Drill bit service caters to boring customers

Phil Castle, The Business Times:

Don’t call this Grand Junction repair facility a two-bit operation. In August, in fact, Halliburton Drill Bits and Services refurbished a record 544 drill bits and sent them to rigs boring oil and natural gas wells throughout the region.

The facility is in business to keep its customers in business. And business these days remains brisk.

The Grand Junction repair facility, the first of its kind for Halliburton outside the corporation’s manufacturing plant in Texas, serves a region that encompasses Colorado, North Dakota, Utah and Wyoming. “It’s a hub,” said Harry Struble Jr., plant manager.

Struble and David Cheatheam, a regional sales manager, led a tour and discussed the operation during an energy briefing organized by the Grand Junction Area Chamber of Commerce.

The Grand Junction facility opened in 2005 with an initial goal of processing 30 drill bits a month, Cheatheam said. Within two years, however, the volume of work exceeded 10 times that amount.

In 2010, the operation moved from a cramped location on Noland Avenue with about 4,500 square feet of space into its present location in the Pyramid Building on Patterson Road with about 10,000 square feet of space.

Relocating into what was formerly a printing plant doubled the drill bit services operation in terms of not only space, but also the equipment used there and staffing, Struble said. About 30 employees work there in addition to a small staff of sales representatives and engineers.

The facility refurbishes what are known in the industry as polycrystalline diamond compact drill bits.

The facility works strictly with bits manufactured by Halliburton, most of which are rented to companies that drill for oil and natural gas.

The bits range in size from under 4 inches in diameter to more than 17 inches in diameter. Larger drill bits weigh more than 1,000 pounds and are worth hundreds of thousands of dollars, Cheatheam said.

Struble said bits arrive at the Grand Junction facility packed in plastic shipping containers. After the bits are removed and cleaned, they’re inspected for cracks as well as wear in the cutters.

Cutters — which resemble black buttons, only thicker — are made with powdered synthetic diamonds bound to a tungsten carbide substrate to form an extremely hard and durable material. Cutters sell for $250 to $400 each.

Struble said some cutters on the bits might remain good for continued use, while other cutters must be rotated or replaced.

Once work on the cutters is complete, drill bits are buffed, inspected again and coated with new paint. “We make it look pretty,” he said.

Struble said refurbished bits must not only function well, but also look good. “Cosmetics is going to get us in the hole. Our technology is going to keep us there,” he said.

Cheatheam said competition in the industry remains fierce with eight companies selling drill bits in Grand Junction alone. “The bit biz is very competitive.

But the Halliburton repair facility is the only one of its kind in Grand Junction, he said. Consequently, the company enjoys an advantage in refurbishing bits quickly and, with its central location in the region, shipping bits at a lower cost.

Booming oil development in the Brakken shale formation in North Dakota accounted for nearly 60 percent of bit service business for the Grand Junction facility in August, Cheatheam said.

But Garfield, Mesa and Rio Blanco counties in Western Colorado accounted for the next largest proportion at more than 12 percent, he said. The remaining business was divided among Eastern Colorado, Utah and Wyoming.

While two shifts of employees now work six days a week at the Halliburton drill bit facility in Grand Junction, there’s a possibility further demand could prompt the need for three shifts working seven days a week, Cheatheam said.

In addition to paying employee wages, the facility also bolsters the Grand Valley economy by purchasing a variety of products and services, mostly from local vendors, he added.


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