re hammering on it, and jars it loose.
Jay Curry: Yeah, so it’s not a jar like a glass jar.
Jeff Chestnut: Nope.
Jay Curry: It’s when you really need a hammer to whack a tool and get it dislodged or whatever.
Jeff Chestnut: Exactly. Exactly.
Jay Curry: You have eight families of these tools.
Jeff Chestnut: Yeah, eight families of tools and different sizes, all the way from 1-1/4 inch on up to 3-1/2 inch diameter and all kinds of different things. We got the jars. We got the accelerators, which help you change the signal or the amplitude of that pulse from the pressure impact of the jar. We’ve got the oscillator, which wiggles the pipe. We’ve got the Ampli-Max, which gives it wiggle in three different directions. We have a rotating tool. Some people call it indexing tool. That’ll go down, and you push down on it. It’ll turn to the right. You pick up on it. It stays there. Push down on it. It turns to the right even further. If you’re fishing, or you want to retrieve something like a retrievable bridge plug or a packer, you can use that with that. Then we have the jet nozzles and the jet hammers and jet motors. Those are just simply hydraulically operated and pressured tools that you go down and clean out the well with.
Jay Curry: Again, this might be a very old well, right? Any well that’s been around a while is going to have some problems.
Jeff Chestnut: Yeah. During the life of the well, all of our tools will be in that well. Some of these wells are like a week old. Some of them are 40, 50 years old. We’ve actually gone in and worked in some wells that still had wooden casing.
Jay Curry: No kidding.
Jeff Chestnut: Yeah.
Jay Curry: Gee. There’s a lot of people in your business, though. You guys are very unique because you emphasize the service that you provide. That’s really your competitive advantage. Talk to me a little bit about that.
Jeff Chestnut: Yeah. We have a lot of competitors. I don’t count how many of them there are anymore. It’s just there’s more every day, more every week. We really focus on providing just not good service, but excellent service, superior service. That backs up into: How do you get there? You do that with the right culture, the morality, the ethics, the quality of the people, and the people with the right aptitude to learn and really understand the customers’ need to deliver the right kind of tools for the right kind of situation. We have a customer that needs a tool. We can get that to them in time for them to go out and catch the job. We had one the other day. They called up. It was about 2:30 in the afternoon. They needed it by 6:00 AM the next morning because they’re loading out to go offshore. 6:00 that night, we drove up to their shop and unloaded the tools they needed.
Jay Curry: Wow. One step ahead by really helping the client. You do a lot of advisory services.
Jeff Chestnut: We help them out when they have troubles or questions about, “Here’s what we’re thinking. How is the best way? We’re thinking of using this tool.” We might suggest a different tool or just tell them, “That isn’t going to work.” One of the things that we pride ourselves on is being just brutally honest with the customer, telling them the truth. We have all these things that … We’ve got over about 3,000 rental tools. When you have that many tools going out into the field and being used every day … It’s the oil field. Nothing’s perfect. It’s all kind of a little bit different. If you have a situation where it’s not going to work, just tell them up front, “It’s not going to work, and don’t use that.” They’ll appreciate that better. At the same time, we try and keep them stocked up with tools that they need for their upcoming job so that they’ve got everything on their rack in their shop. They can get it, and they can load it out casually or a couple days ahead, whatever, drive out, have what they need. We have to be very efficient with our process. We have a very detailed process. It’s a little bit different in our process. I actually will bring the tools back in after they’re run, after everything’s run in the hole. We do a nondestructive test on it. We’re looking for defects in the metal. We don’t check just the top and bottom of the tool. We check every part, external and internal. That whole process, to bring it back, tear it down, clean it up, inspect it, put it back together, dress it and make sure it works, test it again, put it back on the rack, and get it delivered, takes a little over a week.
Jay Curry: You know wells are very, very expensive to run. You can’t be down waiting for a simple, little fishing tool or something to be broke. It’s millions of dollars wasted, so that’s very important part of your business is to be productive and efficient.
Jeff Chestnut: We pride ourselves on being that way with our customers. We have customers that could get tools cheaper from another competitor, and they do not. We have customers that are large companies, and they use our tools instead of their own company’s tools because ours work better. We deliver them on time, and they’re always in the order they need them. They’re always ready, so they’re ready to roll. Time is money, and they can’t afford to be down waiting for things to get built or designed or in a machine shop. They need to have them out on location.
Jay Curry: Now, you don’t just sell them. You rent them. You’ll do either way.
Jeff Chestnut: Yeah. We sell. We rent. We lease. I have all kinds of different arrangements. I had a project in North Sea, for example, that they couldn’t get them back to us every week after they ran them. We trained their staff on how to dress the tools over in Aberdeen, Scotland. They did. They redressed them, bought the parts from us, and then reran them and sent them back every couple months for us to really clean them up and do a good job on them. If they buy the tool from us, I’ll service the tool for them as well.
Jay Curry: One of the big things about exceptional service that, talking to you, I really got appreciation for is the concept of honesty. You’ve got to be honest with these folks because millions of dollars could be lost just over them taking the wrong approach or using the tool wrong or not having it checked. That’s critical for your company, isn’t it?
Jeff Chestnut: It is. It’s really hard when you get the big egos out there, and you told them they’ve run the tool differently than they should have. They’ve done it poorly, and there’s a damage caused to the tool. That’s not going to give them the best service of the tool in the well. They’ll get over that, and they come to appreciate that. They’ll keep calling you back because you are brutally honest with them. If they break a tool, you’re going to charge them for the break, but you’re just honest with them. If there’s a problem-
Jay Curry: Tell me where to go.
Jeff Chestnut: Yeah. If there’s a problem with the tool, then just upfront admit it. Say, “That didn’t work right. We don’t know why,” or, “We do know why.” See, you have to work with them and just be totally, brutally open and honest.
Jay Curry: So there you have it. Folks, we’ve been talking to Jeff Chestnut, just like the tree. Jeff Chestnut, CEO of Coil Tubing Technology. Jeff, if somebody wants to know more, how do they get ahold of you?
Jeff Chestnut: Two ways. They can call us on the phone, 281-651-0552, or they can call us or get ahold of us on the web. They’ve got a form they could submit on the web, or they can look at the catalog on the web. Get ahold of us, and we’ll hook you up with one of our sales guys. They can come by and sit with you and talk with you in your shop and work out what you need.
Jay Curry: And count on honesty. Jeff, great story. Thank you for coming. Folks, this is Jay Curry. We’re going to have to take a break and pay a few bills, but there’s no time to run off. Stay right where you are. We’ll be right back.
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Along with hosting “Texas Business Radio”, Jay is a Professional Certified Coach and Master Chair facilitating four Houston-based Vistage peer groups. In addition to being a best selling non-fiction author, the 2015 release of his award winning novel, Nixon and Dovey: the Legend Returns, adds novelist to his title. Jay holds a BS in Mathematics from Oklahoma State and an MS in Computer Science from Kansas State. You can learn more about Jay HERE.