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Enerchem International Ltd.
The company making waves in the Alberta oil and gas industry
Business has been going very well for Enerchem International Inc. of Canada, and 2010 is gearing up to be an equally fortuitous year in the company’s history. Solid management and a product line with an unfaltering focus on achieving consistency in product specifications and quality has steered Enerchem through the rough waters of the recession. They will be a company to watch for the coming year, now well-positioned in the wake of the global financial crisis.
Enerchem are leading producers and distributors of hydrocarbon drilling and fracturing fluids used by the Alberta upstream oil and gas industry, and specialty solvents to help resolve production and processing problems to the downstream producers. The fluid hydrocarbon produced in their refineries is used for drilling by oil field service companies to fracture oil and gas wells. Enerchem has three main divisions that work in synchronism with one another. These are oilfield services, the energy marketing operation and transportation services. The latter represents the operation of Enerchem’s wholly-owned subsidiary, Millard Trucking Ltd.
Each day, Enerchem trucks take to the roads, delivering their product to clients. The trucks pick up Enerchem fluids and deliver them all over Alberta, where their clients make up the largest oil field exploration production companies.
Executive management
Kenneth Bagen, President and CEO of Enerchem, has been at the helm of the company since 2008. His love of the industry and over 30 years of experience have made him a very accomplished leader, and bestowed him with the capability of—along with his team—captaining Enerchem through the recent recession and into 2010.
“I’ve worked in the oil field service business since 1977, and I’ve always found it exciting. It is a highly entertaining and challenging industry,” Bagen says.
Enerchem battened down the hatches when the economy got rocky. Their strategy was to not to take on water, and steer clear of accruing debt.
“It’s been an extremely difficult time for the past 12 to 18 months, but Enerchem is fortunate that we have gone through that difficult period without any long term debt,” Bagen says.
Bagen explains that this strategy has boded well for Enerchem.
“In the past year, we have reported three quarters of results and they have been financially very good. We are sitting in the driver’s seat, which for me is exciting. A lot of my contemporaries are struggling with debt and are refinancing. We have been fortunate that we have come through that same recessionary period relatively unscathed,” he explains.
“As things improve now, and they appear to be improving, particularly interest in oil well drilling with $85 oil, we are having a bit of a run and we are enjoying ourselves a lot.”
Carpe diem
As Bagen points out, it is an interesting and exciting time for the oil related industry. Fracing technology, for example, has progressed in leaps and bounds over the past four years, and Bagen says that Enerchem has been affected by this advancement “dramatically.”
“The increment by which frac technology has progressed is incredible. What the introduction of multi-stage fracing and horizontal wells has done for the fluid business is significantly increase the volume of fluid per frac. We have noticed since mid-summer, 2009, the average size of our frac fluid sale has increased from 100 to 200 cubic metres per frac to 700-800 cubic metres per frac, with the largest in excess of 1000 cubic metres,” he explains.
The future is Enerchem
The same decision makers who weathered the recession so successfully now have the opportunity to capitalise on their position. Bagen and the management team are developing plans to expand the company, plans to be undertaken with the utmost caution.
“In the 32 years I have worked in this business, I have learned that diversification is a direction that one goes in very cautiously. We are staying close to our core foundations. We will expand on very logical skill set lines, so everything that we are looking at in terms of expansion is a skill set that is highly developed in our company, so it is a natural expansion of a current business that we are in,” Bagen says.
Enerchem provides a perfect example of how to capitalise on a strong market and endure a soft one. It will be exciting to see what the company will bring to the table in the following months for both themselves, and the Albertan oil and gas industry.
www.enerchem.com
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