When Appalachian Production Services (APS) says its goal is to provide the highest level of contract production management services for the natural gas and oil industry, it’s a statement its customers can trust. The reason is because APS isn’t just a service provider to oil and gas producers – the company is also a producer itself. President Frank Henderson founded the oil and gas service company in 1994. For the next eight years, the company focused strictly on production management until it took advantage of a promising opportunity.
“In 2002, a small customer of ours had an interest in a group of wells in southwest Virginia they were looking to sell,” Henderson recounts. “So we threw our hat in the ring and picked up those assets and became an operator at that point. The great thing about being both operator and service provider is we can fully understand what the customer is going through and what their needs are because we are wearing the hat on both sides of the business.”
Since stepping into the owner/operator role, affiliate Appalachian Energy has drilled 60 CBM wells in Virginia and owns and operates a total of 141 wells. When you add that number to the wells APS operates and maintains for customers, it’s a total of 2,100 wells along with associated infrastructure necessary for oil and gas production, such as pipelines, compressor stations and disposal wells.
APS serves six states in the Appalachian region: Virginia, Kentucky, Tennessee, Pennsylvania, Ohio and West Virginia. Henderson says the growth is focused on Pennsylvania, northern west Virginia and eastern Ohio.
“The biggest trend right now is the development of the Marcellus and Utica shale plays,” Henderson explains. “ It’s a much more sophisticated level of work that you have to provide. The wells and surface facilities are high-pressure, high-volume and high consequence. In certain areas we are producing condensate or oil in association with the gas. You need to have people that are trained properly to work safely in that type of environment.”
APS’s success in the region proves that it has met those requirements. Henderson says the company’s focus is not to just get the job done, but to get it done safely and efficiently. APS analyzes each well and each service to optimize production results and maintain cost efficiency. The process involves a roundtable discussion of each well and facility with input from well tenders, foremen, customer production personnel, engineers and management. The ultimate goal is to compile an all-inclusive list of potential improvements to increase well, pipeline and facility efficiency and safety.
Higher Level of Service
“We provide a unique level of experience, efficiency and accountability that customers may not be able to develop in-house,” Henderson says. “Production is our total focus and in most cases we can provide a higher level of service at a lower cost than if a company tried to do it in-house. We also take away the headaches associated with managing the employees and equipment. It gives our customers a chance to focus on growing their business and handling the functions they do best.”
Once contracts are secured, trained field personnel collect field data electronically on wells, facilities, pipelines and compressors. Production operations are also evaluated for safety and environmental compliance. Field data is reviewed and APS provides the customer with specific solutions to increase production, reduce operating costs and improve field operating efficiency.
“We have developed a production management system, which incorporates specific methods in how we operate wells,” Henderson says. “We collect field data, interpret the data and present it to customers. Some customers have their own production system that we tailor our reports to. For others, we provide more of a turnkey service and actually create reports, spreadsheets and coordinate third-party services.
Looking into the future, Henderson says APS will continue on the same path it’s on now – focusing on the Marcellus and Utica shales while building the infrastructure to grow in current and new markets. Part of that infrastructure includes personnel, and Henderson says the company is investing in its Operator’s Qualification program to streamline the training and evaluation of employees.
“We have a lot of experience on staff and we place a great deal of effort into training, working safely and obtaining the production efficiency our customers seek,” Henderson says. “We routinely remind our employees that the work we perform today earns us the opportunity to serve our customers tomorrow.”