Eveready Directional Boring

The right direction┬áKeith Regan details how an aggressive acquisition strategy has made it possible for Eveready Directional Boring to be a full-service provider to oil fields and other industries. When Lyle Jeffries first launched his directional boring business in the Canadian province of Alberta, it was with a single piece of equipment capable mainly of helping contractors install utilities without digging open trenches. The boring specialty was relatively new to Western Canada, and competition was scarce.┬á  Today, Jeffries is vice president of operations at Eveready Directional Boring, with his firm, Red Deer Directional, one of several rolled up by its publicly traded parent company, Eveready Income Fund. The directional boring division is one of several oil field services firms under the Eveready umbrella, including those that provide surveying, airborne imaging and equipment rental services. For its part, the boring division has grown to include twenty boring drills and thirty pieces of equipment in all, including directional drills, punch trucks and auguring machines, some of which are capable of drilling holes up to 3,000 meters in length and 40 inches in diameter.JeffriesÔÇÖ firm was acquired by Eveready in 2006, and a number of other buys followed. The result is a regional firm that can quickly dispatch drills to job sites across most of Alberta and has the capacity to service oil and gas field customers as well as those in construction and the sizable municipal market. The onetime niche industry has grown in large part because of the environmental benefits of using directional boring over the open-trench method formerly used to install pipelines, utility conduits or similar work. ÔÇ£The majority of our work comes from those situations where you donÔÇÖt want to disturb the surrounding landscape,ÔÇØ Jeffries says. ÔÇ£You might want to avoid disturbing the creek bed of a fish-bearing creek or just to keep disturbance to a minimum in a built-up area.ÔÇØ Meanwhile, the cost difference between directional boring and open trenching has shrunk considerably in the past decade. ÔÇ£We get jobs now where thereÔÇÖs no specific reason to use directional boring, but the cost difference is so slight that our customers want us to come out there, do the work quickly and keep the job moving.ÔÇØFor Eveready, being large enough to serve multiple customers at once and serve them quickly is a key part of its value proposition. Oil field customers in particular often need timely service, and having a presence in various parts of Western Canada helps Eveready meet those demands while also reducing travel time and the associated fuel expenses. ÔÇ£On an oil field project, you could have a hundred guys waiting around for this part of the pipeline to be pulled, and you canÔÇÖt have the entire job delayed,ÔÇØ Jeffries says. ÔÇ£If you canÔÇÖt get a drill to them that day, theyÔÇÖre going to move on to the next company on the list.ÔÇØThere are far more companies offering those services now than just a few years ago, though most remain relatively small companies, Jeffries says. ÔÇ£Our customers know that when they call, we can supply them. ThatÔÇÖs a problem the smaller operators have: they might do a fantastic job, but they might not be able to service some customers as quickly,ÔÇØ he adds. Getting on to a job site, getting the work done quickly and getting on to the next is often largely up to the drivers and operators that the firm says are one of its most precious resources. The firms Eveready has brought together have seventy years of experience in the boring field all told, an invaluable commodity. ÔÇ£When I started out, the hardest thing to get was the equipment,ÔÇØ Jeffries says. ÔÇ£Now the equipment is relatively easy to acquire, but itÔÇÖs the talent to operate it thatÔÇÖs difficult to come by.ÔÇØ In fact, one of the biggest challenges to the long-term growth of the company is likely acquiring and keeping employees who bring the specific skill sets and attitude needed for the job. Most rigs require a class 1 license, and from there, a skilled hydraulic operatorÔÇÖs touch to operate the rigs themselves. And those hydraulic rig operators are the same workers being heavily pursuedÔÇöand typically well paidÔÇöby oil field companies themselves. Eveready can offer its own advantages to those employees, including the opportunity for greater work variety.ÔÇ£This work appeals to certain types of people who want to get into a job, get it done and get on to another one, rather than being in the same spot for months on end, as they would on the fields,ÔÇØ he says. Often, the directional boring work takes place in the most challenging terrain on a job site, making safety a top priority for Eveready. All operators and drivers must have basic certifications and those required to work in the oil fields all undergo additional training conducted by Eveready itself.That search for experienced talent is what has Eveready keeping an eye open for additional acquisition opportunitiesÔÇöthough a recent dip in the parent companyÔÇÖs stock price has put additional purchases on hold for the time being.ÔÇ£The quality people are what make acquisitions big,ÔÇØ Jeffries adds. ÔÇ£If people are thinking theyÔÇÖre going to sign on the dotted line, sell out, and walk away and not continue to work, weÔÇÖre not looking for that. We need the people because it enables us to take on more areas and cover more geography.ÔÇØ The need to be closer to customers is driven not only by the need to quickly respond when work becomes available, but also by a desire to keep fuel costs down. ÔÇ£We donÔÇÖt worry so much about the fuel we burn running the drills; itÔÇÖs the travel expenses that can be a killer. ThatÔÇÖs why weÔÇÖve tried to get a base of drills out there in the market, so we can better serve all our customers. In the end, itÔÇÖs all about providing that quality service.ÔÇØ┬á