Propane Well Stimulation and Building a Downturn-Proof Oilfield Service Company with Tadd Wallace

Tadd E Wallace00:00

Yeah.

Peter Brecht00:02

All right, welcome to the Local Energy Podcast. My name is Peter Brecht. I'm here with my co-host Wade Spear. And today we are joined by Tad Wallace from C3 Oilfield Services. Tad, thanks for coming on. How are you doing today?

Tadd E Wallace00:16

Live in the dream, live in the dream, yeah, absolutely.

Peter Brecht00:18

Yeah? Absolutely.

Where are you located right now? Where are at?

Tadd E Wallace00:22

Right here in the post oak Houston. So that's where the office and the headquarters of the company is at these days.

Peter Brecht00:25

Okay, alright.

Awesome, okay. I'm just checking out your website. You guys are kind of like all over, well, pretty much we're all oil and gases, it seems like, but I was looking forward to chatting today. You're a bit of serial entrepreneur. It sounds like you've built some companies or maybe this is a, but I want to dig into that, but first, maybe give us a high level of what C3 does. Tell us about yourself. What got you into oil and gas?

Wade00:30

Alright.

Tadd E Wallace00:56

Yeah, yeah, so real easy man. I'm from near Wichita Falls, old small town, Berkeley, Texas. Most everybody, my brothers, all of us ended up in oil field. If you didn't go in the military, or even if you did go in the military and you came out, you ended up usually in the oil field. Both family members in it, I got started back San Joe, if y'all remember old San Joe, fracking and whatnot. They were fracking whole tubing, came in with them, then came into gas frack, which if you all remember was,

Peter Brecht01:11

Yeah.

Tadd E Wallace01:26

GasFrac was the only company that fract oil wells with liquid propane. So I came up, spent a good few years there, paid a good attention to what was going on post some of those wells. And then from there, I left GasFrac to go to a company called SIN Oil out of Canada, which the guy I worked for was actually the inventor and the patent holder for all the GasFrac. And so I spent five years with him.

Wade01:30

Right.

Tadd E Wallace01:52

Getting what I consider my PhD in engineering and chemistry because I didn't go to school. And yeah, from there I came up with an idea with him that I took from Gasfrack and that idea was how can we take propanes and butanes and reinject into the formation to the wells and do well bore stimulations and remediation all through using non-damaging fluids.

Peter Brecht01:59

Yeah.

Hmm.

Tadd E Wallace02:18

And

since then, it's seven years later, we're building more equipment, hiring like I would have never dreamed of before. So while the market is down right now, our utilization is at the 100 % mark. I can't get enough equipment out to meet the demand we've picking up. The whole company was built for a downturn market.

Peter Brecht02:34

Wow.

Wade02:36

That's a good problem to have.

Tadd E Wallace02:41

Coming from Wichita Falls area, if you remember the bust in the 80s, right? Everybody's mom and dad had jobs and overnight we were all poor and one third of the houses were empty, you know? And so I always kind of thought, and a lot of the company was built during COVID, right? So depreciated markets. So my whole idea about building a company was I don't need to build a company that makes money at high oil. I don't want my whole life to survive on that. I actually want to build a company that I actually am the guy everybody calls when prices are low.

Peter Brecht02:49

You

Wade02:50

Yeah.

Peter Brecht03:08

Yeah.

Tadd E Wallace03:08

How can

We spend a very small amount of money to get a big return if we can't keep production flat, if we're losing the dollar value, can we at least keep production flat versus losing the dollar value and having your decline? So that was really the whole idea about, let's, do we build a oil-filled service company that is actually built for the downturn? And I'm starting to think that I may have been one of the few that actually had a technology built for suppressed markets.

Peter Brecht03:22

Yeah.

Wade03:34

Right. That's interesting.

Peter Brecht03:36

That's

A good thing to bring up. Was listening to another podcast, another oil field guy that, there's a lot of us running these podcasts apparently, but Tejano Brown of Underdog Wireline was on one of them and he was talking about their company out there in Midland and kind of the same thing. They need more wireline trucks. And the reason is, they're really, their model is built around, kind of a depressed environment, right? So they're still busier than ever.

Tadd E Wallace03:45

Yeah.

Peter Brecht04:04

Just because of the way that their service model set up. So I think it's an awesome way to kind of get it structured. Where are you guys like mostly? I'm looking, you guys are in Oklahoma, Texas, Louisiana, kind all over the place, but like where's the lion's share of it? Yeah.

Tadd E Wallace04:16

Well, right now because we have wheels on trucks,

The guys are nonstop. We've had units that have rolled from three or four weeks straight in South Texas working old Vicksburg welds, almost welds. Then we're headed up to, we'll be up in Amarillo three days later. We'll be coming back down to, we're rolling everywhere. Got our first quarter this year, we're...

Peter Brecht04:25

Yeah.

Okay. Yeah.

Tadd E Wallace04:41

Operating in the DJ basin, the Eagleford, down south of Bixburg, New Mexico, moving into New Mexico with a lot of that CBM. What we're finding out is if you want to get water off a CBM, propane and a really good surfactant is a really good way to do it and not add more water to CBM if you guys know much around working around coal bed methane. So yeah, it's really been an interesting take for us. Our plan by the end of the year is have equipment.

Peter Brecht04:48

Yeah.

Okay.

Yeah.

Tadd E Wallace05:10

Sitting in five different states and full-time going all over, not just where we're at right now running our guys to the death. We're rebuilding equipment as we speak right now. Was on a call earlier this morning making sure paint schemes were correct.

Peter Brecht05:18

Yeah.

Wade05:26

So

Peter Brecht05:26

Gotcha.

Wade05:27

When you talk about having a unit, what does a unit entail here? I imagine it's got pumps and just all these different things. What's that look like?

Tadd E Wallace05:34

Yeah,

So one of the cool things that we've done is we've made these processes of pumping live gases, Gas to, what do they call it? Liquid to gas fluids. Down to a very small footprint, man. Took a, kind of you could take an old CNA unit, a seaming and acidizing unit, and we converted over the pumps and the packing, so we have the ability to add diversion and acid, and we do other things mixing with the propane.

Wade05:49

Right.

Tadd E Wallace06:04

So yeah, full unit for us right now is a CNA, almost like a CNA unit with its own, we drag our own flare everywhere we go with this, because we are pumping propanes and butanes for safety and whatnot. So yeah, just think of a big CNA unit that's been fully turned around and converted to be able to fluids like this. So we're now getting into where we pump acid with propane and surfactants and diversions and...

Wade06:08

Okay.

Right.

Peter Brecht06:17

Mm-hmm.

Wade06:19

Okay.

Tadd E Wallace06:32

Every month it seems like the technology has driven us and our patent portfolio keeps to expanding with things that we're doing that I guess no one has or people have thought about doing for a very long time but being able to operationally execute some of this stuff is a challenge if you're starting without that heads up that we got we learned to gas frat. Pumping a fluid that will convert to gas on a pump if you guys can imagine can be

Wade06:43

Right.

Dude.

Right.

Yeah, no kid. So whenever you're when you're pumping, are you like pumping down tubing? Do you guys have to run in with tubing or, how just depends.

Tadd E Wallace06:58

You can lock a button.

Sometimes we run a

Backside tubing depending on the tubing hangers down hole. What do you have? Every well is different, right? Our company, one thing that we do like a new customer will take all the data from your well, will take your drill data, your completions data. We'll start figuring out what your actual matrix looks down hole. We'll start looking at some of the issues good to have. One of the technologies that we're seeing really good

Peter Brecht07:28

Hmm.

Tadd E Wallace07:33

Resulting is gas condensate wells wells that have been loaded up with gas condensate the gas production is dead because the liquids down liquid loaded Propane is a great fluid that is easily missable with all that condensate that then unloads that fluid and you'll see gas rates take off so Yeah, we're just across the board right I would say we're one of the last true service technical companies that are willing to do different things and Yeah, we're getting pretty good at it

Peter Brecht07:41

Mm-hmm.

Wade07:49

I got you.

Horizontals and verticals are one more than the other.

Peter Brecht08:01

So in.

Tadd E Wallace08:02

Yes sir.

Not really. Some of the stuff we're seeing at the DJ Basin, we're kind of breaking out up in the DJ right now, and that's all horizontal. We're able to mimic that same data, right, because the characteristics of the DJ and the gas condensate window of the Eagleford, kind of pair up, right? So we're scaling there too, in the horizontal side. So yeah, we're horizontal, vertical wells, everything's on the table.

Wade08:11

Okay.

Interesting. So when you're pumping down, I imagine the propane and the propane is is one essentially like a frack, right? Like kind of like a refract. Is it also it's also delivering surfactant, chemical, all that stuff to deal with either skin damage or swell shale swelling.

Tadd E Wallace08:47

Yeah,

I mean it could be numerous different mechanisms even paraffin right propane is an excellent cutter on paraffin So if you have a highly oil well, that's highly paraffined up, we can actually go in there and use propane or butane or other Hydrocarbon solvents to like so if the oil well doesn't have a gas sales line

Peter Brecht08:57

Hmm.

Tadd E Wallace09:05

We don't just have to use propane and butane. We can go get condensate and mix in some paraffin inhibitors and what not and unlock them paraffin issues. We see that a lot in the waxy window of the Haynesville and the Cotton Valley area. We'll see that. North Texas, we do a lot of paraffin work where they've essentially pulled their hot oilers off the market. Especially in the cold season right now, you come have us pump a job, you probably don't have to treat it again for six to eight months is what we're seeing overall. Where hot oiler may be a thing, you're needing to do it.

Wade09:15

Okay.

Peter Brecht09:17

Yeah.

Tadd E Wallace09:33

Once a month in the cold season, once every other week, you know. Yeah, so by being able to use hydrocarbons, fluids that they can buy, then inject and then produce as they produce the well, they actually can sell that fluid that was just their fluid. Now the other side of that benefit is, it not just cleans up your well bore, right? You send them kind of fluids and them solvents through your production facilities. So now you also start sending good solvents all the way through your flow lines to your production facility and see a good clean out there using these type of systems.

Wade09:36

I got it.

Peter Brecht09:37

Wow.

Wade10:03

Hmm, hadn't thought about that, man. It's a good ancillary benefit right there.

Tadd E Wallace10:04

Interesting, yeah.

It's one, yeah, so it's one that our customers, it's one of the value add things. I think we've lost a value add, value prop in our business. Everything is essentially commoditized, wire lines commoditized, fracks commoditized, everything's kind of commoditized. And with us, I want you to use me and not have to call me back.

You go tell your buddy, hey man, we did treat this well over here, the well came back on us and it's been 12, 13 months and the well's still flowing good. We brought it up above that decline curve. And that's what we're seeing on average right now, especially in the gas condensate window of wells and the more of the dry clays where you had a dry clay and they fracked with water, never see water come back up. You get that water off that reservoir, de-swirl them clays and change wettability and you can make a well.

Peter Brecht10:38

Hmm.

Okay.

Wade10:57

I was at a company that did a gas frack in early teens, guess is what I'd say. And Lyn Energy.

Tadd E Wallace11:03

Oh yeah,

Yeah, I was on that job. Yeah, yeah, yeah, in Colorado, right out of Greeley. Yep, I was.

Wade11:07

Okay. All right. Well, no, this

Was this one was actually a green wash out in western Oklahoma. So they made that was okay. But, one of the big sales points was I think a lot of time when you're pumping that propane and butane and everything that you're able to flow it back and go to sales. I what kind of percentage of what you pump? Are they able to kind of recapture? How much do you normally flare away? Or is that even a part of this kind of a process now?

Tadd E Wallace11:13

Okay, okay, I know the man watching too. Yeah

So

100 % is what we're seeing recycled on come back to surface. So on every single job, our flare is actually for us as we're, you can imagine when you pumping propane, you first open up the propane valve from whatever your storage vessel is, you have a gas, right? And if you guys know, triplex and sync pumps, you get air lock in them, the pumps, you lose the hole. So we actually use the flares just so we can pry them up.

Wade11:41

Okay.

Right. Right.

Okay,

Tadd E Wallace12:04

And get primed and that.

Wade12:05

Get it going.

Tadd E Wallace12:06

Yeah, so when you actually flow the well back, zero goes to flare, 100 % goes to production. And you'll see the big incremental boost in the very beginning of the well where you see all this major amount of fluid and liquids come back. We see a lot of oil come back, especially on the gas condensate. You may have 30 to 100 barrels come back in the first 24 hours on a well. So yeah, we've had quite a few.

Wade12:15

Right.

Okay.

Tadd E Wallace12:33

Excuse me, successes, especially around the gas condensate.

Wade12:36

I was going say it'd be great to be able to sell your frac fluid instead of having to pay to dispose of it.

Tadd E Wallace12:41

It's a big thing and I will tell you like operators especially some of the majors that we're working with You know for a long time then what is that? Environmental Everybody was going down this EGR. I forgot what it is some environmental crap, right? My god, right? Everybody want to go ESG, right? Well, I always thought that was kind of like a dumb perspective I thought that we should always be thinking environmentally on that. I thought it was a dumb Let's go concentrate how we could be better. Well

Peter Brecht12:55

Yeah, the ESG stuff, yeah.

Tadd E Wallace13:09

Okay, why aren't we just being better as is? So where gas really was well was they figured that part out of how do we use these propanes and butanes, especially that were stranded at the time of low gas prices, right, where there was no value, value in them. And that's where we also see a lot of differential in value. If I put propane on an oil well and I had to use that propane to miscible into that type of oil, you swirl it, you get it moving.

Well, we may only get 50 % of the propane to come back in the gaseous phase, but you didn't lose that propane because if chart out your oil, you'll find your C chains, you'll have a spike in them, C3s and C4s. So you don't lose it, you actually just get that oil mobile again.

Wade13:49

I got you.

Peter Brecht13:53

Hmm.

Wade13:58

Interesting.

Tadd E Wallace13:59

So yeah, a couple different things we're working, Miss Abilities, it's big science project out there, right? For an engineer, I can see you kind of like, missed through it.

Wade14:07

Oh yeah, I

Would love to iterate through that and see, that's great. That's great.

Tadd E Wallace14:11

Yeah, so that's really

What the company was around

Peter Brecht14:14

I just hear like all these chemicals that you're mixing together. It's like, obviously that's the ingenuity of it, right? I mean, it's not like a danger thing necessarily. I mean, it is, it's a dangerous job that you're dealing with stuff that's it's flammable and all that. Like, who's coming up with these chemicals? Got it like, it's crazy to me that you can just figure out how this works. I still can't get my mind past that.

Tadd E Wallace14:39

So man, we're blessed man. Have Kevin Lang who's with us. He's a long time chemical guy, but really where the ideas come from is like any other idea. You're sitting around, how would we do it? I mean, we got a customer that we're working with in South Texas, the actual same gentleman that turned us on to y'all's podcast. And he come to us with this, we're doing these acid jobs, but every time we do them, we got to go in and we got to...

Peter Brecht14:45

Yeah.

Yeah.

Wade14:58

You

Tadd E Wallace15:04

That's not the price of the acid job. We gotta go unload, we gotta bring work over in to swab the well and all these other problems. Let's try this out. Let's put a little bit of acid in front of some propane. All right, let's put acid and propane in a diverter. Let's do it three or four times in a row. And hey, let's throw mud acid in the middle of it. And once again, we just come down as a tech company as...

Wade15:09

Run.

Peter Brecht15:15

Right. Okay.

Yeah.

Tadd E Wallace15:29

As a true tech company where we want to bring a service provider and bring new ideas and technologies to the front for our customers and so many times I'm sure Wade you guys sit in a room man it would be nice if we could do this but you don't have a service company to go do it. Yeah my company is built around hey if you have an idea we'll figure it out and we've gotten very good at I mean our safety we have we've been very blessed we've never even had a hurt finger on the station.

Wade15:42

Yeah.

Peter Brecht15:56

Yeah,

That's awesome. Yeah, you're checking all the boxes and cross the T's, dot, and I's, all that. It's just the chemistry side of it. And Wade's got a background in chemistry. I'm just, so every time he starts talking about stuff, I'm like, that was not a course that I did well in. Let me just put it that way.

Tadd E Wallace16:13

Yeah

Wade16:15

Didn't like it, let's say that much.

I'm not a huge chemistry fan, but sometimes you do what you gotta do.

Peter Brecht16:19

I hope

If you're grading on a curve, we're okay. Maybe I don't know. We'll see so I talked to Daniel Purvis so he's I think one of your business development guys and one question that I kind of had queued up for him is You know when you're growing a company and you're doing and we've talked to a couple other folks that are in business development But I'm always curious on the sales side like

Wade16:24

Nyeh.

Tadd E Wallace16:29

Yep.

Peter Brecht16:44

You word of mouth is great you guys have a great product people hear about you from you know neighbor and then okay we're gonna go do the same thing it's a small community or it's a close-knit community to oil and gas but I mean what are some things that you guys are doing to like grow are you having to you know are your sales guys out there like having to send out mailers and go on location and make phone calls or like what are you guys finding right

Tadd E Wallace17:02

No sir.

Look, I don't believe in running with a lot of debt on a company. I also believe that if you can provide a service and a product that people could either use or really help benefit in the middle, come to them, right? So our sales guys, their biggest issue is just managing the work coming in. When you build yourself around a low commodity,

Driven price tag and I mean our average jobs to go pump two three hundred barrels of propane on a well with all these Additives is underneath 30 grand Now mind you out of that 30 grand 30 percent of it is a fluid You're gonna buy and then get back at surface so in the first three days you've already cooped You know 30 45 percent of your total investment that helps move the needle very far as wait will tell you if you can go to his boss and say hey man we got 30 percent of our money back in three days

Even if it doesn't go boom, there's been some sort of a regain of capital. So right now, man, the biggest sales things we do is we just go do kick ass work, man. And we do what no one else does, right? Like people see our equipment. Get, as you guys probably know, y'all went on LinkedIn, I'm not the very good, the best guy at I'm what we're doing. We're doing some super kick ass things, but very few people know and I...

Peter Brecht18:02

Sure.

Okay, I love it.

Yeah, yeah.

Yeah. Yeah.

Tadd E Wallace18:25

I think the reason why we're growing is we got a pretty good product. We're continuously adding and evolving certain things like, when we started stumbling into acid and propane, well, I went and found some guys that have this really bad ass acid software overseas and they just couldn't get it to be adopted in the US. Well, hey man, give it to me and I'm gonna, and so just the little things. Think building a company and growing a company.

If you just really focus on delivering a badass product for a more than fair price, people give you a chance. Now it took us seven years to get here, I will tell you. We built our first equipment was a old Kenworth and a 40 horse triplex, maxed out at 2,000 pounds of pressure. And honestly, some of the very first wheels I treated, I just pulled a propane truck up straight up next to the wheel head, put a crossover fitting in there and a valve and fucking opened the tank and let it rip.

Wade19:06

You

Peter Brecht19:07

Right.

Love it.

Tadd E Wallace19:22

And if the company was built on that kind of working within our means and capital budget, I'd bootstrap the company from the bottom until recently where we able to grow and have data to actually take scale investors that can help us scale. And since having that investment group come in, we've been able to hit the hockey stick with the right stuff.

Peter Brecht19:38

Mm-hmm.

Yeah, it's a,

Wade19:43

Right.

Peter Brecht19:45

What kind of, so, and you just mentioned something that like I've kind of been looking at too. Is, is like the amount of data, right? You know, we have like the company that I work with, we've got 40 years of data, right? That we can look at overgrowth, but it's interesting to see like those inflection points where it's like, Hey, we started doing this. And then things started to take off. Like what kind of data would you

Tadd E Wallace19:52

Right.

Peter Brecht20:06

Point at like within your industry to say like, okay, that's where the hockey stick started to go up. I'm not asking you to give us any industry secrets here, but like what are some of those things that you've hit that you're like, that was something we started doing that was like, like we saw started to see some growth or was it just time in the saddle?

Tadd E Wallace20:12

Yay!

That's an interesting question. Would tell you that time in this business, you should always be thinking about just to make it, right? Too many people are trying to get in the oil business and go for broke quick. No, no, no. I would suggest oil is about the long haul. Go read the book The Frackers. I suggest every person that's listening to this, go read that book and you start to see what the long haul is. Harold Hamm didn't become Harold Hamm because it was easy the first day, right?

George Mitchell didn't figure out the Bakken because he did in the first week. Both of them were out of cash by the time they figured. I will tell you about this company has probably failed about four times we were on that verge of complete game over, cash over, then all of sudden some well that we just did a couple weeks before comes in and is like, hey, this thing's at a million and a half a day. You guys did something.

Peter Brecht21:16

Yeah.

Tadd E Wallace21:16

And

We're back at it. So we've probably, we've been, yeah, we've been knocked on our ass more times than we've won, but now we're winning enough to cover all those ass whoopings. That's for this thing.

Peter Brecht21:27

That's good. Yeah.

And as founder, the guy, I don't know if you call yourself founder, some people do, you you started the company, right? Yeah. But I mean, there's got to be days. I mean, I've been in a seat before where, you're looking around, you've got employees and people that depend on you. And it's like,

Tadd E Wallace21:34

Yeah, I don't like the sounders of Wacoore entitled to me.

Right.

Peter Brecht21:47

You open your eyes at five o'clock in the morning and you're like, man, if I don't get my boots on the ground and get after it, so, how do you personally, I'm just so intrigued by the story and the growth, is there something, there's probably days that you're trying to just like keep things going, right? And you put on the right, attitude and go after it. But like, are there certain things that you do personally to, just ensure that you're able to like perform at the, at your max and just kind of get after that.

Tadd E Wallace22:14

I want to answer that question. It's funny you say it. So I've listened to your podcast, right? Getting prepared, right? And I know you've always asked everybody, what is your energy drink?

Peter Brecht22:16

That's a long question, you are you going to the gym? Are you doing white monsters? What's your secret?

Yeah.

Tadd E Wallace22:30

So I will tell you, if you work at my company, you get fired for having an energy drink on location. So it's not energy drinks. Yeah, we don't do that here. I've had too many guys fall out at a hundred degrees outside with white clothes. Like I love my gang. No, man, I did. Think at the end of the day, man, you got to love what you do. I think also being in, using your talents for the right things. Like I'm not talented at a lot of things. I'm not a guy that's going to go,

Peter Brecht22:30

Yeah.

Alright.

I respect it, I respect it. Good for you.

Yeah.

Tadd E Wallace22:59

Post shit, and that's not me, but what I am good at is, hey, how do we take an idea and operationalize it, right? Man, how did we really get over it? I I'll tell you, there's days I woke up yesterday like, man, if somebody offered the right amount of money, man. Right? And then, I can't walk away from my child that I birthed, she's now making her into who's getting ready to hit that sweetheart dance, and I know I gotta let her get married one day, but just not yet, you know?

Peter Brecht23:01

Yeah.

Yeah. Okay.

Wade23:14

No.

Peter Brecht23:16

Yeah, yeah, yeah.

Yep.

Right?

Tadd E Wallace23:29

But

Peter Brecht23:29

Love that.

Tadd E Wallace23:30

Gym, food, all that kind of stuff. But I think the big one, is just being really committed. I see a lot of people start up companies and they don't understand. I've given so many buddies advice and mind you, I don't have a business degree. I didn't go to university. I don't have an engineering degree. I see so many buddies that I'll try to give them some advice like, man, don't go that route. Don't take that debt. Do you really need the newest shit? My company, will tell you.

Peter Brecht23:36

Mm-hmm.

Yeah.

Tadd E Wallace23:56

There's not a new, brand new piece of anything outside of iron and tools that's new. This industry provides so many starting bases that you don't have to go sell your soul to start. But yet everybody wants to, I would say many times people want to come out and say, at me. Our goal here at C3 was to roll quietly under the ground enough to where people like certain majors call us now. What's interesting for us is now I'm having...

Peter Brecht24:01

Mm-hmm.

Yeah.

Tadd E Wallace24:23

The customers that I would have dreamed of even if I was selling someone else's product as a customer. We're not hunting them, they call us. And I think that that's a testament of what we're But I mean, yeah, I think if you're gonna get out here in the oil business and actually try to build something, the other thing I would tell a lot of people is it's easy to build something when there's already a blueprint.

Peter Brecht24:31

Yeah.

That's awesome.

Tadd E Wallace24:51

If I needed to go build a wireline company, no, not to the wireline guys out there. I have a blueprint I can follow. Somebody's done it. What made C3 so incredibly, I think, hard, and I think a lot of entrepreneurs will say this, if I knew what I knew now, I probably wouldn't have done it. It's probably pretty fair. When you take a whole idea from a patent, the idea came off of a back of a truck one day, right?

Peter Brecht24:59

Yeah.

Hmm.

Tadd E Wallace25:19

You surround yourself with the right people to go get a patent. And then you can't go work at an oil company because if you all know you have intellectual property, that oil company is a of that property. So then I had to take that $1,200 a month I made from the government and live on that for six years.

Wade25:27

That's right.

Peter Brecht25:30

Yeah.

You

Tadd E Wallace25:36

So when you take that patent and then you finally get it done and now you start operation, how can I do this? Right? Well, no one wants to invest in you. So you got to go scrap together, a old 18-wheeler and a 40-horse pump and pay some guys to put it together and go try. And so we were legitimate from the bottom. We built up from the bottom up operationally mentality. Unlike a lot of companies, though I have great businessmen on the board and people that help us with our business, we're not a business.

Peter Brecht25:50

Yeah.

Tadd E Wallace26:07

We're not not sucking every penny that we can candy that we can right now. We're really operations One of the few companies that like I'm in the field more than I'm in my office

Peter Brecht26:09

Yeah. Yeah. That's cool.

That's a sweet spot. I've heard too, in talking to other companies that, as you grow and I don't know if this is a thing, but cause I've never been in your shoes before, but you get to a point where you can like almost get too big and then it becomes where it's like no fun doing the thing you were doing. I mean, do you think you'll ever find that point or is it kind of like, we're just going to like when we find it, we'll know, but right. Like we're still having fun, right? Cause

Tadd E Wallace26:38

Yeah

We're having more fun. I speak as I speak, we're having more fucking fun than I could have imagined, right? Do, well tell you there's days when you sit down and think about it. Man, there's days you think about it, but I think the point, I don't want to work at a company where I have to worry about my, what I say to my folks. I also don't want to work at a company where my people can't feel freely to speak to me.

Peter Brecht26:49

Ha ha ha!

Yeah. Yeah. Yeah. Yeah.

Yeah.

Sure.

Tadd E Wallace27:12

And once you get too big, and look, it's going to happen. I'm sure C3, if it continues where it's at, we're already getting into the customers asking us to come frack, right? We're starting to do those other services because of output of what we do. And so I know we'll be there. And when that day is there, I won't be here. I can assure you that. Maybe five more years. We'll see. Yeah.

Wade27:24

Right.

Peter Brecht27:24

Mm-hmm.

Right? Yeah. Yeah.

Yeah, I gotcha.

What's something in the oil and gas industry that maybe you're thinking about but we're not talking about? Is there anything that, I don't know, maybe doesn't keep you up at night, but maybe something that we should be more attentive to?

Tadd E Wallace27:53

I've heard, once again, I've heard a couple answers that you guys have gotten to that question. I'm kind of dumb, but I try to study some, you know? I'm trying to cheat here a little bit.

Peter Brecht27:58

Yeah. Well, thank you for listening. That's a...

Wade28:00

You

Peter Brecht28:05

Yeah, yeah, it's alright.

Tadd E Wallace28:09

And what I would tell you, the thing that I see, and if I could tell anybody listening to this, and you're in our generation, you're our age, you you guys have probably done the same. You made a lot of rich men rich in your life. I think the, I did that very much in my life, and I think that this business, there's a huge opportunity for self-employment. With everything that we're seeing on in the country, from health insurance, to all these different things, oil and gas is a place where you can actually go make it if you just get out of bed and work your ass off.

Right? And I see a lot of people, I'm working, but they're not actually using their mind to open up. What are all the possibilities? I just took a crazy idea pumping propane in the ground and guys, we're building a business out of it. I go out every time I go out to location, I see, what if we just made that one thing a little bit better? And if it was me and oil and gas, what I think we're not paying enough attention to is we've let everybody think that these big companies have got it figured out and that we're at the end of our technical whereabouts.

Peter Brecht28:51

Right?

Wade28:51

On.

Tadd E Wallace29:08

I would tell you guys, in the shell game, believe we're still in the first inning. Think she'll is everyone thinks we're, she'll starting to get puttered out. I think when you leave 95 % of the reserve in the damn ground, you're not in the first inning.

Peter Brecht29:20

Mm-hmm.

Wade29:22

Yeah,

Peter Brecht29:22

Right.

Wade29:22

The efficiency is horrible. That's going to be the revolution is whenever we figure out how to even increase that to 20 % or 25%. I mean, it's just huge.

Tadd E Wallace29:24

That's right.

Else

And that's what C3 does, my man. That's what we're working on, right? How do you go back in on these wells, open them up? How do you use fluids like a propane to be miscible, move heavy oil? Hey, you got condensate banking out here, how do you get it out of the way? These are things that we just left on the, I'll tell you, one thing that me and Reid Goodman get along with well is there's a lot of opportunity for young guys out there with a little bit of savings in their pocket. Go pick up a couple wells. A story that I think every oilman should know our age is the story of Rod Lewis.

Peter Brecht29:32

Mm-hmm.

Wade29:34

Man. Right.

Peter Brecht29:43

Mm-hmm.

Wade29:46

Right.

Peter Brecht29:46

Yeah.

Tadd E Wallace30:03

I mean, if the story of Rod Lewis and how he built Lewis Energy doesn't wake everybody up to think any of us can do it, holy shit. This guy's built one of the biggest oil companies in the state, and he's in the front of the Wall Street, or was it Wall Street Journal the other day on how good of a guy he is at like exploring, right? So if I can say anything to a lot of people like, look, the shit's been in the ground a million years, we're gonna be doing this stuff for another million years, but there's so much opportunity if a guy just wanted to sit down and take a break.

Peter Brecht30:09

Mm-hmm. Yeah, yeah.

Yeah.

Mm-hmm.

Yeah.

Tadd E Wallace30:33

Take a breath instead of going 100 miles an hour as we're always trying to do in the oil field. If you stop for a minute, there's so much efficiencies that a guy could just make something efficient. And if you do it, it's gonna be hard, but as you guys know, they don't pay us in the oil field to do easy shit. That's what we're paying for.

Peter Brecht30:43

Yep.

No, yeah, yeah. We're,

Wade30:49

Right.

Peter Brecht30:53

I mean, we're fortunate. I'm like, I look up to a lot of, there's so many great people to look up to and talk to. And I think what's been fun in just even building this podcast is like, making a phone call, getting connected with somebody like you, then I get to learn all this cool stuff and you're willing to share and talk and like teach others. And I think like that's like, that's kind of a really cool unlock for people too is like.

It's not it's I'm not gonna say that's everybody that's gonna do that But there are some people that are willing to be like look here's let me give you some ideas Let me give you some insight and like you know give you some guidance, so there's that's out there for sure so

Tadd E Wallace31:19

Yeah.

Yeah.

I

Think that a lot of folks though, we have a generational shift in our business, right? And no one, in my opinion, is taking a big enough wherewithal to pay attention to how big this shift is. The Shell generation essentially just put the old school guys on the back burner and it became the 20, 30 year old man's game, the whole Shell boom, if you really think about it, right? The engineers from the people was just a young man's game.

Peter Brecht31:49

Yeah.

Wade31:50

Mm-hmm.

Peter Brecht31:53

You

Tadd E Wallace31:54

And in doing so, guys, there's a huge gap on the forefront oil and gas right now, where guys are just the knowledge base. I was blessed. My whole founding team that founded the company with me and I think made us successful was I could have been everyone's child, every one of my team, you know.

Dave Szabo, Susan Starr, right? 40 years at BP running their big programs. Kevin Lang, who does our chemistry. He ran Exxon and those big chemical programs and designing chemistry for them. So building a company with people that had already done it, where really what I just had to do was ask questions and be the workhorse. Right? Hey guys, you tell me what you need me to do, how do I do this? I'll work. And yeah, I think far too often that we're not going back to some of that old talent. There's a lot of really amazing talent that I think far too often.

Wade32:17

Mm-hmm.

Peter Brecht32:23

Mm-hmm.

Yeah.

Yeah.

Right.

Tadd E Wallace32:41

Yeah, it's shutting down too early and I think that those people still want to play and if you can give them something to play in and make it fun and enticing you can draw talent. My payroll for talent is zero. Outside of my field hands, right, everybody else is giving a little bit of equity in a fun game and go build something really cool.

Peter Brecht32:54

Yeah.

Mm-hmm. Love it.

Tadd E Wallace33:02

I

Think that's really another thing that people are trying to build companies from like, if you're always trying to put your money out on people, right? People can burn a lot of capital rapidly quick. So if you can use all these talents, and Houston is so full of them, Denver, so full of these amazing talented people that, hey man, they did their 30, 40 years of the big guys, they got that really good retirement package, but they're only 65, 60, shit, that's still pretty young, you know? And so they still want to plan, so I tell you, think,

Peter Brecht33:16

Mm-hmm.

Yeah.

Yeah, yeah, yeah. Yeah.

Wade33:28

Mm-hmm.

Tadd E Wallace33:32

A major one for us was being able to draw talents. And I tell people quite often my company was built on a bunch of misfits who just fit perfectly together. Like we're misfits and if you put us on our own, we all got our own little personal hard to deal with, right? But we fit together.

Peter Brecht33:43

Good.

Yeah.

Yeah,

think that'd be a good bumper sticker too for the, or just a slogan, company slogan, there you go.

Tadd E Wallace33:58

I but I think far

Too often, look, not everyone on my team, or I wouldn't say we're all friends, right? But a lot of us, we have different tastes and talents and things that we like differently. You're probably not gonna see us catching dinner with each other two or three nights a month. But we'll get together once a year and throw down, right? You know? So I think so far too often that people think you have to like who you work with and be best friends with.

Peter Brecht34:05

Yeah.

Wade34:06

Mm-hmm.

Mm-hmm.

Peter Brecht34:15

Yeah. Yeah, yeah, yeah.

Wade34:18

Yes.

Tadd E Wallace34:24

I'm not saying that we're not friends, but our relationships are built on let's build something bigger, not let's, need another friend. And I tell people, man, if you're gonna get into entrepreneurship, don't go run with the cool dudes. You may wanna go find the guys that may not meet the cool mark, but can deliver on a professional mark. And I think that's been really good for us. Yeah.

Peter Brecht34:28

Yeah, that's awesome.

Wade34:30

Mm-hmm.

Peter Brecht34:40

Mm-hmm.

So you're

Not an energy drink guy. Are you drinking coffee at least? You like, nope. Good Lord. All right, fair enough. All right, fair enough.

Tadd E Wallace34:51

Oh man, mean caffeine makes me feel like I'm cutting lines at two o'clock in the morning, man. I can't keep looking

Out the closet and stuff, man. Like caffeine gets me going. I don't know what this does.

Peter Brecht35:01

And are you watching, are

You watching Land Man at all or like is it like bringing work home? Cause like that's what it feels like for me. Like we started watching it and then I'm like, it's all oil and gas all the time and now there's a TV show for it, some of my entertainments even. And I'm like, I gotta just pump the brakes.

Tadd E Wallace35:06

Man, I'm

Well,

I watched it for a while but when I realized that, and I'm just gonna say, you guys can cut it if you want, if not, I'm totally okay with it.

Peter Brecht35:21

Yeah.

Tadd E Wallace35:26

There is not a woman I know in West Texas or anywhere in this damn country that I know is going to let their 18 year old daughter upstairs having sex with her boyfriend in his house. Not a dude I know. There's not a dude. Somebody's ass is getting whooped and it's probably two people's ass is getting whooped, right? But I do think that land man's done good for the industry in many ways. People are, my parents, their sons, all three of us are in the business. They had no clue what we do. My dad was,

Peter Brecht35:33

Yeah.

Yeah, yeah, yeah.

Right, yeah, yeah.

Yep.

Tadd E Wallace35:55

Military for 22 years right the idea of rough-necking or frat crews and 18 hour days on 21 day rotations no idea and It's now helps out with life when people like now we understand what all that extra Language that is not usually commonly used in professional settings seems so And so no, I think landmines been good for us, but I do think man there's some parts to it where hey

Peter Brecht35:57

Yeah.

Yeah. Yeah.

Right, right, right, right.

Wade36:14

It's alive and well in certain parts of the country, that's for sure.

Peter Brecht36:17

Yeah, yeah,

Tadd E Wallace36:24

You need a little bit of a story, right? Need to get this story out.

Peter Brecht36:29

Yeah well you know yeah hollywood awareness all that good stuff i will see if they bring season three to california ... they might actually you never know just ... if they can you know it's it'll be interesting way to tell a story so

Tadd E Wallace36:40

My amount of land that is the little clips that you see coming through LinkedIn I'm not a big social media guy, so I don't have a whole lot of it But what I do think something to giggle on my own You know if one of my guys pulled out a damn You know pipe wrenched open and close some valves and shit. Yeah, you're probably not working a very long dog Propane for a living you want to do this dumb shit like no that's not flying with my game

Peter Brecht36:46

Right. Yeah. Right, right. Yeah, yeah. Yeah.

Yeah.

Wade37:04

Okay.

Peter Brecht37:05

Yeah, yeah,

Yeah. Yeah, that's very true. Well, that's great. I got a lot of people I need to say thank you to for connecting us. I'm gonna put, so I'm gonna get your website and the show notes. Is there anywhere else that you would connect with people? I know you're not really online, but where can people find you?

Wade37:09

It was fun.

Tadd E Wallace37:21

Man, I'm on LinkedIn.

The gang's out there. My one big shout out was, yeah, well, Matt Lawler. I'm sure he'll listen to this. That's my dude. He's a great, good engineer, really smart engineer tech guy too, so guns up, right? And so yeah, I think the best way to find us is that I am on LinkedIn. Do answer it. So it's not like if someone reaches out, but I do have some guys that can probably reach out sooner. But as of right now, if you got wells that you're trying to figure out,

Peter Brecht37:28

Okay. Yeah.

Yeah. Thanks Matt.

Tadd E Wallace37:50

Hey, what is the next step? One thing that, I will just say this, two of the super majors that play in the horizontal business have found that just using us on their P &A wells, just getting wells off the P &A list has been, if you think about the value of what it costs to plug a well versus having us come pump on it just to get some production back, right, and recover the well to at least, economically viable.

Peter Brecht38:02

Mm-hmm.

Hmm. Okay.

Sure.

Right, girl,

Tadd E Wallace38:20

There's

A huge value if you can figure out how to work some of these wells and get them off the P &A list. So I would just say, if you guys got guys listening that they got well questions, you guys are thinking about doing acid work and you're trying to figure out acid on a very water sensitive formation, things like that, we'd love to talk.

Peter Brecht38:27

Yeah.

Wade38:37

That's

Awesome.

Peter Brecht38:38

This is

A, actually this is a question I know we're like wrapping up and we're getting towards the end of this, the RCC, so I know like, the RCC in Texas says you got like 90 days if you don't have any production you have to go in P &A, right? I think it's a 90 day term. Do you guys know if it's different in other states or is it pretty much consistent across? And if you don't know the answer that's okay, just, it was something I was like in the back of my head.

Tadd E Wallace38:43

Hang on, let me just...

I don't even know if I really take that.

I would say Wade would probably smile when I say this. I think P &A is more determined by how you label the wells' status. Because there's a lot of wells out there that are status and is different status than P &A, that they're P &A wells, right? So I don't know if it changes across operators. I know that one of the operators we're working with,

Peter Brecht39:08

Ha

Tadd E Wallace39:27

Significant shareholder vertical wells all around the country and yeah I don't I I don't think it makes much of a difference I don't think they care much I think it's

Peter Brecht39:36

Okay, it's just a comment that I had in another conversation. Was like, I gotta bookmark

That, think about it, so.

Tadd E Wallace39:42

What I would say is go talk to some good P &A guys, but I will tell you what I'm learning on the P &A side of the business is you guys, I listen once again, is you guys know what's going on in West Texas and whatnot. I think that whole business is an interesting place to examine right now, especially with how many federal funds they're trying to put into the P &A side, right? The thing that concerns me is how many wells are we closing up that actually could be economic wells? One thing I learned from

Peter Brecht39:57

Mm-hmm.

Yeah.

Tadd E Wallace40:13

I can't say the gentleman's name on here, the owner of a very, very big, big producer was, he never sells his wells because he just knows that he's waiting for a guy like me to show up with the next thing. And in his whole opinion, this is why are we plugging wells if we can manage them? Well, hey, 10 years down the road, some guy may come climbing out of the woodwork and say, let's go pump propane on it. And it works. So it's an interesting thing, the whole P &A, I think the whole P &A,

Peter Brecht40:25

Mm-hmm.

Yeah. Yeah.

Wade40:35

Right.

Tadd E Wallace40:40

Subject is I don't think we're going as depth in as deep on that topic as we really could. I've often wondered like what would happen if they put every P &A well into like a into a state budget and you have the state operate now or maybe not even the state but the state pay someone else to operate and start bringing wells on that actually can be commercial right. There's a lot of places like look at Kansas. Kansas is the place where you got a lot of damn wells right and a lot of them are just sitting there.

Peter Brecht40:47

Mm-hmm.

Yeah.

Yeah.

Mm-hmm.

Mm-hmm.

Tadd E Wallace41:08

And you start looking like the P &A problem is not just a Texas problem, right? Or New Mexico. It's vast, very vast and wide. And I think there's something that could be done there better, but also using updated tech. Well, we were approved by the railroad commission with our technology, right? As like the EOR type of rule. So a lot of people use us because they get the tax credit back on just the cost of our jobs. So even if the will doesn't go economic, they get 100 % of their money back, but they're trying to avoid P &A.

Peter Brecht41:12

Right, right.

Mm-hmm.

Tadd E Wallace41:36

Right, so there's a lot of things that can be that I think around the P &A world that, I also own some of my production, right? So I would just tell you, I kind of like Reed, I look at some of the P &A stuff differently. Maybe, I think maybe may be plugging things way too early. And when you're seeing horizontal walls already getting plugged in the Barnett.

Peter Brecht41:36

Gotcha.

Wade41:36

Right.

We're out.

Peter Brecht41:58

Yeah, yeah, it's a little early.

Tadd E Wallace42:00

You see what I'm headed to, right?

Like we're plugging some stuff that it's like, hey man, we recovered in the barnet max 94 % of it out of a well and you're subbing them for a cement.

Peter Brecht42:11

Yeah, yeah. Yeah, well, I'm glad I asked. I just got a whole bunch of stuff on PNA there that I wasn't expected, but that's good. No, yeah, we need to find a PNA guy, I got that, just somebody that does that exclusively. It'd be fun to talk with him. So anyway, Tad, if you know anyone, hook us up. We'd love to get connected, but... No, I got...

Wade42:11

Mm-hmm.

Tadd E Wallace42:13

For us all.

And mind you, that's not my world, but I can just take it my perspective.

I don't think that guys like me man. I'm trying to keep them out of P &A and Wells.

Wade42:36

That's right, I was gonna say, it's not what you do, but

It's adjacent.

Peter Brecht42:41

Yeah, we gotta have a balanced conversation, right? No, whatever that means, so...

Tadd E Wallace42:45

I think the one you

All had with Dunlap

Peter Brecht42:48

Yeah, yeah, I

Mean, yeah, no, Hawks a good dude. He's got, it's just, when you get into the technical side of it or like, people that are doing it for a living, it's I mean, that becomes a kind of a different thing. Hawks, think more on the obviously he's done everything I feel like and got a lot of smart people behind him. But people that are doing it for a living, right, they might have a different perspective on it it's their livelihood and how they're kind of so I don't be curious how that works. But all right.

Tadd E Wallace43:06

No, no, no.

Cool. Yeah.

I would definitely pay attention to that one. I'd be interested to hear in that conversation for sure.

Peter Brecht43:19

Yeah, it's good to hear everything, right? Well,

I'm gonna wrap up the show here. Thank you guys for listening. Tad, thank you so much for coming on. Just so glad we got connected. Wade, thanks for taking time out of your day and hanging out. And we'll see you guys again next week.

Tadd E Wallace43:29

Thanks for watching!

You'll have a good one, guys. Take care, guys. Thank you.