Red Dirt Results: Growth Through Reliability

Scott Gilliland00:00

…all the time. The company I worked for prior to this — they’ve been around for 70 years, family-owned. We hauled water, but we had hot oilers and pressure trucks, so we’d help out on fracs, mainly well control on the frac side. But there’s so much to learn. I go to schools all the time.

Wade Spear00:08

Mm-hmm.

Scott Gilliland00:26

Peter, I’m a member of the ALRDC — the Artificial Lift Research and Development Council. It’s a nonprofit. You’re more than welcome to join. We’ve got a rod pump workshop coming up September 8th through the 11th in Midland.

Peter Brecht00:39

Yeah. Okay.

Scott Gilliland00:53

They take abstracts — it’s basically another version of the Southwestern Short Course. It’s a variation of that, because not everybody can take off in April and go to Lubbock for a week. So we break it down a little shorter, but you get just as much. It’s the same people who’d show up to the short course. We do rod lift, gas lift, plunger lift. I don’t know that they do a lot of ESP, but it’s mainly home to the Permian Basin, so a lot of rod pumps. You get engineers and people presenting papers, and it’s a very, very great learning experience. I’ve been to one.

Wade Spear01:10

Right. I got you.

Scott Gilliland01:52

I went for three days and learned so much. And you’re not overwhelmed with information — they break it up so you can digest it, and it’s not going over your head.

Wade Spear02:03

Go ahead.

Peter Brecht02:07

Okay, we’ll check into that. So, just to keep things moving — I’ll kick us off, do kind of an intro, and then Wade, I’m sure you’ve got a couple of questions we can start with. We’ll make it official. Cool — hey Scott, thanks for joining us. Just so you know, I’m going to do a bumper video at the beginning with your name, where you’re from, all that stuff, so we can either cut that or leave it out. I’m just going to go by Scott and we’ll keep it casual.

All right. Well, hey Scott, thanks for joining us today. I know you’re out in the middle of the field right now, so thanks for taking the time and spending it with me and Wade to answer some questions. I’ll let Wade ask most of the things — we’ve gone through it ahead of time. The thing I want to kick us off with is: what got you into artificial lift in the first place? Was there something in particular that caught your eye? Was it a friend? Was it family? Tell us a little bit about that.

Scott Gilliland03:14

Okay. I started working in oil and gas, like I said, 15 years ago, and I worked for three different companies that basically all did the same thing. You go out to a location — I started out hauling water. I got a CDL, hauled water, did that for a while, and moved up to a sales position. That’s where I really got involved in artificial lift. We did different things — we had hot oilers, and on the completion side we had some super heaters — but mainly the hot oil work is what got me started on the artificial lift side of things.

And just to be transparent — I was watching TikTok. I started following this guy named Joseph Anthony Norman. He owns Fluid Levels in Midland. At the time, I wasn’t really happy with the company — well, it’s not that I wasn’t happy, it’s just that I knew I wasn’t going to go any further. I’d reached the ceiling; there was no more room for growth. I kicked it around, and I picked up the phone and called Joseph. We had a long conversation, and next thing I know, I’m filing for an LLC and getting ahold of the guys at Echometer.

As far as artificial lift diagnostic tools go, Echometer is really the company. Their software, their equipment, everything — they’re the way to go if you want to start shooting fluid levels and running dynamometers on rod pump wells. Their software is amazing. When I go out and shoot a fluid level and run a dynamometer for a customer — my customer base is a lot of smaller independent operators, and they typically have legacy wells, what we call stripper wells. They pick up the phone, they call me, I go out, shoot a fluid level, maybe run a dynamometer. The report they get back tells them everything they need to know about what’s going on with that well. It really lays it out so you can map out what you need to do to increase production or offset operating costs.

Peter Brecht06:13

Okay. Is there ever a point with these smaller stripper wells where you just can’t fix them anymore? Where it’s like, okay, there’s fluid, but we’ve got too many issues and it just doesn’t make economic sense, as Wade would say?

Scott Gilliland06:28

Well, it’s more that they’re at the end of their life. There’s your initial artificial lift system that you’re going to use — some people just drill and go straight to rod pump. But in Oklahoma, we have a lot more gas in the basins we’re operating out of, so you see a lot more gas lift and plunger lift. Then at some point, to get as much recoverable fluid as you can, you’re going to have to go to a rod pump system.

But to answer your question — yeah, there is a point where the economics don’t really add up. At that point, with the Oklahoma Corporation Commission, I think you have to file — I think it’s a 1003A. In Texas, we call them H-15s. If you’re the operator of that well, you basically go in, shoot a fluid level, and find out if there is any fluid and, if so, where it’s at. As long as it’s below the water tables, you’re good — you can just let it sit idle. But at some point, you are going to have to plug that well. Somebody is.

Wade Spear08:00

Right. Yep.

Peter Brecht08:00

Mm-hmm. Okay, got it.

Scott Gilliland08:03

But there will come a point where you’ve recovered as much as you can from that well, and it just doesn’t make sense to keep trying and spending the money. It’s depleted, and it’s time to be plugged.

Wade Spear08:19

A lot of times with these recovery methods, you’re talking about end of life, right? Over that amount of time, you can accumulate all different kinds of damage to your casing or your well. There could still be some recoverable in there, but the cost to repair it and get it flowing again just far outweighs whatever’s left. If you scroll Twitter lately, you can see a lot of people saying, “I’d have the money to fix this at $80 a barrel, but at $57 a barrel, it just doesn’t make sense.”

Scott Gilliland08:52

Yeah. And it’s crazy — it’s funny you mention that, because I have a new customer with four wells making about three barrels a day, which for him is mailbox money. I went out, shot some fluid levels, ran a dynamometer, and verified his well is pumped off. There’s a time when you have to shut it in, let it build some fluid, and then figure out how long it takes to pump down the amount of fluid you gained — that’s how you set your timers. But at that point, with oil up at like $78 a barrel, he said, “Just keep pumping. We’ll worry about it later. Get as much as you can while the price is a little elevated, while this last geopolitical issue plays out.”

Peter Brecht09:46

Event. Yeah, yeah.

Wade Spear09:48

Right.

Scott Gilliland09:52

So yeah, it’s weird — before starting this company, I hadn’t really paid that much attention to the price of oil. Right now, I look at it every day.

Wade Spear10:08

It affects your activity, doesn’t it?

Scott Gilliland10:20

It’s weird, because right after the election, we started selling some gas — exporting a lot of gas — so you saw the price of gas go up. A lot of my customers had wells producing gas that, prior to that, weren’t economical. It was more of a byproduct, and they didn’t want to flare it, with everything that’s going on, so they just shut those wells in. Lately, I would say 80 percent of my business has been on the gas-producing side.

Wade Spear11:00

I gotcha. Yeah, it’s really interesting. On the drilling side, our cycle times are a lot longer — for prices to go up and for us to contract a rig, drill a well, complete a well, and start producing takes a whole lot longer. But with what you’re seeing out there, prices go up and down pretty quick and you can respond quickly. You can probably get a well back online in a matter of days to take advantage of a temporary increase in revenue, I guess.

Scott Gilliland11:30

Yeah. Like you said, getting that well back online doesn’t take long. And a lot of my work is troubleshooting issues with a well — even just providing another piece of data to help operators make informed decisions on what they need to do to overcome whatever issue it may be.

Wade Spear12:04

Now, you mentioned Echometer, and I’ve always — like I said, I have limited experience on the production side — but I’ve always known it to be the gold standard for fluid levels and, like you’re saying, gathering information for intervening on some of these wells. A lot of what we like to do here starts at the base level and explains how stuff works. So would you explain how an Echometer works and what kind of information it gives you?

Peter Brecht12:43

I might have lost him there.

Wade Spear12:45

Can you hear us, Scott? That looks like his connection. Is that a connection? It says 4 percent. Ours is 99 percent.

Peter Brecht12:55

That’s a good question. I’m not seeing a percentage on his.

Wade Spear13:01

Mine’s showing. Yeah, well, it recycled — I’ll send you a screenshot of mine eventually.

Peter Brecht13:10

Yeah, no worries. We’ll get better at this with time. Scott, I think we lost you. Are you still there? All right. Oh man.

Wade Spear13:18

Nope, he dropped.

Peter Brecht13:23

We’ll see if he logs back in.

Wade Spear13:26

Well, being out there in who-knows-where rural Oklahoma… there, we’re back at 4 percent. There you are.

Scott Gilliland13:32

Hey, sorry about that. Someone called, and I ignored the call and lost sound.

Peter Brecht13:42

You’re good. You know what? That happened to me last week when we were recording with Cory — I kept getting phone calls. It’s all good.

Scott Gilliland13:53

Can you guys edit that out?

Wade Spear13:56

Oh yeah.

Peter Brecht13:56

Yeah, yeah, we can. Pretty much anything — we can edit it out and make it look polished, so no worries there.

Wade Spear14:05

Want me to re-ask it real quick? Okay.

Peter Brecht14:06

Yeah, let’s just re-ask the question on the Echometer, and then Scott can jump in.

Wade Spear14:12

All right — so Scott, you mentioned Echometer earlier. I’ve got pretty limited experience on the production side, but I’ve always heard it and know it to be the gold standard for getting information on fluid levels and giving you data to make informed intervention decisions. So if you wouldn’t mind, walk us through it: what does an Echometer do? How does it work? What kind of information does it give you?

Scott Gilliland14:37

So, Echometer has fluid guns, obviously. And — here, I’ll flip this around. I don’t know if you can see this, but that little box right there — I use the wireless base station. It connects all my equipment, so I can run a dynamometer and use a fluid gun at the same time and knock out two tests.

Yes, Echometer is by far the gold standard as far as artificial lift diagnostic tools. Gustavo Fernandez and Justin Bates are the ones who teach most of the classes at Echometer, and those are free. Anybody can go down to Wichita Falls and take a class — they run anywhere from two days to five days, depending on which block of training you want.

And great customer service. When you buy the equipment, they help not only with problems you may be having with the equipment, but if I have a well and I’m not sure where the fluid level is, I send the file to Echometer and let Justin or Gustavo or Ronnie look at what I’ve done. They can tell me, “Hey, this is where we think the fluid level is, based on X, Y, and Z.” And that X, Y, and Z is years and years of experience. Sometimes when you shoot a fluid level — say it’s on a gas lift and you have a compressor, so you have a lot of background noise — it’s hard to pick out that little down-kick that indicates where the fluid level is. But they’re a great, great company. I can’t say enough great things about Echometer and the people who work there. They’re incredible.

Wade Spear16:51

So essentially, what the Echometer does — it’s essentially shooting a sound wave, sonar, right? It goes down there, measures the travel time down and back, correct? To give you an idea of where that fluid level is.

Scott Gilliland17:05

Yeah, correct. So you build your well file, and you look at, say, your tubing anchor, your end of tubing, some perforations — so you have some known depths. We use either nitrogen or CO2, which are inert gases. Everybody thinks you shoot that down into the well — it just creates a pulse that goes down the wellbore and reflects off of, say, a tubing anchor. Your decreases in cross-sectional area of the wellbore will be down-kicks, and your increases will be up-kicks.

They just did a revision on their software, and there’s a new test we can run called the dual shot. Say you think you have a hole in your tubing. As long as that hole is above the fluid level, you hook up two guns — one on the tubing side and one on the casing side — and you fire down the tubing and listen on the casing. Then you reverse it. Where those two guns communicate, that indicates where your hole is. I did one in April for a new customer — did a dual shot, and I told him it was on the 49th-and-a-half joint. Sure enough, it was on the 49th joint when they pulled the tubing. They’ll tell you it’s plus or minus a joint.

Wade Spear18:56

Wow, so it’s pretty accurate there.

Peter Brecht18:57

Wow.

Scott Gilliland19:03

I think it’s plus or minus — I want to say, and I may be wrong, eight to six feet. But it’s really accurate under the right conditions. And that saves customers time and money, because back in the old days, you’d have to get the silver paint, mix it up, pour it down the tubing, start pulling tubing, and look for paint. Now I can tell you pretty much where it is. Say it took you a week — five days — to pull and inspect the tubing. Now you pretty much know where it’s at. You can pull the tubing to that point, replace that joint, go back in the hole, and you’re back at work.

I tell people that with Echometer, I might not be able to find ways to optimize a well, but I can offer some suggestions to offset your operating costs.

Wade Spear20:16

So what do you mean by that? Give me an example — offset your operating costs.

Scott Gilliland20:19

Okay. Say you’re on a rod pump well with an electric-powered motor. Some people will run those all the time, and you don’t have a high enough fluid level to do that — you’re running your pump dry. So we can set your timers. And with all the information you put into the computer — say your well’s out of balance, meaning your counterweights, you may be rod-heavy or weight-heavy — you can go in and make those adjustments so you’re not burning as much electricity to pump that well. That saves you money over the long run.

Peter Brecht21:17

Mm-hmm.

Wade Spear21:17

But it probably also increases your reliability, right? You see fewer failures and everything associated with that.

Scott Gilliland21:23

Right. And that’s the goal — to decrease failures and make the equipment run more efficiently. There are different ways: if you have a well with a high fluid level and you’re just not getting it pumped down, you might be able to enlarge the pump. There are different things you can do to, like I say, increase efficiency and increase profitability.

Wade Spear21:59

Right. Alright.

Peter Brecht22:01

So maybe another basic question: how does gas lift work? I kind of get the idea of a pump and rod and all that, but gas lift — I’m sure it’s as simple as it sounds, but maybe not. Could you peel that back a little bit for me?

Scott Gilliland22:17

Sure, sure. So there’s continuous gas lift — that’s where the formation itself is able to unload your fluid. And then you get into where you have gas lift valves set at predetermined pressures and predetermined depths. As you inject gas down — usually down the backside, down the casing — it’ll inject to a certain point, and when that valve shuts off, your pressure increases and it valves down until you get to the lowest gas lift valve, and you operate off that valve. You inject gas down the casing, and it lifts your fluid through the tubing.

I’ve got a customer who had just drilled and completed a well, and he was injecting down the tubing and lifting up the backside — annular flow is what we call that. He called me and said, “I think there’s something wrong, because we just kicked the well on and it automatically went to the lowest level and started injecting.” He wanted me to come out and verify, and I did. When they determined where those gas lift valves needed to be set and at what pressures, they had just overshot it, so it went to the lowest level and started injecting from there.

Wade Spear23:57

Gotcha.

Peter Brecht23:57

Okay, okay.

Scott Gilliland24:00

So that’s kind of what gas lift is. It is definitely a science to figure all that out.

Peter Brecht24:12

Yeah, I’d imagine it takes some math — you can’t really eyeball that. You’ve got to figure it out, put it in place, and see how it works.

Scott Gilliland24:20

Yep, there are petroleum engineers out there, and that’s what they do. I like working on wells that are using gas lift. It’s a little more challenging than, say, your rod pumps. Every form of artificial lift has its challenges, but I really like doing the gas lift. It’s pretty cool.

Peter Brecht24:49

So besides your Echometer, what kind of equipment are you taking out to the field? This will be my last question, and then I’ll let Wade ask about the GAPL and the PAGL and all that fun stuff.

Scott Gilliland25:01

Honestly, that is the only equipment — other than different-size pipe wrenches and all the little fittings you need, because you go out to a well and every well has little nuances in how it’s plumbed. You have to have a slightly different fitting for every one. It’s crazy. When I bought my equipment, the next place I went was a pump and supply, and I bought pretty much every type of fitting you can buy — from swedges to nineties to nipples and collars. That was another big purchase. I’ve got a whole toolbox just full of different types of fittings.

Wade Spear25:56

Pretty big investment there, right?

Scott Gilliland25:59

It is, but it’s a one-time investment. Unless you leave some stuff on location — which I’ve done — and then you’re at a well like, “Hey, I need a… where is that ninety? I know it’s around here somewhere.”

Peter Brecht26:14

Yeah, yeah. It’s fun.

Wade Spear26:14

Right. Well, I’d miss an opportunity if I didn’t tell you I love the name of your business. Anytime I see “Red Dirt,” I immediately think Oklahoma, so I know where you operate.

Scott Gilliland26:28

Yeah — it’s funny, because Oklahoma has a music scene called Red Dirt. They call it Texas Red Dirt music. Before I went to work in the oil field, I actually worked for a national touring band as a road manager — a tour manager.

Wade Spear26:47

Oh really? Can you say which one?

Peter Brecht26:48

Really?

Scott Gilliland26:52

I worked for a band called The Great Divide for a little while. And when Mike left The Great Divide, I went to work for Mike, and then they got back together. About the time they got back together is when I jumped into the oil field. So I’ve spent many years out on the road. Basically, the way I look at it, it’s like herding cats. That job was challenging itself, because artists have their own timeline that they typically don’t follow — sure, that’s why they’re musicians and artists — but you have to get to an interview at a certain time. It’s just constant babysitting.

Wade Spear27:47

I tell you what, man, it’s that way in the oil field sometimes too — certain companies and certain jobs. There are a lot of no-calls and no-shows and running late and all those things as well. So it sounds like you were prepared, from the road, for dealing with all the people.

Scott Gilliland28:02

It was challenging, but I will say this — and I tell people this all the time — you meet the greatest people in the oil field. As you start, you build a reputation. And if you do what you say you’re going to do, show up on time, and you’re fair in your pricing, you’ll always have work. But if you’re one of those who calls in late and doesn’t get the job completed, you won’t be in the industry for long.

Wade Spear28:41

No, it has a really good way of sorting those people out. I learned that when I started — I was an MWD — and I realized very quickly that if you’ll answer the phone when the coordinator calls and not complain about wherever they’re sending you, you’re starting out ahead of 70 or 80 percent of the people right there. So I definitely see what you’re saying.

Scott Gilliland28:59

Yeah, your reputation follows you, and it’s hard to rebuild once you’ve messed up.

Wade Spear29:09

Yep. And it’s a very small world too, isn’t it?

Peter Brecht29:12

Yeah.

Scott Gilliland29:14

Oh yeah. When I first got started, I knew a lot of people within, I’d say, three counties. There are some operators who work here, and they helped get my name out. Next thing I know — I started small and built up, and now I’m getting into your independents. I started with zero, and I think I have 33 customers now.

Wade Spear29:46

That’s amazing. And a lot of that is probably word-of-mouth reputation — them talking to each other, building that comfort level.

Scott Gilliland29:53

A lot of that. I’ve tried every type of marketing, and it goes back to your reputation — referrals. As long as you do a good job, people will refer you out. That’s where the majority of my customers have come from: referrals.

Peter Brecht30:19

It sounds like you’re putting the work in and getting some great results. But are there any particular scenarios or challenges where you got to the well site, looked at it, and thought, “Man, I don’t even know how this is gonna work” — but then after some tinkering, you figured it out? Any particularly interesting situations that might be fun to talk about?

Scott Gilliland30:42

I try to get as much information as I can when the customer calls the job in. But there are times — okay, here’s an example. I had a customer call and say, “Man, I’ve got three wells, and they’re right beside each other.” Well, that day I think I put 300 miles on my truck. His “right beside each other” was two counties over, and each well was a little bit different.

One was a gas well he’d just acquired out in what we call the Cherokee Shelf — that’s where the hotspot is right now. And I was looking around, and they’d taken the lubricator off. Everything you would expect to see, especially when you go to a plunger lift well — all of that was stripped off. So I had to improvise and shoot down the backside. I put a bull plug on there, and I wasn’t really sure — I opened the gate valve and thought, “Man, I hope this doesn’t just…” I wasn’t really sure what I was going to find, but I made it work.

Wade Spear32:11

I got you. And how many times — sorry, go ahead.

Scott Gilliland32:13

No, go ahead.

Wade Spear32:17

I was just going to say — how many times are you working off wellbore schematics from 30, 35 years ago, and you shoot something and it just doesn’t seem to agree with what all your documentation is saying?

Scott Gilliland32:29

Or I’m working off a completion report from 1972, and that’s all I have.

Peter Brecht32:38

What? You got it.

Wade Spear32:52

Well, being able to read all the acronyms and everything else is a challenge in and of itself. It’s almost like reading another language.

Scott Gilliland33:03

I just had to build the well file based on what I thought: if this was my well, and I know this is the depth and this is the zone they completed, what diameter of rod and what length would I put in, and where would I put my pump? The rule of thumb, especially on a rod pump well, is you put it down below your last perf — or you put it up a little higher than your top perf — because you want to use that last perf for natural gas separation. But if you have solids or sand issues, you don’t want that falling back in on your pump. It’s all trial and error. You figure out what works best and go from there.

Peter Brecht34:03

I like how you framed it — “if this was my well, what would I do?” I think it’s cool that you’re taking ownership of it mentally as you work through it. And you’re talking about these documents from 1972 — a lot of these companies are saying, “Hey, we’ve got this whole AI thing coming, we’re going to get all these documents uploaded, and everything’s going to be available.” Do you see any value in having them digitized and put into some AI system? Or is that just selling VCs and trying to raise capital for nothing at that point — on smaller wells, for example?

Scott Gilliland34:43

Well, to answer your question — yeah, there’s great value in that. These wells, people buy them over time. And you’d be surprised: if you purchase a well, and you go to the company you bought it from and say, “Hey, I need all your records, all your well files,” and they say, “We don’t have those” — now what do you do? You’ve got to pay a workover rig to come out and pull everything, and literally count how many rods, what size pump you have, whether it’s in good condition. Usually at that point, I’d recommend going ahead and sending your pump off to be rebuilt, because how long has it been sitting? You should have the latest production reports, but some companies don’t even give those out, or the guy you acquired the well from didn’t have them to give you. I’ve found myself in that situation where I’m actually building the well file for the customer.

Peter Brecht35:57

Okay, okay. So yeah, I could see the justifiable need for that. Because again, you look at all the VC in this space right now — oil and gas seems to be having its moment with AI. Every industry, really, but what I’ve been tracking a bit more is the documentation and how that works. So it’s good to know.

Wade Spear36:19

Yeah, lots of companies are making a big push to do that.

Scott Gilliland36:23

I’m good friends with a gentleman by the name of Holt Hegge, and where he works, there’s a lot of AI and optimization. They sell a product called the SMARTEN, and it’s a POC for your rod pump wells. That AI learns the well over time, so it’s helping you optimize your production. At the end of the day, that’s the name of the game out here for any operator: how can I optimize my production, whether it’s gas or oil?

Peter Brecht37:08

That’s awesome.

Wade Spear37:12

I think with something like that, instead of having to go out there and read dyno cards and do all these different things, you’ve got somebody watching it 24/7 and making adjustments on the fly. Man, it feels like that’s the way everything’s eventually heading.

Scott Gilliland37:30

Sure. And that’s the thing — I would say it’s great, but there’s that other aspect, the elephant in the room nobody talks about: how many jobs are we going to lose because of AI? But I’m one of those who believes — and I learned this a long time ago — if you make yourself an asset to whoever you’re working for, they’ll always find something for you to do. And especially for the new generation just now getting into oil and gas, I would highly advise: get in and learn as much as you can about AI. You’re going to make yourself so valuable that you’ll always have a job.

Peter Brecht38:24

There was a particular tweet I was trying to pull up — I don’t know if I sent it to you — but it was along those lines. This has been changing; AI is new, but it’s not new, right? They’ve been optimizing and finding different ways around things, and the whole idea is it’s just going to evolve. So I agree. I’m not in the field in the oil and gas industry, but AI is huge for what we do, even. It’s a very interesting shift. I think that’s great feedback on what they’re doing.

Scott Gilliland39:02

You know, I feel like we’re at that place where, back in the day, operators didn’t have computers. Your lease operators didn’t have computers in their trucks — they wrote everything down on paper. Then came the computer, and it’s easier to send those reports. You don’t have to go find a pay phone, call in, and give somebody your reports. I think AI is just another one — we’re at the birth of that new technological tool that we have to increase profitability and make everybody’s life easier. And for engineers, they can make those decisions right there on the fly, because they’ve got the information in front of them. There’s not that lag.

Wade Spear40:05

It’s definitely increasing the efficiency. The amount of data and information you can get to make those decisions — and even using AI to inform those decisions. In the oil field, we’ve stepped through two or three decades’ worth of technology innovations that have been encroaching and making everything we do more and more efficient and more reliable. I think AI, like you’re talking about, is just a natural progression of what we’ve seen over the last few decades.

But at the same time, it’s probably never going to replace the work of rigs going out there and pulling tubing strings and doing a lot of those things. One of the things — I’ve been with companies either acquiring companies or being acquired ourselves — and one of the things I always say is: the closer to the wellhead, the safer you are. I think a lot of that’s very true, because you still need people to go out there and, like you talk about, turn wrenches and pull tubing strings and do all these things.

Peter Brecht41:17

It does seem like the… go ahead, sorry Scott.

Scott Gilliland41:22

I was just going to second what Wade was saying about being closer to the wellhead. The closer you get to the wellhead, the longer the longevity of your career. I learned that when I was hauling water for the company, and I thought, “Man, I want to do something else. I want something more.” The closer you get to the wellhead, the more you learn, and the more valuable you are — especially at service companies. And like you said, workover rigs — you can’t replace that.

Peter Brecht42:06

Absolutely. A friend of mine went through Y Combinator, and he’s building these cool things, and he’s always saying the more successful companies are closer to their client. I think it’s the same thing in oil and gas — the more successful companies are closer to the wellhead. I just want to put that in there so I can remember it for later. But anyway — more specifically, I wanted to talk about the… Wade, I’ll let you ask the question, because you can frame it properly. The GAPL and the PAGL.

Wade Spear42:35

Okay. All right — so Scott, earlier we talked about GAPL and PAGL and some of these other recovery techniques. At this point, you’re starting to combine different aspects of artificial lift. So if you wouldn’t mind, walk us through the difference — what GAPL is, what PAGL is, and maybe a little bit of the difference there.

Scott Gilliland42:59

Okay. So PAGL is plunger-assisted gas lift. Think of it more as continuous flow —

Wade Spear43:14

Flow from the reservoir, or flow from a compressor?

Scott Gilliland43:17

Well, initially flow from the reservoir until it gets to a point where it can’t lift. You drill the well, complete the well, and you start your decline curve. As that well declines, you’ve got to go in and add different things. PAGL, I would call your first stage. The well can’t unload itself because you’re getting more and more fluid, so you add a plunger to help lift that fluid. Then you get to a point where you think, “I’m going to put a compressor on here,” so you have a compressor that injects down the backside to help lift. Eventually, you’ll have to put in your gas lift valves, and then you can inject your gas — most people get gas from another location to inject down the wellhead.

That’s when you get into your GAPL — that stands for gas-assisted plunger lift. That’s where you have to have outside gas injected down so you can lift the fluids. And then the other stage — again, everything goes back to this — if you want to get as much recoverable out of that well, you are at some point going to have to put in a rod pump.

I have a customer right now, and we’re discussing that very thing. He wants to go ahead and put the rod pump in, and I’ve told him, “Let’s hold off. You’ve had a plunger in here previously. I think the next thing to do is look at a compressor” — put a compressor in to help inject that gas down. It does make a lot of oil. So that’s where I’m leaning. He’s looking at rod pump, but rod pump wells and gas — they’re not good friends. They don’t like each other. So I’m saying, let’s produce it with a compressor before we jump into adding a rod pump. Does that answer your question?

Peter Brecht45:47

Yeah, perfect. Out of curiosity — I don’t own any wells and I’ve never had to maintain one — to put a rod pump in, is it tens of thousands of dollars? Or is it a couple thousand? What does it cost to do something like that?

Scott Gilliland46:07

To convert over to rod pump? Yeah, it’s pretty costly. It depends on whether you have a horizontal or vertical well — vertical is not as costly as horizontal. And Wade, I know you can add to this: as we’ve progressed in the industry — it used to take three months to drill a well, and now you’re doing it in three or four days — those wells are really deviated. That’s another time you use gas lift, because of the deviation.

So to answer your question, it depends on how deep and how deviated that well is, because it’s hard to get your tubing to make those doglegs, and then you have your rods rubbing up against your tubing. You can put rod guides in, you can do different things, but you still have to overcome those challenges.

Peter Brecht47:23

Okay, gotcha.

Wade Spear47:24

That was one of the things — at one of the previous companies I worked for, the production manager always loved to give me a hard time about the crooked holes I drilled, because he said it was ruining his long-term production. He’d say, “You guys drill it for a month, but we’ve got to produce it for 30 years.” So he was always giving us a hard time about the deviated portions of those vertical wells.

Peter Brecht47:48

Sounds like you should call Scott — he might help him out.

Scott Gilliland47:51

Lynn Rowland at Echometer calls it the drunken porpoise, because they just kind of corkscrew and go around. It’s funny — when I build a well file for horizontals, I always say, “Hey, get me a deviation survey,” because once I put that information in, it adds a piece to the puzzle that helps me give them more accurate data — like, “I think this may be your problem.”

I’ve got a customer who was on GAPL, and he was coming up with some dry runs on his plunger and couldn’t figure out what was going on. What it was — there was just a dogleg, and the tubing had just a little bit of what I’d call a shift. Once we got the plunger to surface, we took it out and looked, and sure enough, the bottom of that plunger had taken a beating, because it would fall, hit that spot, and just rest there. We got it addressed, got it fixed, and it’s running great now.

Wade Spear49:13

Right. Okay. And they also make tons of different kinds of plungers for all different kinds of issues.

Peter Brecht49:15

Okay. Huh.

Scott Gilliland49:22

I work with a company called Endurance Lift, and they just modified some plungers. I was tracking the fall velocity of these plungers — you’d be amazed at how fast they were falling, like 3,000 feet per minute. So that plunger going from surface to the bottom-hole assembly — the average was about five minutes, a little less than five minutes. That’s traveling.

Wade Spear50:04

Wow. So they were really able to minimize their shut-in time.

Scott Gilliland50:09

Yeah. And if you can do that, you get more production. Again, it goes back to efficiency. I know one of the questions you guys had sent me was about tracking plungers — how do you optimize by tracking plungers? — and Wade just nailed it on the head. If you can decrease your shut-in times, and you’re getting that plunger to lift fluid to surface more frequently and as efficiently as possible, that’s just more money you’re making. You’re getting your gas down the sales line and your fluids to the separator.

Wade Spear50:52

It’s all about lowering the bottom-hole pressure. So the more water you can get off, the better.

Peter Brecht50:53

Okay, gotcha.

Scott Gilliland50:59

Yeah — how do you decrease that bottom-hole pressure?

Peter Brecht50:59

Okay. This is technical — I’m nodding my head like…

Wade Spear51:00

And this is still scratching the surface. If I understand it, it’s scratching the surface.

Scott Gilliland51:04

We just kind of scratched the surface.

Peter Brecht51:10

Yeah, that’s rad. This continues to just amaze me. Scott, how are you doing on time? I want to make sure we’re not cutting you off — I told you we’d be an hour, so I just want to be respectful of that. Okay, sounds good.

Wade Spear51:24

I’m probably about to have to drop in a couple of minutes. If you guys want to continue without me, that’d be — you know, I’m not going to feel needed, don’t worry.

Peter Brecht51:31

We’ll be alright — I’ll cut it.

Scott Gilliland51:34

Hey, Wade — send me your address. I want to send you a hat and some stuff.

Wade Spear51:44

All right, man. I’d love it. Peter, are you still there?

Peter Brecht51:44

Yeah — we lost Wade. It’s all right, I’ll email that over to you. He’ll probably pop back on, but we’ll just do a handoff and ask where people can find you and how they can learn more about you, and then that’ll be it. And then we’ll pass each other on TikTok and that kind of thing.

Wade Spear51:54

I don’t know that I’ve got your — well, I’ve got an email with you, that’s right. Are you guys there? Hello.

Scott Gilliland52:09

Yeah, so you can find me — do what?

Peter Brecht52:11

I lost you there, Scott. Okay — sorry, let’s see. Yeah, you’re good, I think we’re back. Scott, thanks for your time today. Just real quick — where can people find you? How can they learn more about what you do?

Scott Gilliland52:28

Okay. I’ve got a website — it’s reddirtfluid.com. I also have a Facebook page, Red Dirt Fluid Services, so you can find me on my socials. My email is scott@reddirtfs.com. That’s where I’m at. Call me if you have an issue with your well.

Peter Brecht52:51

Perfect. Awesome. We’ll point everyone to your website and —

Scott Gilliland52:57

Do I —

Peter Brecht53:00

Oh no, you’re good. That was perfect — whatever you were going to say there. “Any issues with your well?” Let’s throw that in.

Scott Gilliland53:06

Yeah — if you’re having a problem with your well, you’ve lost some production and you’re not really sure what’s going on, give me a call. I’ll come out, shoot some fluid levels, track some plungers, whatever you need.

Peter Brecht53:24

Perfect. Well, Scott, thank you for your time today. I’ll catch you again soon and we’ll go from there — have a great afternoon.