Anatomy of an M-U Shale Startup: Tier 1 Rental and Distribution

One of the bits of news we love to cover is when a new business starts up for the express purpose of servicing the Marcellus/Utica industry. Having started our own company–Marcellus Drilling News–we know a little bit about the challenges one faces in launching a new business. But nothing on the scale of launching a business that ends up employing dozens, even hundreds, of people. When we see that happening, we have deep respect and admiration. In 2014, Frank Catroppa, a serial entrepreneur, rolled the dice and launched Tier 1 Rental and Distribution LLC, based in Robinson (Allegheny County), PA. Tier 1 provides trucking and related gas drilling services to the shale industry. Not long after the business began, the shale recession hit with many drillers pulling back from new activity. How did Mr. Catroppa weather the downturn, having just started a new company? And how is the company doing now? The story (below) certainly doesn’t chronicle everything that goes into starting and maintaining a company aimed at selling goods and services to the Marcellus/Utica industry, but it does provide some great insights into timing, confidence, and the sheer guts it takes to believe in your ideas. Tier 1 is an inspiration for others considering whether or not to launch a product/service aimed at our industry…
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Shale Support Exclusive Frac Sand Supplier for NEPA Facility

Last September MDN told you that Shale Support Holdings, “a leading provider of frac sand and logistical solutions to the oil and gas proppant market” (headquartered in Texas, with an operations center in Mississippi), was stepping up its presence in the Marcellus/Utica region with a partnership with Tidewater Logistics (see Shale Support Holdings Expands M-U Frac Sand Business via Partnership). The partnership increases Shale Support’s operations in Ohio, Pennsylvania and West Virginia. Because Shale Support can ship sand direct from Mississippi, which is much closer than most other alternatives, the price for frac sand is cheaper for customers. Shale Support has just announced another important deal, to become the exclusive supplier for a major regional frac sand facility in Wysox (Bradford County), PA…
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The Critical Role of Subcontractors in WV Shale Industry

Charlie Burd, IOGAWV

A recently published interview with Charlie Burd, executive director of the Independent Oil and Natural Gas Association of West Virginia, yields new insights into the current status of the oil and gas industry in the Mountain State. One of those insights is the importance of subcontractors–what we call the supply chain–to the oil & gas industry in WV (and elsewhere). We often refer to producers or exploration and production companies as “drillers.” To be honest, it’s almost always a hired subcontractor that does the actual drilling. And subcontractors do a host (most of) the other pieces of getting a well up and running–everything from water deliveries for fracking to fencing around well pads to hauling away drill cuttings and brine. Burd talked about the key role subcontractors play in the process. He also said that 99.9% of the small, “mom and pop” independent producers (conventional drillers) that have been around for the past 150 years are now out of business in WV, since the rise of shale drilling. That’s a pretty startling statistic. Oh! And Burd explained the difference between “major” oil and gas companies, like Exxon and Chevron, and “independent” companies like Antero Resources and Cabot Oil & Gas. We always wondered what earned the biggies their name “the majors,” even though there are some “independents” nearly as large (in revenue) as the majors. We now know the difference…
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New WV Facility Ships First Compressors for M-U Pipe Customers

Bidell Gas Compression facility in Weirton, WV (click for larger version)

In March 2017, Bidell Gas Compression, a subsidiary of Canadian company Total Energy Services, announced it would establish its U.S. manufacturing headquarters in Weirton (Hancock County), WV–in the northern panhandle of WV (see Biddel Gas Compression Selects WV Northern Panhandle for US HQ). Biddel manufactures and sells pipeline compressors. The site they chose in Weirton includes a 100,000 square-foot building, part of the old ArcelorMittal machine shop operation. On Monday, Biddel shipped out from the new Weirton facility, their very first truckload of newly manufactured compressors. The news article we spotted says delivery of the compressors will happen today. We’re assuming delivery is to a Marcellus/Utica pipeline project, somewhere in our region, given the short time between shipment and delivery. This is a feel-good story. It is one more evidence that our industry, which used to import everything from workers to equipment, has matured. We now make what we use right here at home! Here’s the deets on Biddel’s first compressor shipment…
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Pittsburgh-based Water Provider for Shale Drillers Expanding

HydroEdge Solutions is on the grow. The company designs and operates temporary water lines for Marcellus/Utica drillers. The company started in 2013 in Pittsburgh with three employees, and today they have 92 employees! HydroEdge is looking to add another 20 employees using $8 million of debt financing they just received from an unnamed “independent, third party lender.” That money breaks down as a $5 million one-year loan and a $3 million line of credit. Some of HydroEdge’s A-list customers include EQT, CNX/CONSOL, Rice Energy, Statoil, and EdgeMarc Energy. Impressive list. Here’s the lowdown on an up-and-coming service provider in the Marcellus/Utica, flush with cash and ready to hire…
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GlobeLTR Energy Inc. Rebrands Itself as Gravity Oilfield Services

This one is follow the bouncing ball. In February 2017 Permian-based oilfield service company Light Tower Rentals merged with Globe Energy Services and became GlobeLTR Energy Inc., which is one of the portfolio companies of Clearlake Capital Group. Clearfield is the money and likely offers “advice” (i.e. directives) on how to run the business. After all, it’s their money on the line. Earlier this week GlobeLRT Energy changed names again, and has become Gravity Oilfield Services. It is a “comprehensive rebranding effort,” according to the announcement. Why do we care? Because Gravity nee GlobeLRT nee Globe Energy has operations in the Marcellus/Utica region. In fact, in addition to the mighty Permian oil play, they also operate in the Eagle Ford Shale, SCOOP/STACK, Williston Basin, DJ Basin, Marcellus Shale and Haynesville Shale–among others. Sometimes you need a score card to keep track of who does what and what they call themselves…
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Sprague Expands Fueling Footprint in Marc/Utica, Buys Coen Energy

Here’s a business you might not think about nor associate with Marcellus/Utica drilling–fuel deliveries. If you own a home and live outside of an urban area, you know all about fuel deliveries, because you likely either burn fuel oil or propane to heat your home. What you may not know is that drilling operations need a similar service–diesel fuel deliveries (mostly) at drill pads, to run the engines that generate electricity to run drilling and fracking operations. And fuel deliveries to trucking fleets, to keep the trucks moving. Perhaps an unglamorous part of the business–but vital nonetheless. Fuel deliveries run 24/7 in the oilfield, just like every other activity associated with drilling wells. Sprague Resources, founded in 1870 (not a typo!), is one of the largest independent suppliers of energy and materials handling services in the Northeast with products including home heating oil, diesel fuels, residual fuels, gasoline and natural gas. Sprague has just bought out Coen Energy, headquartered in Washington, PA. Coen pretty much does the same thing, but specializes in servicing the fueling (and storage) needs of Marcellus/Utica drillers. No financial details were included in the announcement, other than Sprague expects the addition of Coen to its company will result in an extra $7-$8 million of revenue per year. Here’s the news about one competitor gobbling up another in order to expand its presence in the Marcellus/Utica…
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Businesses Learn How to Get a Piece of $6B Shell Cracker Pie

As the mighty $6 billion Shell ethane cracker begins construction in Beaver County, PA, plenty of local (and regional) businesses are asking the question: How can we get in on the action? How can we win contracts for goods and services? The Beaver County Chamber of Commerce aimed to help answer that question yesterday at a 3-hour event held at the Club at Shadow Lakes. The “Doing Business in the Era of Shell” seminar drew a crowd of 300+. Some of the speakers were from Louisiana–where they went through a similar process when SASOL built an $11 billion petrochemical project there. Here is some of the wisdom passed along to those who attended…
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Babst Calland Adds 6 New Lawyers in Pittsburgh O&G Practice

Babst Calland is one of the biggest and best energy law firms in the northeast, with its headquarters in Pittsburgh. MDN is a long-time fan and reader of the company’s Shale Energy Law Blog. One of the ways you know whether the shale industry is getting busier, or less busy, is to watch the law firms that practice in the shale space. Here’s a bit of good news to share. Babst Calland has, in one fell swoop, added six new members to its energy practice–all of them with experience and expertise in oil and gas. Yes, the firm already has some 130 attorneys on staff. Adding another 6 energy lawyers boosts the size of the firm’s headcount another 5%. That’s pretty significant–and evidence that the Marcellus/Utica shale space is heating up. Here’s BC’s announcement of who just joined up…
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New Wireline Company Targeting Marcellus Attracts PE Funding

A brand new wireline oilfield service company called Reach Wireline has attracted an investment from private equity company Hastings Equity Partners. Reach Wireline, which is headquartered in Fort Worth, TX, either already has, or soon plans to have, operations in the DJ, Permian and Marcellus Shale plays, according to the company’s website. A wireline is a cable used to lower or retrieve equipment or measurement devices into a well for the purposes of well intervention, reservoir evaluation, and pipe recovery. Reach’s claim to fame is that it offers “leading edge greaseless cable.” The press release does not say how much money Reach received. Hastings Equity Partners focuses on investing in lower middle market energy services and equipment companies in the U.S. Hastings formed their “Hastings Equity Fund III” in 2014 with $172 million of commitments. Since that time Hastings has invested in a number of companies. Reach is the latest…
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Progress in Building $9M Natgas Valve Manuf Plant in WV

In January MDN told you that Italian company Pietro Fiorentini had signed paperwork to buy land to build a $9 million factory in Weirton, WV (see Italian Co. Building $9M Natgas Valve Manufacturing Plant in WV). The company will manufacture pressure regulators and valves for the natural gas industry at the site. One big problem: The site is a former surface coal mine and before they can build, they first must be cleaned up (“remediated”) to prevent exposure to metals in groundwater. Pietro Fiorentini and the Business Development Corporation of the Northern Panhandle (BDC) filed a cleanup plan. That plan has been accepted by the Office of Environmental Remediation (OER) at the West Virginia Department of Environmental Protection (WVDEP). After the site is cleaned up, construction will begin on the new manufacturing plant…
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New Study: Domestic NatGas Generated $550 BILLION Benefit in 2015

A new study from ICF International (commissioned by the American Petroleum Institute) reveals some truly mind-blowing numbers. The natural gas supply chain–those companies involved in providing goods and services to the industry–generated $550 billion in economic activity in 2015. More than half a trillion dollars! That’s almost 3% of the country’s GDP. From a single industry. Staggering. Equally staggering: Because we are finding and extracting natgas here at home, American consumers will have saved more than $100 billion on the cost of natural gas by 2040. That’s a private (non-governmental) $100 billion invested in our economy over the next 25 years. The 268-page study, titled “Benefits and Opportunities of Natural Gas Use, Transportation, and Production” (full copy below) projects total employment related to the natgas industry will reach 5.9 million people by 2040. Can you even begin to wrap you brain around this?! The report contains information and data for how natgas benefits EACH of the 50 states. This is a professional study by a professional firm, not just rah rah unsupported pablum like you get from radical environmentalists. These are real numbers you can believe. Frankly, the numbers tell one of the most incredible stories of the 21st century…
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First Reserve Buys EMS’ Pipeline Maintenance Platform

First Reserve, a private equity firm (i.e. company that invests big money to buy other companies, or pieces of companies), has purchased the “integrity maintenance platform” of EMS USA, Inc. EMS is a company that fixes and maintains pipelines. Some of the work they do is in the Marcellus/Utica, hence our interest in this deal. No price was mentioned in the announcement. So what, exactly, is an integrity maintenance platform? And what does “acquiring it” actually mean?…
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Italian Co. Breaks Ground on $5.5M Natgas Valve Manuf Plant in WV

Artist’s rendering of what Pietro Fiorentini will look like – click for larger version

In January, MDN told you about Italian company Pietro Fiorentini and their plans to build a factory in Weirton, WV (see Italian Co. Building $9M Natgas Valve Manufacturing Plant in WV). Since 2013, the company has warehoused and sold pressure regulators and valves for the natural gas industry out of rented office space in Wheeling, WV. Pietro Fiorentini actually manufactures the equipment they sell and for the past 4 1/2 years has held an option to purchase land in the Weirton Three Springs Business Park. In January the company committed to building a factory on the Weirton site to manufacture the equipment they sell. Eventually the manufacturing plant will employ 150 people. A week and a half ago, Pietro Fiorentini broke ground at the site, on a new $5.5 million, 100,000 square foot building. They expect the plant to be up and running next spring…
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Rover Pipeline Helps OH Short Line Railroad Expand

For some reason we’ve always loved stories about how shale energy has revitalized the short line railroad industry. Maybe it’s from some deep-seated psychological connection of playing Monopoly as a child and loving to own the railroads on the board–including the Short Line. Who knows? We’ve just stumbled across another such shale energy story connected to a short line railroad. This one involves the mighty Rover Pipeline, now under active construction across Ohio and in Michigan. When Energy Transfer, the company building the $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline began to look at logistics and where they would store all of the pipeline and other materials needed to construction the mammoth project, they happened across a rail yard and transloading facility located in Massillon (Stark County), OH. Massillon Logistics, founded in 2004 by Steve and Dave DiPietro, had launched Republic Short Line Railroad (RSL), along with four other subsidiaries, to operate at a former steel mill site (465 acres) now called the Massillon Energy & Technology Park. RSL and the expansive park were just what Energy Transfer needed for Rover. The pipeline project has provided RSL with a boatload (or rather, rail yard) of business and money to grow…Continue reading

Ridgetop Energy Services Buys Keystone Wireline Inc.

You know those Russian nesting dolls, which are called matryoshka dolls, where you open one and inside you see another? And you open that and inside is yet another? And on it goes four or five times. That’s how we felt when digging into this story. The news is that Ridgetop Energy Services, headquartered near Pittsburgh, has purchased Keystone Wireline Inc., located in Bradford (McKean County), PA. Who is Ridgetop and how does Keystone Wireline fit into the picture? That’s what leads us to a matryoshka doll…
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