Kindersley – Most people wouldn’t think of jumping into an industry right when things are at their lowest, but that’s exactly what Bear Trapp and his partners did in 2016.
They founded VP Energy Services, a storage pipe yard just outside of Kindersley.
“We have 50 acres of storage for OCTG (oil country tubular goods); casing and tubing and we have a mud warehouse and a delivery arm as well,” said Bear Trapp, founder and president, by phone on Aug. 13.
They also store oilfield equipment for a number of other companies.
“We’ve got winch tractors, picker trucks and heavy highway trucks. And we’ve got a fleet of one-tons for hotshot services.
“Southwest Pipe built the pipe yard we are now headquartered in, in 2014, and we took it over in 2017,” he said.
The principle yard, 40 acres in size, is 16 kilometres east of Kindersley, along Highway 7, close to Netherhill. They have an additional 10 acres inside Kindersley, including a five-acre rail yard in town that they purchased from CN.
“It was about a two-year process, but we finally got ownership of the land in the summer of 2018. That’s where we unload the rail cars. We can store the pipe that comes in by rail there.”
The previous users of the rail facility would unload it there, then load it onto a truck and move it, thus handling it twice. “We can unload it right from a rail car, build racks in that five-acre yard and set it up right there. I find it a lot more effective and cost efficient,” he said.
The company saw the impacts of the recent tariff war on steel between Canada and the United States, one that was recently resolved. “Since the tariff war went on with steel, we probably went six months without getting a rail car,” Trapp said. “All the pipe was coming by truck from the two EVRAZ mills in Alberta. There was a 25 per cent tariff on steel. We (Canada) put it on America because the Americans put it on everything outside America.”
The majority the pipe is still coming out of Alberta, but with eight rail cars last month, things are coming back to normal again, according to Trapp.
“We don’t source the suppliers. The pipe companies do. We’re a storage location for them.”
Operations like VP Energy are sometimes referred to as “pipe custodians.” Trapp agreed with that description, saying, “That’s what we are. We’re more of a transfer station, where we hold the pipe for the pipe ownership companies out of Calgary, and they sell it directly to the oil companies, out of our yard.”
The money is made on the pipe handling and trucking.
“We have seven highway trucks, two pickers, and three hotshot trucks,” he said.
There’s another pipe yard in Provost, Alta, that services the Viking play, but Trapp likes to say, “We are the pipe yard that’s located in the heart of the Viking.”
“We have about 32 employees. We’re pretty busy,” he said.
Operations are 24/7.
The company fired up in 2016. It has a number of investors from southeast Saskatchewan. Board members include Jim Fox, George Sereggela, Wayne Paproski, Dennis Day and Doug Trapp, in addition to Bear Trapp. The board makes up around 70 to 80 per cent of the ownership.
One might recall that 2016 was the depths of the oil downturn. Asked if the timing was either a genius move or a crazy one to fire up that year, he replied, “a bit of both.”
He said he and a couple of friends he grew up with in southern Saskatchewan were looking for oil and gas assets in the crash.
“When we crunched the numbers, we saw the Viking area had seen almost 50 per cent of holes drilled. (in Saskatchewan). As a service business, that was attractive to us,” he said.
“We did a lot of research before we went out and took this risk, but we were all around 30 years old at the time, and we thought we would take this risk now at 30 rather than 40, because oil tends to take a dive every eight to 10 years,” he said.
(Trapp played junior hockey with the Estevan Bruins in 2004-2005, and received a NCAA scholarship while playing with them.)
While a lot of people are still sour about the oil downturn, now entering its sixth year, Trapp has a unique perspective on it. “The day that we started the company, oil was US$31 per barrel, so in most industries, if the underlying commodity doubles in value, you would think business would pick up dramatically.”
According to sister publication Rig Locator(riglocator.ca), there were 12 drilling rigs working around Kindersley the day of the interview. VP Energy was servicing the majority of them.
A common occurrence operating in west central Saskatchewan is the quick imposition of road bans when it rains. “The RMs are very touchy. An inch of rain and they put a road ban on for 24 hours,” he noted. And that has implications.
“The last week of June, we were expecting having a good month. We basically did nothing the last week of June, when all that rain came,” he said. “That cost us a significant amount for the end of Q2, but you imagine those wells are going to be drilled anyways.”
“We offer storage. Northern Mat and Bridge is moving into our yard this week,” he said. VP Energy will be moving their mats. It’s a good match, as he noted, “We have trucks, loaders, drivers and trailers going to every location already.”
The mud storage warehouse is the exclusive warehouse for Newpark Drilling Fluids. “We store and deliver their mud. We have our own vans,” he said.
VP handles the delivery for Newpark clients all across Saskatchewan. This includes some of Newpark’s biggest clients, which are the potash mines of Saskatchewan.
VP also has developed their own product, what they call “mud cans.”
“We started building mud cans with four-sided doors on a skid,” he said. That’s a 40-foot sea can welded on a typical oilfield skid. As it sits on the ground, there are no stairs to climb up, and then climb down, carrying heavy bags.”
“They’re much safer for all the people on the rig,” he said. They’re much easier on the roughnecks, and the rig movers like them.
VP Energy made four mud cans this year, and may build more in the future.
