Executive Q&A: Patterson-UTI VP of Tech Shares Next Step in ESG Improvements

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Service providers in the oil and gas industry are met with the challenge of staying loyal to their original goals of supplying oil and gas operations while adjusting to the widespread changes the industry is undergoing.

As Houston-based service provider Patterson-UTI evaluates the needs of its customers, it has turned its attention to automated systems and renewable partnerships while never losing sight of its original goals of providing assistance with oil and gas operations.

While remaining dedicated to its drilling solutions, Patterson is implementing environmental solutions to traditional drilling operations. For example, the company’s GenAssist automated generator software has helped operators utilize engine automation to maximize fuel efficiency. In addition, it made an investment in geothermal company Criterion Energy Partners in March to further advance its commitment to renewable energy.

In an exclusive interview with Hart Energy, Katy Holst Dickson, vice president of technology at Patterson-UTI, shared how the company is adapting to the changing needs of the oil and gas industry, from creating award-winning carbon capture technology to reducing energy consumption across each aspect of the work site.

“We are an oil and gas services provider, and we’ll continue to provide those services as our core business,” Dickson said. “We'll still work to understand any other opportunities there may be, while still providing those core services, which is likely to include more projects in the renewable  energy sector.

“There's going to be opportunities in that space moving forward. I think as a company, we're very open to exploring these opportunities with different partners and...really helping them be successful throughout the lifecycle of their projects.”

Hart Energy: What have you been seeing in recent upstream technology trends in terms of drilling innovations, software, etc.?

Dickson: I think that we've seen the same trend to try to automate any sort of repetitive processes for quite a while now. So whether that is automating connection sequences, as you tag bottom or come off bottom, I think that's been in the works for several years. We've seen a lot of organizations collaborate to automate the directional drilling processes that may include automating a conventional slide.

We're seeing more and more companies work on navigation and guidance systems. So having a platform that you're able to upload the entire drilling program, the entire well plan and then have the computer make decisions as it relates to when you should directionally steer, what targets to hold, what length to slide or to directionally drill. That's been ongoing for several years now.

I think probably the last few years, we're seeing more and more interests around ESG technology, specifically, how do we reduce fuel consumption and emissions at the well site. So that's probably a little bit newer, maybe a little bit trendier, and that may come in the form of hardware solutions like battery energy storage systems. More recently, there's been a lot of focus on how to automate engine management systems. How do we actually have the computer decide when to turn engines off and when to start engines to really help reduce fuel consumption and emissions at the rig sites.

Hart Energy: What kind of drilling challenges are you facing in your main basins of operation? What solutions are you using or working toward to overcome them?

Dickson: I think any company would probably say hiring qualified personnel is the greatest challenge in this market. In the last downturn, several individuals left the drilling industry or the oil and gas industry, and we're not seeing a desire to return back to the industry in some cases. There's multiple reasons that may be driving that, but without a doubt, trying to find qualified personnel to meet our operator demands and the number of rigs they want to put up is definitely challenging.

We're really focused on how to drum up as much interest as possible in the recruiting phase. How do we go out into these communities where we work every day and how do we really spread our name? How do we get people to understand what it means to work in the oil and gas industry and really talk more about our company and our culture?

And then once people are onboarded, we're focusing on further developing our training programs. One of our programs is called PTEN Path. The program provides structured on-the-job training modules for each of our rig-based positions. We have mentor programs where we really try to make new employees feel welcome and feel supported. We're really trying to focus on how we set them up for success when they're promoted into that next position.

We now have 120 some rigs operating. Those are all AC rigs in the U.S., and of those rigs, there's always at least four drillers assigned to a rig at any given time. So, now we have 480 drillers, many of whom may have only have been in the position a number of months. We're trying to  train them on how to safely and efficiently operate the rig and manage their crews to create consistent and predictable outcomes for our operators.

If we consider connections as an example, how can we ensure every single time we tag bottom, we do that the exact same way and according to our customer’s procedures? Doing it the right way each time will help preserve the health of downhole tools as well as create efficiency. That's where automation solutions come into play. Rather than trying to train all of those 480 drillers to do things the exact same way, the same sequence and the same timing, we can now just program that into a computer and we can have the computer execute those sequences.

In addition to challenges in recruiting and training personnel, we're seeing technical limits being pushed as operators focus on extended reach laterals. New goals are being set in drilling programs, with some operators drilling to nearly 35,000 feet in total measured depth. I think we've done well to position ourselves to support these drilling programs as we’ve placed a lot of focus on the design of our centerpieces and maximizing our setback capacity. We want to make sure that we can both rack back and walk with over 30,000 ft of five inch or five and a half inch drill pipe on a good portion of our structures.

I think in addition to that, we're seeing more operators really focus on extended reach laterals every single year. We're just seeing new technical limits emerge. We're seeing new goals being set in drilling programs. And so one thing that I think we've done well to position ourselves is really focus on the design of our centerpieces and maximizing our setback. So we want to make sure that we can get to 30,000-plus ft of five-inch drill pipe that we can connect both rack back on our rig structures as well as walk to the next well on a pad location.

So I think from a personnel standpoint, we're looking at training programs and automation, and then just for technical limits being presented with extended reach laterals, we're really trying to get ahead of that and really understand how do we need to invest in our equipment to make sure it fit-for-purpose as possible.

Hart Energy: Do you have any recent drilling case studies you can share?

Dickson: We recently published a case study on our oscillator system that shows how effective it is at transferring weight to bit when we're slide drilling. We also presented two papers at the last IADC/SPE conference. One of them was on our GenAssist technology, an automated engine management program. The paper compared how receptive crews are to the technology when it is rolled out as a fully automated system versus an advisory system. We wanted to understand if drillers would be more bought into a system that provided recommendations with supporting information on fuel consumption and emissions. We have a case study that compares the outcome of those two delivery methods.

We have a third one covering a program we recently rolled out called REX, or Rules Engine Exchange. It allows users to set up an alarm or an alert based on any data that we have in our databases. That can be time series data that streams in real time from the rig control systems and EDR systems, and it can also alert on performance data we store in relational databases. So we do have a case study on a couple of alerts we developed. One of them is around engine management. Another one was around procedural compliance.

Hart Energy: In 2021, you were recognized in Hart Energy’s MEAs for your EcoCell hybrid battery system. Is there anything new in the works to expect from Patterson-UTI in carbon management technology?

Dickson: I think we continue to refine EcoCell technologies in and of itself. I previously talked about extended reach laterals. That means that our equipment will be working harder to reach these new MD’s. And so we're constantly studying load profiles to ensure that it continues to be able to support running three generator on rigs that we wouldn't need to deploy four generators with EcoCell. We're always further refining the system.

In addition, we're about to test what we call Stealth Mode, or grid forming mode. This allows EcoCell to provide power to the rig with zero generators online. And I think we'll be the first company to achieve that; most other systems require at least one generator to be online with a battery energy storage system.

I've talked a lot about GenAssist already, our automated generator software. So I think that's one that we're really trying to push here. We've been doing some testing on injecting hydrogen into the fuel supply for diesel generators to help reduce emissions. I don't know that we see that as a step change; it's not going to move the needle substantially, but any little bit helps at this point. So we are looking at those technologies. We're also seeing significant interest in being able to run rigs on utility power. With our subsidiary Current Power, we're able to both design and build custom transformer skids to support operator needs.

Working hand and hand with Current Power, we can also start looking at how we can package a rig that really maximizes reducing emissions at the rig site while giving our operators needed flexibility in how they want to power the rig. We can do things like install active front end inverters on the drawworks drives, which will allow us to capture the energy that is generated when the drawworks is lowering. We're now able to, rather than burning that off as heat over a resistor, we can feed that back into the utility grid or back into, if we were to install EcoCell as a battery energy storage system, we can actually charge batteries with energy that's being produced through normal drilling operations. So when you start looking at being able to design the entire controls package, and we combine things like active front end inverters with battery energy storage and the ability to tie into the grid, we can really create very custom fit-for-purpose solutions for operators.

Some operators may have limitations on the amount of energy they may be able to consume from an existing utility infrastructure. We can provide a solution that allows them to run on diesel generators in parallel with utility power, reducing their power draw from the grid. Others may have commercial arrangements that require peak shaving. Sometimes utility companies will set different cost schedules based on the maximum amount of power you may consume at a specific time. And it can be a significant increase if you pass a certain threshold, you go into a different cost schedule. And so what we're able to do is provide utility power tie-in with battery energy storage and/or diesel generators, and we can shape those peaks so operators can better manage their costs. So I think we're excited about all the different solutions we can really customize for our operators in that space.

Hart Energy: The company announced an investment in Criterion Energy Partners recently. How do you see the partnership with a geothermal company benefitting your drilling operations? Does it open the gate to more renewable tech or partnerships in the future?

Dickson: We did announce our investment in Criterion. It's very early for us entering the geothermal space, so we're still learning, but we're definitely excited about helping each other really be successful in drilling geothermal wells. I think it's not yet known how large of an industry this may become, how much this may displace other power generation systems. It is our expertise to drill wells so we're able to really help them in making sure they have the right equipment to be successful with whatever well plan or well profile they're outlining. And so it helps to be able to come together at the start of a project, really understand their goals and then help them be successful throughout the entire duration of that project. And we hope that that leads to more projects [and] we'll be able to partner with other operators, other companies in the future.