Company Report: Ensign
Ensign Will Matthews talks to Exec Digital about Ensign's rapid growth, technological innovation and the launch of the next generation ADR 500

Ensign United States Drilling Inc. serves oil and gas companies exploring in the Western United States. A subsidiary of Ensign Energy Services, the company provides contract drilling services primarily in the Rocky Mountain and California regions. It is the third-largest and most active land-based drilling contractor in the Rockies.

Headquartered in Denver, Ensign has 66 drilling rigs in operation in Colorado, Montana, Nebraska, Nevada, North Dakota, South Dakota, Utah, and Wyoming. In California the drilling contractor operates 18 drilling rigs primarily in the San Joaquin, Los Angeles, and Sacramento basins.

Founded in 1989, it quickly worked its way up the oil and gas industry, becoming a major player. Will Matthews, vice president of marketing, believes the company's rapid expansion is due to delivering experienced crews and well maintained and designed equipment.

"Since our inception, we have grown to the point where we have earned a significant market share in the basins where we are focused," says Matthews. "We have built top shelf fleet and added twelve next generation, technically advances rigs. These upgrades and additions have provided us with the ability to satisfy the demand of selective oil and gas operators. And has allow us to become a major player in the contract drilling industry."

Well drilled
Ensign provides equipment and services for drilling oil and gas wells on either a footage, day-work or turnkey basis. It now has more than 76 drilling rigs and 15 well-servicing rigs operating in the United States.

"Our strategy has always been to become a vertically integrated company," explains Matthews. "Unlike most drilling contractors, we have a lot of other services we can provide. These include underbalanced drilling units, coring rigs, coil tubing drilling, well service rigs, oilfield rentals, camp and catering servicing and directional drilling services. In essence, we are becoming a one-stop shop that operators can count on for quality services."

Innovation, flexibility and mobility
Ensign has accumulated an extensive rig fleet which has all the necessary flexibility and mobility for meeting the challenging demands of today's oil and natural gas industry. Over the years, it has been an innovative organization, contributing to advancements in drilling and well servicing through the innovative use of advanced technologies.

It is believed that Ensign, which is seeking further expansion in all its markets, will soon enter into the Fort Worth basin, as well as other basins in the US. Such growth opportunities present an opening for the company and will enable it to continue to contribute to the success of its customers within the sector through the implementation of advanced technologies, particularly the new generation, fit-for-purpose ADR (Automated Drilling Rig) drilling rigs.

Excited by the market opportunities the ADR 500 opens up, an enthusiastic Matthews continues: "The ADR is able to move in quickly on a very tight drilling location, saving valuable time and money. The ADR rigs are available with self walking abilities which makes the ADR rig a perfect solution for multi-well pad locations. Since the ADR 500 has an automated iron derrickman the need for a crew member to be in the derrick is eliminated which has contributed to reduction in injuries."

The bottom line is that the advancements built into the the ADR series of drilling rigs improve employee safety. "When it comes to operating drilling rigs, we have made a number of step changes and advancements in the area of safety," explains Matthews. "From the design up, the Automated Drilling Rigs have some distinct advantages. ADRs are highly automated and eliminate many potential dangers, improving safety. Our safety record has reflected the fact that we have managed to get people out of harm's way."

The ADR 500 helps take people away from danger, minimizing risk and eliminating the need for crews to work in difficult circumstances. Almost everything on a conventional drilling rig is heavy and hard to move; but with the next generation ADR 500, Ensign personnel can leverage automation to reduce the interface with heavy and dangerous drilling rig components including rill pipe. This technology is really all about increasing efficiency and reducing elements of danger.

ADR equals faster drilling
What of the cost of drilling slowly? How will that affect an operator's total well costs? Well, drilling slowly is a waste of resources and proves to be highly costly. The ADR 500 can help speed up the drilling process, thus increasing efficiency and saving money (that's on top of the increased safety benefits).

"We have been able to create a rig configuration that enables operators to reduce location size, operate more safely and drill faster, which is great not just in terms of cost, but also in terms of the environment."

Oil and gas operators are always looking for ways to reduce the cost and time required to mobilize a rig. The unique design of the new generation rigs will help operators achieve that objective, in part because of the reduced number of loads.

"We significantly reduce drilling time. The industry is demanding services that will enable wells to be drilled faster, without compromising safety. This trend is putting increased pressure on the older equipment, which is costing operators too much money. Operators are now looking for more viable faster drilling equipment" says Matthews.

The industry is starting to see a balance between the demand for and supply of drilling rigs. For the first time in roughly five years, supply is now matching demand. "Because of the once high demand, all kinds of equipment has been brought into service," says Matthews. "To meet the needs of operators, equipment that had been retired has been overhauled and re-commissioned. At this stage of the game though, we will see more of those older rigs being re-retired. The superior equipment will then be that which continues to work."

Despite the leveling out in the industry as a whole, 2007 has been a record breaking year for Ensign. Within the US, around 42 percent of its rigs are on long term contracts, so even though the market in general may be softening a little, the company continues to maintain high utilization and therefore return a profit to its investors.
2008 will bring a new set of challenges, particularly in terms of rigs being taken out of commission. But because of its range of ADR equipment, Ensign will be able to tap into a news market, which are full of potential.

Expanding its territory
Over the next five years, Ensign will continue to grow geographically, expanding its geographic diversity. As a business it currently operates in Canada, the US, Australia, New Zealand, Thailand, Indonesia, Oman, Liberia, Gabon, Argentina and Venezuela.
"We see ourselves expanding further in those areas and also probably expanding our set of services in new ways. We will continue to supply the in-demand services that allow customers to benefit from our 'one-stop shop' approach to the market."

Ensign's international reputation enables it to be flexible and nimble enough to approach new market opportunities when they are available, regardless of where in the world they are. It is currently looking at opportunities in other countries that will enable it to further support its customers.

Secret to success
Although it may sound like a clich

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