Cartel Drilling, LLC: Bringing Back Turnkey

“We’ve now set ourselves up to compete in the freshwater well industry as well — both commercial and residential.”

Drilling oil and gas wells in the United States is an ever changing, and extremely competitive and relentless industry. There is plenty of oil and gas waiting to be discovered, it’s not easily accessible. However, drilling companies make the procurement and rigging of these oil wells an easy task by following appropriate measures up to the standards of the industry. With the foregoing in mind, we’d like to present Cartel Drilling, LLC. Cartel Drilling is a performance-based turnkey drilling contractor. It pre-sets surface casing, packages surface and intermediate casing, and turnkeys entire Oil and Gas projects. Headquartered in Wellington, CO USA, it is a privately held firm that is making its mark in the industry since its inception in 2016.

In Conversation with Shawn McIntyre, Cartel Drilling, LLC CEO

Why was the company set up? And how did you expand your company and its offerings over the years?

I was ready for a new challenge. There are other contractors out there that pre-set surface casing and do turnkey projects, but none do it with a performance mindset and are limited to the scale of projects they have at hand.

How successful was your first project roll on? Share the experience.

Cartel really hit the ground running. I was already doing the same work on the big rigs; the operation was the easy part. The challenges were getting the rigs upgraded to be able to perform like we wanted, managing personnel, and keeping them safe.

What kind of mixed responses have you received from your consumers over the years? How have they motivated you to shape your offerings/grow the company?

The vast majority of feedback from our customers is very positive. Turnkey projects demand a fast pace. Besides pace, Cartel invests in technology and extra steps in the operation to ensure quality unmatched in the surface business. Some customers, mostly designated safety hands, get a little uneasy when they see the pace at which we work, but Cartel hired a full-time safety hand and implemented a detailed safety program early on, with regular rig inspections to ensure the safety of the employees.

What challenges did you face in your initial years? What can your peers learn from it?

We got excited in our growth phase, going from 2 to 6 rigs within a couple of years. In that phase, there were projects that we took despite the risk. We’ve since set our benchmarks; what we need in contracts, etc. and we just don’t do work that doesn’t meet our criteria. We’ve learnt that it’s okay and sometimes even better to turn some work down. We’ve done a lot of jobs on handshake agreements, but on big-ticket items, we now require some form of agreement in writing, even if it’s as simple as a brief email.

How do you manage to resist/serve the needs of a highly volatile market?

It’s brutal. There are so many variables that drive the volatility in this market. From 2009 to 2016, oil ranged from $145/bbl to $35/bbl. Through this fluctuation, most operators have brought their supply costs down from $80/bbl. to around $60/bbl, which is a huge testament to the innovation in the industry. I don’t know of another commodity that comes close to this volatility. Operators in oil and gas are notoriously optimistic; we are always trying to prepare for what turns out to be the best-case scenario. All these variables that affect the volatility are out of our control (i.e. price, demand, politics (local and global), bureaucracy, etc.). Therefore, we simply try to stay level headed, plan ahead, keep our risk manageable, and stay as diversified as possible. In the past, we’ve tried to diversify within the oil and gas industry. We’ve now set ourselves up to compete in the freshwater well industry as well — both commercial and residential.

Customer service varies, but companies can still be successful. How do you maintain your customers’ trust and loyalty?

We’re always following up with customers, especially new ones while relationships are still being established. If anything is less than satisfactory, Cartel does whatever it can to make things right and ensure the issue is taken care of and will not happen again. There are multiple examples of us slashing margins and essentially doing a job for at a very low cost, simply because I don’t want to make a dime off of a job that wasn’t done to our standard.

What factors make your company lead the current market?

Simply performance. Our quality and performance are unmatched in this market. Many customers send us out to pre-set surface casing on pads more than 20 wells on them, completely unsupervised. We’ve got our supervision out there, but they just know that they can trust us to get the work done right, leave the location in a clean manner, and communicate honestly with them if something out of the norm comes up. Adaptability is another one that sets us apart. Operators are always struggling to get permits approved or amended and it’s not uncommon to get a call and see if we can get a rig on the road that day to go knock out a set of well(s). Customers continually compliment and show appreciation for this aspect of Cartel.

Where do you see your company a couple of years from now?

Cartel plans to grow its current project and client base. We believe we can improve margins by 5 percent (up to 10 percent on certain projects) by cutting operation/maintenance costs and improving drilling efficiency. The other focus is a continued effort on making the fleet as efficient and cost-effective as possible on these rig moves. Depending on how the market responds the next year, we’re prepared to add another couple of rigs that will be clean running as far as emissions are concerned, and have the capability of drilling a very diverse set of applications. These rigs would be able to drill two-mile horizontal wells, but also be mobile and efficient enough to be used to pre-set surface casing.

The Visionary Behind the Success of Cartel Drilling, LLC

Shawn McIntyre started working in rig yards at the age of 16. He worked up the ranks to become U.S. Operations Manager for Xtreme Drilling. Mr. McIntyre left Xtreme in 2012 to begin consulting for Kodiak Oil and Gas, later to be acquired by Whiting Petroleum. He bought a conductor rig and started setting cellars/conductors for Operators on the side in 2014. In 2016, Mr. McIntyre invested his profits from the conductor business and his consulting work into his first surface rig which was the birth of Cartel Drilling, LLC.

“The passion behind Cartel is to continually improve this industry with constant increased efficiency by utilizing knowledge, technology, and most importantly hard work.”