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Bruce Levengood, OOGA Member Spotlight

Posted By Lyndsey Kleven, Thursday, January 07, 2016

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 lyndsey@ooga.org

Background information:

Bruce Levengood got his start in the oilfield merely out of the need for a job. Bruce grew up in Mineral City and after finishing high school went to Columbus to study electrical engineering at Ohio Tech; the program was part of the Bell and Howell Education Group in Columbus (currently DeVry University). Bruce liked it, but found it wasn’t hands-on enough, so shortly after he ended up back home working in a grocery store.

A local man that worked a nearby oilfield job would shop for his groceries every Friday night. Bruce would ask him if the company was hiring yet, and the man would tell Bruce to show up at the worksite at 6:00 am with his lunch to see if they would hire him. Bruce did this about three times unsuccessfully.

“Finally one Friday night, he came in, same old routine. He said, ‘you know that job you’ve been wanting in the oilfield? If you take your lunch at 6:00 am I guarantee they will hire you. Today was my last day, I quit.’ The next day I showed up with my lunch and I was hired.”

Bruce started out as a roustabout. When the rig hand was out sick he was put working on the service rig. The service rig operator wouldn’t let Bruce leave the service rig when the original one was able to come back to work. It wasn’t long until Bruce was running the service rig and pumping wells. Bruce would go to pump one lunger wells that hadn’t worked for a while because the engine wasn’t running. He would tell the boss to get him the parts and that he could fix the engine. Much to his boss’s surprise, 19 year-old Bruce was able to fix the well engine.

“He was surprised I was able to fix this stuff. I grew up on farm and when something breaks you fix it. When Grandpa needs a hammer, you get him a bigger hammer. You just learn how to do that stuff, I was kind of mechanically oriented.”

The oil industry was percolating around 1977 with a lot of wells being drilled in eastern Ohio. Bruce’s brother John and our cousin Rick were also working in the industry at the time, painting tanks for oil and gas companies. Many of the companies were asking John if he knew where they could get a service rig. Bruce knew how to run a service rig and John had companies willing to provide them with a lot of work. 

Bruce’s parents were union carpenters, facing the recession in the 1970s they were in and out of work. They mortgaged the farm and started Levengood Well Service, a partnership of all nine members of the family. After pulling together the financing, the family went to Cambridge and bought a rig from Dale Young who was building rigs from recycled parts from the 1950s.

The business grew to two service rigs, a swab rig, three cable tool drilling rigs with trucks and dozers. “The demand for turnkey drilling services was so great that we leveraged the knowledge learned working for others in to drilling wells for limited partnerships. 

“We knew how to drill wells, we learned how to take leases, and so we got into the turnkey drilling business. We would drill a well for that customer, on that site, and operate it for them. So that got us into the operating business. We basically learned what needed know about drilling a well from being contractors. We kind of learned the business from the ground down. The service, how to put a well together, and make it work.”

Company Information:

In 1981 the Levengoods formed Atwood Resources, Inc., which became their turnkey drilling company. In 1988 Atwood bought Park Ohio Industries’ wells; at the time prices were thought to be at the bottom which turned out not to be the case. In 1992 Atwood sold controlling interest to Transfuel and the brothers amicably parted ways. Bruce took 100 of the old wells and started Sound Energy Company in 1992. The company started as a sole proprietor and was incorporated in 1994.

“I needed a name just like that, quickly, so I thought, what sounds good, and that sounded good—Sound Energy. One day I was in my suit and tie signing papers and the next day I was in my pick up truck pumping wells, happy as a clam—that’s me, I like being hands on.” 

Today Bruce is the President of Sound Energy Company, Inc. and runs the company with his wife Annette; his two sons Nate and Tyler also work for the company. Bruce’s entire family, including his daughter Amber, are all on the company board of directors. They still do business with Bruce’s other brothers and will occasionally drill wells together.  

Sound Energy is based in Ohio and focuses mostly on conventional wells, operating in 18 counties, with most of the focus being in Eastern Ohio. The company has seven employees, and use contractors when needed for services not provided by the company. 

“I live near Dover and I wanted to be able to get to our wells within a few hours.  If the phone rings, I am the guy to get it taken care of. Now we have wells from Cleveland all the way down to Cambridge.”

Sound Energy has drilled some wells over the years, becoming more oil oriented in the recent years when the price of oil started going up in the mid 2000s. Most of what they have came from acquisitions, starting with 100 wells in 1992 and operating 470 wells today.

The Shale play in Ohio has impacted Sound Energy with some of its wells overlaying the area. Sound Energy took advantage of the 1031 exchange, which created a tax-free exchange when selling assets. For this reason many operators had a willingness to sell properties about the same time Bruce was interested in selling some of Sound Energy’s Shale assets. Through this exchange Sound Energy launched into an acquisition mode and increased its well count by 200. It was able to convert non-performing assets in the Utica Shale, into performing assets.

Shale-development’s impact on business:

Shale development has been both good and bad for Sound Energy. It has been good in the positioning of its assets and operations that happened to over lay where the shale is located. The acreage they did own the deep rights on was in play and of interest to buyers.

“We were able to get some Shale sales to offset some of the pain we are facing with low margins on conventional wells. We were blessed to have the acreage in a really desirable place that worked out for us.”

Another positive are the technological advances that have come with this new play. Bruce says, the horizontal drilling will probably keep them in business longer through their conventional reservoirs. Sound Energy is staying very alert to how this is advancing as they acquired more Clinton wells while selling some Shale assets. 

“We have operators now drilling horizontal wells in our conventional reservoirs like the Clinton, Berea, and the shallower Shales. If prices ever come back to a reasonable place, this could give us the next playing ground to develop a new play.”

The negative side is the fact that it has created more regulatory oversight causing drillers to have to deal with new regulations coming from the state.

“Regulatory changes are the things that cause us to spend more time and money on things we don’t necessarily see a lot of reasoning for it, or could be overkill in some respects. It all comes from something happening in the industry and the reaction is more rules and more laws and stricter enforcement.” 

In addition, the advances in technology and drilling efficiencies have made the industry too good at producing.

“Ultimately it has impacted the price, the shale not just in Ohio, but all over the place has created this over supply that we’re all facing now. We’ve seen it before, although it seems like it’s the worst ever right now, but that’s what I thought the last time. The 90s were really bad, hopefully this won’t be too bad for too long.” 

History with the OOGA: 

Bruce joined the Ohio Oil and Gas Association (OOGA) in the early 1980s shortly after starting Atwood Resources. The early 1980s was a boom time for the industry and the Association had gone through a growth period at the time and had more than 3,000 members. Bruce originally joined the Association as a way to network and get to know other people in the industry.

Bruce recalled the Association’s leadership at the time and how the organization was able to evolve from this.

“Jerry Jordan was a good ambassador and was the one who took note of different regions across the state. Some areas felt missrepresented and the OOGA broke the state into the four regions. The bylaws were rewritten to have a producer representative from every region. If a company already had a member as a Trustee, no employee of the company could be the regional representative, the idea was to bring in new blood. Jerry was the spearhead to get that up and running." 

Bruce had also joined the North East Ohio Oil and Gas Association, which was formed because the upper region of the state felt underrepresented. When the Trustees created the regional groups among OOGA this interested Bruce and he started to get more involved, becoming the regional representative for his area.

“Finally they ran me for a producer category and I was elected to be a Trustee. Once you’re sitting on the Board and on the inside, you hear all of the issues talked about. The outer regions didn’t necessarily know a lot of what was going on. That communication was very well received and much needed. It did a lot to pull the whole state together and for this Association.” 

In 1980s Bruce was involved with the Association’s natural gas committee (there was also an oil committee). At some point along the way these committees were combined to form the producers committee. The moving parts of pricing open access and changes made in marketing of gas were issues the committee tried to stay on top of. 

When Bruce was starting Sound Energy he let his time as a Trustee expire to focus on managing his company. He remained involved with committees from 1994 through the 2000s when he would be elected on the Board of Trustees again as well as the Executive Committee, positions he still presently holds. 

“If anyone is going to be active in exploration or any ancillary aspect of working in the oil and gas fields in this state, they should become a member of this organization. There is so much that we do in both the political arena as well as the technological arenas. The knowledge that you can gain here is tremendous. Not only that, but supporting the organization helps to support your own livelihood. You will be with like-minded people to share your issues and try to solve those issues. It’s the old saying from Franklin, ‘if we don’t hang together we’ll surely hang separately.’”

Bruce also highlighted the importance of having an industry voice in the statehouse. He also cited OOGA’s good working relationship with IPAA to deal with issues at the federal level.

In regards to some of the issues the Association is currently facing Bruce pointed to everything the industry has done for Ohio and its residents.

“The savings that the people make on what they spend for gasoline and natural gas to heat their homes is far more than what they could ever get from a tax cut. When you get an industry that has basically done such a good job that we hurt our own economics the beneficiaries are the citizens of our state. Most people don’t understand the fact that the better break for citizens is someone who creates such a good product and so much of it that it causes the prices to come down, which has been a result of our industry. We’ve saved billions of dollars as a state for our citizens. That point is just not amplified enough.”  

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