McPherson Thrives in Gas Market
“I was raised on cable tool rigs by my dad,” McPherson recalls. “I worked for him and other drilling contractors off and on in the beginning. I bought my first rig in January of 1969. It was a Mayhew 1000 that I used for mineral exploration in western Colorado. The mineral market I was in was uranium. Then the Three Mile Island incident hit and interest in uranium fell flat so I had to find something else to do. By the end of 1982, I decided to go into the oil and gas drilling market. My brother was drilling in Augusta, Kan., setting surface for the bigger oil rigs, and he said there was a possibility of work in southeast Kansas. So I went on down there to get set up and my family followed some six months later.
“Today, 98 percent of my business is coalbed methane gas,” he explains. “That market opened up in the late 1980s, but didn't really take off until about 1997-98.” The company currently is running three rigs - two GEFcos and a new Ingersoll-Rand T3W DH70, which is rather unique.
“Ron has been a customer of ours for about 10 years,” says George Gummere, vice president of Venture Drilling Supply in Tahlequah, Okla. “Our first transaction involved auxiliary air - a compressor - and over the years, we mainly serviced his account with hammers and bits. Obviously, we developed a strong relationship with him and his son, Mac. The time came when he wanted a rig with deeper capabilities than the one he was using at the time. Fortunately, due to both of our locations, we were able to meet right at the Ingersoll-Rand factory. Just four hours away, it's a beautiful facility - very impressive.
“We all sat down and were able to hammer out what Ron was looking for, what his needs were, etc. This particular machine - the T3W DH 70 - is the first machine that Ingersoll-Rand has come out with that will reach those depths while on a conventional cabin chassis instead of a crane carrier. McPherson has one of the very first units to be produced and it's the only one currently being used for gas drilling. This one has some innovations and little tweaks on it that make it more adept at gas drilling than water well drilling. The T3W has 70,000 pounds of pullback - his other ones had 40,000. So in rough numbers you have 70,000 divided by 20 pounds per foot, giving you a 3,500-foot machine compared to a 2,000-foot machine.”
Sharing the Vision“We got on board with Ingersoll about six years ago and that really helped our company turn the corner - it was like night and day,” Gummere explains. “We work with a lot of super-talented people over there. Probably 85 percent of our business right now is coming from the gas drillers. Years back, it used to be from the water well industry.”
And McPherson feels similarly happy about his relationship with Venture. Touting the firm's integrity, he says, “Venture has been tremendous. They're fairly close to us and the service is excellent. I really didn't start buying a lot of supplies from them until 1995-96. Most of the supplies that we buy from them are overnighted to us. When they tell you they're going to do something, they do it.”
The oldest of McPherson's rigs is a 2002 GEFco but that's going to change. “George at Venture Drilling had an old Failing drill rig - a 1953 model - and I kind of traded him out of it,” McPherson notes. “We're going to rebuild it. I finally found a truck to put it on so we're going to revamp it and rebuild it over the next two or three years - hopefully sooner than that.”
“We usually run a rig approximately three years, depending on what we have on the books and what our future looks like,” McPherson explains. “We like to do what we call 'getting the good out of the machine' - 3,500 to 4,500 hours. Then, if we get the proper trade-in value, we're ready to turn it. We've gotten real good results that way.”
Currently employing 13 people with no plans for expansion in the immediate future, McPherson Drilling truly is a family operation. Described as indispensable, Nancy, Ron's wife, makes sure the office runs smoothly. And like many a driller's son, Ron's boy, Mac, worked for the company from an early age. He then went out for four years to work with a cementing and well-treating company. “That was tremendously beneficial,” Ron says of the experience Mac gained working in an outside environment before returning to the family business. Asked what title his son enjoys, Ron says - with a prankish grin - “Tool pusher and operator,” adding, “He runs a lot of the day-to-day operations now, and he'll be taking over when I retire in a couple years.” Will Mac be taking the company in any new directions? His dad: “I think he'll make some changes to some extent - reaching out into other markets, for instance.”
Out in the FieldAt the drilling site we visited earlier this year, “The customer on that job was Dart Cherokee Basin,” McPherson explains. “They are one of our primary customers; they're really strong in the coalbed methane gas exploration industry. We probably drill more for Dart than we do for anybody. We've been working with them for two years. We've drilled in excess of 250 wells for them and we'll probably drill at least that many more for them - maybe up to 500 more.
“In the last three years, the prices of gas have been such that they can make a profit. When I first got here, there were instances when gas sold for 70 cents per mcf. Now the price is $6.34 - quite a boost. The technology involved in extracting the gas out of the coal has really advanced tremendously; the engineers have made a lot of inroads.”
This was a typical project for the firm and McPherson explains the basic steps: “On day one, we set surface - anywhere from 20 feet to 180 feet - and cement it in. The next day, we come out to drill - normally to 1,100 or 1,200 feet. We stop in that area in order to stay out of excess salt water. The next day, we come out, total depth the well, move and set surface on the next well. So we drill 21⁄2 wells a week. We've got a solid system that Dart likes to live with and we don't have those situations where you have a real long day one day and then a couple hours of work the next day. We could drill the well in one day, but then we'd be there until 10 o'clock at night.”
Asked about the competition in his market area, McPherson reports, “In this particular area - northeast Oklahoma and southeast Kansas - we're saturated with drilling contractors. Farther north, in what is called the Forest City basin, it eases up a bit and I think there would be good opportunities for contractors drilling in that area - provided they have the right contacts.”
And the geographic size of his market? “We've traveled a long ways,” he relates. “We've traveled to Arkansas and we've traveled to Rock Springs, Wyo. If the price is right, we'll go. When we go out to do a job, we do it efficiently and in a timely manner, the way it's supposed to be done. Other drilling contractors have gone to Dart with cheaper prices but they don't get hired because of our reputation and our production. Initially, we had to bid the work but after the first year, it was negotiated. It's the same with our other customers.”
“Good equipment and good personnel are the keys,” stresses McPherson. “Take care of them and they'll usually take care of you. We're pretty consistent with the drillers and the lead helpers, but when it comes to the third man, sometimes we do have some turnover.”
At this point, the turnover Ron is most excited about is turning over things to Mac. After our visit, I would expect a rather seamless transition.
The New T3W-DH70The new model T3W DH70 from Ingersoll-Rand combines the features of the T3W/1070 with a new 70,000-pound derrick and feed system.
Performance and speed were key considerations in the development of this drill: The feed system incorporates large-diameter Nylatron sheaves and a large-diameter sheave feed carriage designed to increase system efficiency and also reduce fuel cost, hydraulic demand, cable wear and weight. The system's twin feed cylinders are inverted to achieve a pullback capacity of 70,000 pounds.
A Catepillar 565-HP deck engine powers the I-R air compressor, which provides 1070 cfm/350 psi. The T3W-DH70's 36-foot derrick has a rated capacity of 140,000 pounds, featuring a retractable centralizer, night lights, a hydraulic breakout wrench, an air-operated holding wrench and more. The four-motor rotary head offers 8,000 foot-pounds of torque at 0 rpm to 110 rpm. Dispensing the torque of four motors evenly over the main drive gears is intended to reduce component strain as well as the weight and size of the rotary head while also providing the speed and torque seen in other much larger, heavier drills.