Wellco provides services for companies with remote drilling locations, providing clean water, food and other basic needs.

With an array of oilfield services, Wellco Energy Services Trust serves customers in the oil and natural gas industries throughout western Canada. Its services include accommodations and catering for drilling crews, and drilling services such as wastewater treatment systems. The company's production services division provides production testing as well as completion, work-over and abandonment services.

According to President and CEO Ken Bagan, Wellco's wastewater business is the one in which it boasts its largest marketshare.

"Wellco has offered wastewater services for a long time, but in 2004, we introduced a new style of wastewater treatment system, which employs microfilters," he says. "We have built up our fleet of portable wastewater treatment plants from three to five to our current fleet of 235. These are deployed in northeastern British Columbia and northern Alberta."

He says the company's wastewater marketshare is 75 to 80 percent in British Columbia and approximately 60 percent in Alberta. The systems transform sewage into clean effluent, which can be discharged into the watershed. "Our effluent exceeds regulatory requirements for all of the measures, such as suspended solids and, to a much greater degree, than technologies employed by our competitors.

"The systems are sized in terms of the number of persons they will deal with", he says. "Therefore, we can handle the daily requirements of as few as 10 persons up to configurations that will deal with several hundred people.

"Wellco has developed this new technology from scratch. We introduced this particular type of wastewater treatment in western Canada, and we have an exclusive supply agreement with the supplier for the oilfield in western Canada."

The company supplies these units to exploration and development companies that operate camps in the oilfield. "These are generally drilling locations or other remote locations where crews are drilling or building pipelines or any sort of oilfield activity," Bagan says.

Camp and Catering
Wellco's camp and catering services also serve companies with operations in remote locations. Bagan says most competitors offer camp or catering services, but not usually both. The company currently operates 74 camps of various sizes throughout northern Alberta and northeastern British Columbia. These camps house between 10 and 100 people at each location.

"Our camps are generally set up for a relatively short period of time," Bagan says. "A short setup might be a week or two, medium setup might be a month to three months, and a long one would be six to 10 months."

Wellco provides all services in the camp such as wastewater treatment, power and catering. Food is prepared by Wellco employees. Many camps also include recreational facilities with a recreational room, satellite TV and a gym. "The newest ones have individual rooms with satellite TV and Internet access in each room," he says.

Crews usually consist of three people - a cook, second cook and a camp attendant who handles cleaning and general services. "There are also a number of other people who get involved," Bagan says. "We have maintenance people who go out to the location to maintain the generators and wastewater facilities.

"We have an operation that delivers groceries weekly and supervisors who go out to check on the operation," he adds.

"We provide excellent service," he says. "I think we are one of the few that offer a complete well-site accommodation service. We have camp, catering, wastewater, power generation, potable water and garbage bins.

"Fifty people living in a camp can generate a lot of refuse, so we offer that service as part of an integrated package."

Mission and Values
In all, Wellco employs 700 people in the peak winter season and as few as 400 in the summer.
"We have a value-based culture," Bagan says. Its four values are:
· Expertise - "We seek to become significant enough in size in each of our product lines so that we can develop real expertise in delivery of service and design of product."
· Excellence - "We pride ourselves on positive feedback from clients regarding our service."
· Safety - "We use the term ‚Äòculture of safety' quite deliberately. "We try to make the notion of safety an integral part of everything we do."
· Respectful workplace - "Part of what we stress around here is that people treat each other with respect in the way they communicate. We have respect for contributions at all levels and devote time to feedback."

Bagan says the company recently completed an internal employee satisfaction survey and found its four values are well-understood within the organization.

"Most people feel that their experience here actually reflects those values," he says. Wellco's mission, he says, is to make people comfortable.

"They are living out in the cold, so we try to provide them with food that's healthy and tasty, and living accommodations that make the stay away from family and home less of a hardship," he explains.

"We spend a lot of time training our people to make sure the service we deliver is excellent."

Industry Trends Bagan says the oilfield industry is slowing down a bit as a result of falling prices. "There is a lot of chatter about natural gas prices, more than oil prices," he explains. "Natural gas has come off a high of $14 down into $6 or $7. This industry is driven significantly by commodity prices.

"If the commodity price is off, there are lower activity levels. We are going into 2007 with a slowdown in activity, but we expect we'll start to come out of that in mid- to late-2007."

Market Focus Wellco is focused on the Canadian market. As a public trust, Bagan explains, the company will be affected by a recent change in Canadian tax rules.

"This is creating an impetus for change in the structure," he says. "Over the next four years, we'll have to change our structure. The purpose of this legislation was to put an end to the trust as a corporate structure." Under the new legislation, existing trusts will have to begin paying corporate taxes in 2011. Currently, the company says, Canadian trusts don't pay corporate taxes and, instead, pay stockholders who pay taxes at individual rates.

Management Commitment Wellco says its management is committed to reaching the goals set in its health, safety and environment (HSE) policies.

"A structured HSE program must be implemented and practiced on a daily basis," the company states.

"The overall goal of Wellco is to implement a program that will reduce the frequency and severity of workplace accidents/injuries by fostering a proactive safety attitude, educating employees in their job tasks and by controlling clear, specific HSE goals.

"Goals should give a clear understanding of what is expected, shall be realistic and measurable." Wellco says it annually reviews and revises the components of the HSE program for effectiveness and implementation.

"Information will be solicited from management, supervisors, workers and contractors to determine the effectiveness of each program component and to assist in developing adjustments and corrections," the company says.

Responsibilities and Guidelines
To ensure practice matches policy at Wellco, the company says, it annually updates a comprehensive handbook that sets out in detail all of the responsibilities of management, employees, contractors and visitors to company facilities.

"The handbook - which all employees and contractors must read and sign - is a virtual contract, binding every Wellco representative to the very high standards, rules and procedures envisioned by our company's policy and commitments," Wellco says. The Wellco HSE handbook also provides instructions to guide employees and contractors in day-to-day operations, covering a wide range of activities and situations.

Special Certifications Wellco says the oilfield services industry and the regulations "that guide us mandate a number of certifications to ensure companies operate in a safe and responsible manner." But, it says, the company's commitment doesn't stop there. "In fact, we go well beyond mandates, striving to exceed the expectations of regulators, employees and the public," it notes.

"Wellco has been recognized by the province of Alberta's Partnerships in Health and Safety Certificate of Recognition program and is certified by provincial regulators based on their evaluations of our health and safety management programs." E+P