Lance Schultz (L) and Jason Swanson own and operate J&L Oilfield Services LLC. The Shattuck, Okla., company specializes in land application of cuttings from oil- and gas-drilling wells.
When owners Lance Schultz and Jason Swanson founded J&L Oilfield Services LLC in 2002, their goal was to service 10 drilling wells. They have long surpassed that mark, and along the way have built a business that’s changing the landscape when it comes to disposing of the cuttings from oil- and gas-drilling wells.
Based in Shattuck, Okla., J&L Oilfield Services provides land application services of "cuttings" or "drilling mud" from drilling sites. It handles two types of cuttings: water-based and oil-based. Water-based mud is directly applied to existing ground. Oil-based mud is blended with a mixing agent, such as low-grade lime, before application. Additionally, the company hauls water from drilling sites to its own disposal wells.
J&L Oilfield Services works with a large list of customers, mainly in western Oklahoma and the panhandle of Texas, servicing nearly 70 wells. It employs about 400 people, and in addition to its headquarters in Shattuck, the company has yards in Enid, Chickasha, Burns Flat, Cheyenne and Vici. It services more than 35 percent of the active rigs in Oklahoma and more than four percent of the active rigs in the United States.
"Last year was a record year for us on several fronts," said Schultz. "Our employee list increased to nearly 400, our hours of service jumped 20 percent, and we logged a record number of miles traveled. More importantly, our safety record continued to shine. Our total recordable incident rate was well below the national average. We also maintained our record of zero regulatory fines since we founded the company."
"Our adage is ’Let’s do what is right!’" added Swanson. "We follow that philosophy in everything we do, from the safety of our work force and practices to providing the most environmentally sensitive way of disposing of the cuttings. We carefully plan to ensure sustainability and minimize impact."
J&L Oilfield Services takes a diligent approach to cutting disposal, starting with assessing the land where it will apply the cuttings. The company takes samples from a potential disposal site and tests the existing soils in its lab. It also coordinates with independent labs to conduct soil and waste research.
"We want to ensure the land can handle the cuttings with no detrimental effects," said Schultz. "If it’s all right, we’re good to go. We apply the cuttings right on top of the existing ground. Under most conditions, the area where we place the cuttings will be back to original ground level within a few months."
J&L Oilfield Services pioneered innovation in environmental sensitivity when it introduced its ECO1 land application system. During development, the company conducted a massive drilling-waste analysis and coordinated and completed multiple university research projects that analyzed total petroleum hydrocarbon degradation and salt leaching.
"Traditional waste management presents challenges, including the chance that even the most skilled operators will make mistakes that could have negative impacts on the environment," said Swanson. "We designed ECO1 to mitigate that possibility through automated application management. It starts with capturing site-specific characteristics, such as vegetation, slope, sensitive areas and site perimeters, on a mobile mapping device. It’s similar to GPS systems for planting and fertilizing on a farm or preparing a construction site."
Armed with the information, site specialists can establish an application plan. The system’s control center combines site-suitability findings, lab analysis and regulatory standards and sediment-trapping calculations to create application instructions that are wirelessly transmitted to the company’s fleet of trucks. When an application begins, the instructions automatically govern the application rate and material placement, and it ceases if a boundary is breached or if rates approach regulatory or environmental limits.
"We believe this revolutionizes waste disposal from an oil- and gas-drilling standpoint," said Swanson. "It also has applications for mining or other industries that produce waste. For instance, we can conduct a land analysis to determine if an area is suitable to take iron-rich waste from a mine. The earth will take back the natural products it produces, and ECO1 determines the proper rate to apply it. It’s true recycling."
J&L Oilfield Services Soil Scientist Daniel Kelln helped develop ECO1. He’s one of several staff members who have worked for the company for a decade or more. Original employee Bill McClain is now J&L’s data analyst, and Bryan Appel, the business’ second hire, is now parts manager. Other key personnel includes Operations Manager Tom Schickedanz and Asset Manager Hugh Landers.
"Lance and I have our defined roles. He handles equipment, building, purchasing and buying, while I oversee our field operations," said Swanson. "We wouldn’t be able to do our jobs as effectively without having a terrific staff that’s as dedicated to J&L’s success as we are. We have high expectations, but our employees consistently meet them. Our aim has always been to find the best people and take care of them. They are J&L’s greatest assets. We have very little turnover, so our plan is working. "
Reliable Komatsu Equipment
Schultz and Swanson also think highly of Komatsu equipment, which J&L Oilfield Services began using about eight years ago. It started with a WA320-5 wheel loader, which the company still owns. Working with Kirby-Smith Machinery Inc. Territory Manager Dean Traylor, J&L acquired additional loaders, mainly WA320s and WA380s, two excavators (PC210LC-10 and PC200) and recently a D65EX-17 dozer.
"We bought our first Komatsu loader in 2006, and now it has about 6,000 hours on it," said Schultz. "Other than routine service, nothing has been done to it. Based on the production and minimal downtime from that machine, we added more Komatsu equipment, and we have been just as pleased as we were with our first purchase."
Wheel loaders and excavators are used to load cuttings onto trucks. Loaders also are used to blend mixing agents with oil-based cuttings. J&L Oilfield Services uses the D65EX-17 to rip materials that are used in the mixing process and also uses it to level during land application.
"Komatsu equipment is durable, and that’s a big plus because our applications can be very tough on machinery," said Schultz. "It’s rare that we have an issue, but if we do, I know I can call Kirby-Smith, and they’ll take care of it right away, either out of their Oklahoma City or Amarillo branch. With the new Tier IV machines, Kirby-Smith handles the routine services through Komatsu CARE, which is an added bonus that saves us in terms of owning and operating costs. They call us to let us know it’s time for a service and schedule the work at our convenience. Service like that only strengthens the already great relationship we have with Dean, Kirby-Smith and Komatsu. "
J&L Oilfield Services continues to look for new avenues to expand and streamline its processes. Its initiatives for 2014 include fully integrating E-tickets and further implementation of ECO1.
"We have plans to grow our rig counts, which in turn will further our need for more people and machinery," said Swanson. "I can see us expanding our territory as well, moving into more states, and ECO1 taking an increasingly larger role in our operations. Our goal is to move into new markets, such as spill remediation, land applications in municipalities and other areas."
"We’ll approach everything we do in the same way we always have – in a safe and professional manner," added Schultz. "At the end of last year, we completed nearly 4,000 jobs with zero citations, and we expect that to continue to be the case. We’re determined to maintain a high standard of excellence for ourselves and for J&L as a company."
This story was reprinted with permission from Kirby-Smith Machinery Connection Magazine, May 2014 Issue.