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Terry Gunderman SE Sask Oilman of the Year

Riding out this downturn

Oxbow - Terry Gunderman of Oxbow was honoured in early June by being inducted as one of two Southeast Saskatchewan Oilmen of the Year during the Saskatchewan Oil and Gas Show in Weyburn.

Pipeline News caught up with Gunderman at his Oxbow office on Aug. 10 to discuss how he got to where he’s at.

First of all, he hasn’t gone far. The land their shop is on is the farm his parents bought in 1960. His parents followed his dad’s drilling rig when it came to southeast Saskatchewan in 1953, right when the southeast oilpatch was starting to get established.

“My dad worked on drilling rigs. I followed him around,” he said. “In the end he drilled and pushed. The last ten years on the rigs working winters. ”

Terry has spent his life working, owning and operating service rigs.

“We’re a well servicing contractor. We do repair and maintenance on existing wells and workovers and completions on new ones,” he said of Red Hawk Well Servicing Inc.

This is the third time at it for Gunderman. The previous two incarnations were sold with impeccable timing, just before the industry came to a crashing halt in a slowdown. This time, he’s riding it out.

“I started in 1977,” Gunderman said. “That’s 38 years now.”

He was still in high school at the time. He tried his hand at farming for a few years, but it wasn’t for him.

“I tried a little bit. I wasn’t a successful farmer. I harvested my last crop in 1988 and sold my cows in 1985.

“At one point I thought maybe I’d like to be a farmer, but I got wrapped up in the life of the oilpatch,” he said.

It’s been the oilpatch ever since.

One thing he reiterates several times through the conversation is the importance of his wife, Shelley, as his business partner in all his ventures. On Aug. 30, 2015, they will be married 35 years.

“I’m pretty lucky. I am. I married my high school sweetheart,” he said.

Shelley ran the office for 25 years, and has stepped back a bit in recent years. She still does the accounting and acts as the company’s controller. But instead of having an assistant, now she often helps out as the assistant.

But before there was any office, there had to be a rig. Gunderman became a part-owner at a young age, just 19, in 1980. He had been working for Widney Well Servicing, and Alberta-based company with operations in Kindersley and Oxbow.

“Bill Snider and I left there in 1980 and with some backers, including Bill Dutton of Estevan, we started Anchor Well Servicing,” he said. 

They ended up selling the company in February 1986, just before things turned south.

“We had been negotiating. We didn’t think it would happen, but we sold. I stayed on with them a while.”

Gunderman noted how from April to the end of that year, things were bad. Indeed, this year is looking like it might even be worse than 1986.

He played around a bit with the farm, and took a trip with Shelley that they had never been able to do before. They headed east for several months, and his eyes still shine talking about it.  

“In May 1987 we bought Red Hawk, a company out of Estevan. It was Shelley and I, Bill Snider again with his wife Adelle and a few more partners, Bill Rae, Russel Kerr and my brother, Mike Gunderman for a short time.”

They started with one rig.

Bill Snider left in 1989 to focus on his own oil company. Bill Rae retired in 1993, and Russell Kerr got out shortly afterward.

“At that point my wife and I remained as the sole shareholders.”

That company was sold in 1997. Again, he got out at just the right time, as times were tough for the industry in 1998.

Gunderman said, “They came beating hard. We accepted the offer.”

It was a tough year for the Gundermans. Shelley’s father passed away, as did a close personal friend.

The new owner was Jetstar, a small public company whose only asset was Red Hawk.

“When we sold to Jetstar, it was like a tonne of bricks off my shoulders,” Gunderman said.

Jetstar merged with another company, Petro Well Servicing. Then Cenalta bought the combined entity. They also had rigs in Weyburn. There were a total of 28 service rigs under that banner in southeast Saskatchewan, and a total of 160 overall.

After a while Gunderman found working for others hard to do when you’re used to being your own boss. “It was just change, and it wasn’t for me,” he said.

A few weeks after tendering his resignation in the spring of 2000, several key employees he had worked with for years tracked him down. They didn’t want to stay with the new company, either. So Gunderman went out and bought a new rig fairly quickly then built two more. Red Hawk was more like a phoenix now, reborn.

The company endured the 2008-2009 slowdown without too much difficulty. “2009 was a bit of speed bump. We went from working seven days a week to having days off on weekends,” he said.

This time around Gunderman is riding out the stormy times.

There’s a hiring sign on the edge of Red Hawk’s property in early August, but by this point Gunderman noted it was more for decoration than anything. “We did hire some guys in July. Anyone whose got a steady job right now should hold onto it for dear life, in my opinion.”

Earlier this summer the company took delivery of its eighth service rig, a brand new unit.

“We couldn’t send it back. From the time we ordered it to the time it got here, there was a drastic change in the amount of work.

“We’ve been through a lot of these. This is a tough one,” he said.

He noted in recent years there have been frustrations with increasing regulation. Pointing out he’s lived his whole life in the area and intend to keep doing so, thus the environment is important to him. He’s very much in favour of safe work practices and the environment. It just seems that increasing regulation makes it harder and harder to do business.

“Regulation is killing the industry. In these economic times, it’s an added burden. Companies can’t handle it right now.”

“I’m not against any of it, but it is what it is. Common sense is a bad word nowadays.”

What has made a difference over the years is working with good people. Gunderman said, “I’m surrounded by very good people.

“Those core people are still here.

“There’s 55 of us. We’re holding our own. We had a decent July, the best month so far in 2015.”

Drilling is always up and down, cyclical in nature, but service work is typically a steadier pace, he noted. “This slowdown is a lot less typical,” Gunderman added.

Smart Power

In 2008 a new venture, Smart Power, was started with Terry and Shelley and their partners Trevor and Tammi Goetz.

“Trevor used to work on the rigs at Red Hawk,” Gunderman said. When it sold, he went to work for a production company. He started running a handful of generators on the side for a few years, and the business grew to the point where it was either jump in with both feet or give up, so they jumped in. Goetz started running Smart Power full time, and they bought 20 more units in 2011.

That total is now 135 of their distinctive orange trailers that look more like cattle trailers than a typical gen set. The enclosed design is meant to discourage fuel theft as well as provide its own secondary containment.

They’ve also added a few light towers of their own design along the way for clients who have been asking for the service.

“This is Smart’s main shop,” Gunderman said of their Oxbow location. With drilling activity down right now, there are plenty of gen sets in the yard. Trailers are brought into Oxbow where they are assembled with their respective generators.

Another location was opened in Virden, Man. last spring.

Shelley is very active with her horses, while you will find Terry on his motorcycle a bit. “I’m not a biker, but I have a bike,” he said. They also fish a bit and enjoy the use of their boat.

Gunderman noted with a glint in his eye they’re new grandparents, too.  

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