Posted By Lyndsey Kleven, Communications Coordinator,
Tuesday, December 15, 2015
The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven email@example.com
You can trace Eddy Biehl’s family history in oil and gas back to the 1870’s. Eddy’s great-great-grandfather briefly strayed from farming to give the oilfields a try but discovered he didn’t like it. The industry at some point busted in the 1870s and he went back to the hillside farms, which laid fallow for a couple of years and that was when he swore off the oil and gas industry. To his dismay, his four sons and son-in-law all went into the oil and gas business starting during the 1890s boom.
Eddy is the fourth generation in oil and gas and grew up on stories that his grandfather told his father and uncles of the oil booms in the 1890s. The family that didn’t stay in Ohio and the Appalachian region followed the industry west to California, and Texas by way of Illinois and Kansas.
“There was family on mother’s side in the industry that were well shooters and glycerin hands. Before we had fracking we used nitroglycerine to access oil and gas. The safety concerns people have today pale in comparison to what was previously done with nitroglycerine.”
Eddy grew up working on nearby leases when he was 12 years old. Growing up around the business he thought that he wanted to get away from it in high school. This was in the 1960s and the industry was just coming out of a dry spell, which was tough. He recalled one of his first “economics lessons” of how his grandpa carried around a check from his best barrel of oil in 1928 and his worst in 1968, 40 years later and the checks were almost the same.
“I was going to run off and become a chemist and a lawyer, but ended up becoming a geologist with plans to go into mining. I went to Harvard and got my degree in economic geology in 1979. I thought I was going to do hard rock metal mining. I then took a year off and came back to work in the coal mines to get some experience underground, which happened to be the year of the big strike with United Mine Workers. So I went back to work in the patch for a year, that really started to re-set the hook.”
The 1979 oil boom caused prices to spike and Eddy started working on some well sites setting rigs as a well site geologist. He worked as an independent consultant until he was able to build up enough business to start a consulting firm. In the height of the boom they were setting rigs all over the Appalachian basin. Throughout his consulting work, Eddy and a partner had started drilling some of their own wells in the 1980s. When rigs were being laid down they morphed into the financial side and started doing asset evolutions, bankruptcies, and foreclosures.
Eddy continued to do evaluation work from 1984 through 1998. He worked as the operations manager for Halwell Company, whose focus was on acquiring distressed properties in Ohio, West Virginia, and Pennsylvania for over a decade. This expanded into 11 states with 1,200 operated wells and more than 300 non-operated interest wells. The downturn came in the late 1990s and in 1998, Eddy acquired the company whose remaining assets were 900 wells in southeastern Ohio.
Stonebridge Operating Company was formed from the wells Eddy had acquired from Halwell in 1998. The company started during a bust, which was a difficult way to start off. To tighten cost they sold the office they had, with plans of being a district production office. They functioned as a small producer, operating wells and fixing them up.
Shale operating affected Stonebridge Operating Company as they originally estimated shale drilling was going to double cost and halve revenues. It turned out it more than doubled the cost of drilling and cut revenues by more than half on the traditional vertical wells. Eddy created a strategy to expand the company into new arenas.
Stonebridge devised and implemented on a four-prong approach to its operations. With close to 1,000 wells, traditional vertical drilling was still important. Cutting cost while still trying to figure out how to make the drilling work remains a focus today. The second prong was modifying its existing injection wells in order to take additional water from the shale plays to generate some additional income. Eddy described the remaining prongs and the shift to shale work.
“We don’t own a lot of deep rights but we had some leases we were able to clean up. We were able to put together a couple packages and worked with horizontal drillers, where they did have the deep rights. This included working with PDC on the first shale well drilled in Washington County, through a Stonebridge lease. The last piece we needed was offering service work.”
Stonebridge Oilfield Services was formed and provides services to Utica wells and vertical wells throughout the Appalachian Basin.
In 2011 Stonebridge Oilfield Services started offering services to the Utica drillers in Carrollton. They have worked on more than a third of the Utica wells in Ohio. The company provides roustabout oilfield services and continues to provide new services including containment, pipeline construction, land clearing, excavation, and injection wells.
“We’re not too good to do anything, were not afraid to get dirty or work hard. When a company needs a couple of extra hands on a rig move, or to hook up some pipe, they give us a call. It has given us the chance to develop some confidence, experience, and knowledge in the horizontal shale play.”
Stonebridge Oilfield Services is learning as they go and have expanded the services they offer as they’re gaining more confidence with horizontal drilling. With the current downturn, Utica drillers are looking for more bundled services which Stonebridge has been able to accommodate.
The service business has been good and done well, exceeding the production side this year. Production revenue has dropped during the downturn and Stonebridge Oilfield Services is always looking for ways to adapt and cut cost. In terms of the overall Stonebridge umbrella, they are becoming more service focused than production.
Stonebridge has more than 80 employees and is based in Marietta. They have a Uhrichsville Yard where they service most of the Utica drilling support (previously in Carrollton). They also have yards and permitting facilities in Barnesville and Fleming.
Shale-development’s impact on business:
Independently Stonebridge Oilfield Services didn’t have the specialized knowledge to drill horizontal shale wells, even though they had drilled a lot of vertical shale wells. Also with the group’s decline in drilling and shift to well services, they didn’t want to shift its capital to drill horizontal shale wells. Stonebridge Oilfield Services has taken its traditional oilfield knowledge to do roustabout contractor work in the Utica.
“2010 was kind of a pivotal moment for us, to watch the shale plays jump the river and come to Ohio. The family had seen dozens of booms and busts, but I said we were fixing to have our first “boom-bust” and that’s a different thing than we’ve ever been thorough before. You could just see that this thing was going to roll over the river and come south in Ohio,” Biehl said.
Getting involved in the service business has allowed Stonebridge to participate in some new business ventures. “We looked at the play and frankly I was tired of standing at the gate peaking in. I wanted to be a part of what was going on.”
As Stonebridge has gained more confidence and picked up lessons along the way, they have been able to add the services that shale drillers are looking for. The current focus is on growing injection well, pipeline construction, containment and production services. The company has also diversified and is installing poly pipe for an asphalt company and containment for a county jail.
“The industry has been built on change, and booms and busts. Change can be exhilarating and hard, and the Utica has been both for us, but you have to adapt to it. We’re dealing with higher line pressures, lower prices, which makes it harder to sell gas. But there are also many opportunities to do new things and it has been great for Eastern Ohio. The industry has been resilient enough to get under that cost curve and make it work.”
Eddy has been a member of the Ohio Oil and Gas Association (OOGA) since the early 1980s, seeing through the numerous issues that the industry faced throughout this decade. Eddy has taken on a participatory role with the Association throughout the years.
“The OOGA has been a vital voice for Ohio producers and helps to prevent overregulation. We have seen it before and we’re seeing now that the regulatory climate lags the booms, and a lot of time is spent with new proposed regulations. Often times this is like fixing the barn door after the horse is already out.”
Being in the industry for more than three decades, Eddy has seen how far it has come. From safety to environmental advances the industry has made great strides.
“The number one important thing the OOGA does is to be the industry voice and work to help balance the regulation. The group has remained a voice for vertical well producers, which is the industry’s “bread and butter.” We need to be proud that Ohio is doing many things better than other states and that all voices continue to be represented among the oil and gas industry.”
Eddy is also active on the national level where he is the small service company representative on the National Safeland Advisory Board.