By Joanne Liou, associate editor
Arriving in Alaska in 1971, just three years after the Prudhoe Bay discovery, Trent Latshaw, now president and owner of Latshaw Drilling, had headed northwest from Palestine, Texas, determined to follow his passion for hunting and fishing. His plan was to study wildlife management at the University of Alaska. “I thought, ‘OK. There’s my ticket. I’ll go to Alaska, go to college, hunt and fish and live happily ever after,’” he recalled.
Things did not go quite as planned, as Mr Latshaw found that “the job situation for wildlife management grads left a lot to be desired.” Instead, he found himself at the school library perusing energy industry trade journals, becoming intrigued with drilling rigs. “I was always mechanically inclined and always liked big equipment,” he explained. “Once I discovered that there was a drilling contractor industry, I thought that’s where I want to be. At age 18, I set a goal to have my own business.” By the time he was 20, Mr Latshaw began roughnecking in the summers offshore in Cook Inlet, Alaska. Then, after earning a petroleum engineering degree from Texas A&M University in 1975, he joined Parker Drilling, initially as a roughneck, then as motorman, derrickman and relief driller.
Working his way up, he moved to ARCO Alaska as a drilling engineer and drilling foreman consultant in Cook Inlet and on the North Slope, and just three years out of college, Mr Latshaw quit his job and began to pursue his own business. “I thought I knew everything. I quit working and spent the next two years putting my drilling company together.” To support himself, he became a wellsite consultant for independent oil companies in South Texas and South Louisiana before he founded Latshaw Drilling in 1981, with two newbuild rigs that entered the market in December of that year, at the peak of the rig count.
By 1985, however, dayrates had dropped from $11,000/day to approximately $3,500/day, and Mr Latshaw had returned his two rigs to the bank. From 1985 until 2003, Latshaw Drilling did not operate any rigs and instead focused its business on buying/selling rigs and equipment and acquisitions. From 1985 to 1992, when companies unloaded excess inventories and repossessed rigs, and equipment entered the auction market, “we probably bought $100 million worth of equipment for $5 million. I never knew if the drilling industry was going to be an economically viable business to be in again,” he said.
During this period, Latshaw Drilling experienced its share of setbacks and unsuccessful acquisition attempts that Mr Latshaw credits for expanding his knowledge base. “When I would go to the next deal, I could point to the previous unsuccessful deal that we attempted and the financial backers that I had, so it gave me a lot of credibility,” he said. “Unfortunately, I think so many people tend to think of failures in a negative sense. I look at all my failures as nothing more than great learning experiences.”
It took 20 years for the industry to work through the surplus of equipment that was built in the late ’70s and early ’80s, he said. Then, “in 2003, all of a sudden people were looking for additional rigs. I took one of the rigs we had bought in the downturn, refurbished it, put it to work,” Mr Latshaw recalled. In 2005, the company began to receive long-term contracts and within two years had built 11 new rigs. In October 2012, Latshaw Drilling completed its acquisition of Keen Energy Services, and in just under a decade, “we went from one rig to 41 rigs and the second-largest privately owned contractor (in the US).”
Mr Latshaw believes that although the challenge spurred by a shortage of experienced workers is not as pronounced at his company, training of the workforce is an issue that must be addressed from an industrywide perspective. “Technology is great, and a lot of the big companies pour billions of dollars into research and development,” he said. “From my perspective, what would be just as good is if we invested money into training our people industrywide – more time and effort and money spent on training people. There’s going to be a great loss of talent in the next few years, and it’s not to say our industry can’t handle it, but there is a big gap.”
Mr Latshaw appreciates the opportunity to mentor his employees and to share his business experiences at the rig site. “I enjoy telling the story and explain to them, if somebody like me can do it, there’s no reason why you can’t do it. It doesn’t have to be in the drilling business; it can be anything where your passion is.” After all, Mr Latshaw recalls his first taste of business. When he was 14, he received his first paper route, and at 16, he became his town’s distributer for the Dallas Morning News and was up by 3 am during the week and 2 am on Sundays delivering the newspaper 365 days a year. By the time he entered high school, he was making more money than most of his teachers, he said.
As a member of the Texas A&M Petroleum Engineering Industry Board, Mr Latshaw participates in conversations about significant industry issues, such as the people shortage. “It’s a two-way flow of information. We try to find out what the petroleum engineering department and what their student trends are, as far as enrolling and graduating,” he explained. “The petroleum engineering department tries to learn from us what are the demands the industry is looking for and what can the department do better to serve industry needs.”
While Mr Latshaw continues to hunt and fish, a hobby that has taken him around the world from the Canadian Arctic to Tajikistan in the Middle East, the oil and gas industry also continues to pique his interest after nearly 40 years. “If my health prevails, I can still see myself doing this for another 20 to 25 years.”