American Oil and Gas Reporter - July 2016 - 49

SpecialReport: Private Equity Strategies
service offering, and Allen Jefferies, a high
school friend of his with manufacturing expertise," says David Nemeskal, the company's CEO.
With backing from a private equity
firm, Epic expanded from plunger lift to
offer gas lift and small wellhead compression, Nemeskal continues. "In addition to
looking for innovation within each of our
product offerings, we think about how they
work together," he says. "In some cases,
it makes sense to install gas lift-assisted
plunger lift or use compression to supplement running a plunger.
"We view ourselves as partners to the
producer with production expertise and a
focus on maximizing our customers' returns on investment," Nemeskal says.
"We are more than happy to look at well
data to see if there are opportunities for
customers to optimize their artificial lift
that deliver meaningful and quick returns, and increase their profitability."
To provide quality consultation and
service, Nemeskal says Epic hires selectively. "We do not hire people who only
know how to sell," he elaborates. "Instead,
we look for individuals with production
experience who understand how to maximize customers' profitability, and know
downhole conditions in their respective areas. Those are the type of people who can
give customers the best advice."
Many of these employees are experienced field technicians or foremen who
have a solid understanding of their customers' goals and challenges, Nemeskal
says. "I tell them to recommend the best
product or service they know, even if it is
not one we offer," he adds. "That might
cost us a sale in the near term, but if we
give honest feedback, producers will trust
our recommendations when we are the
right choice."
Nemeskal points out that the company
designs and builds all of its equipment inhouse. "That is a benefit to our research
and development, because we can test
ideas rapidly," he remarks. "Not all of them
work, but enough do that we feel we have
a bit of an advantage.
"The in-house manufacturing also gives
us greater control over our product quality and helps us ensure we deliver what we
say we will," he adds. "We also are able to
build customer-specific products quickly."
By combining quality products with
honest and accurate advice, Nemeskal says

Epic can unlock huge savings. "Optimizing artificial lift on a single well only may
provide $1,000 a month in increased
profitability to a customer, but if a customer can do that across 50 wells, it becomes $600,000 a year, which is meaningful enough to cover a number of employees' salaries."
Water Infrastructure
WaterBridge Resources formed to improve the economics of oil field water
management, reports Chief Financial Officer Andy Stephens. "In the United
States, there are on average 7-11 barrels
of water produced for every barrel of oil,"
he estimates. "Water sourcing and disposing could be the single largest cost over the
life of a well, so sourcing, transporting,
treating and reinjecting water efficiently
can make a big difference.
"Early in the life of a field, water may
need to be trucked to and from a well site,
but in the long run, pipelines are the way
to go," he says. "The safety, environmental and economic benefits make it a nobrainer to get trucks off the road."
Stephens says a key part of the company's business model is to purchase producers' pipelines and disposal wells. "Many
producers' budgets contain significant
investments in pipelines to move water
from producing sites to disposal systems," he notes. "By taking over their water infrastructure, we hope to enable them
to spend their capital on higher-return activities such as drilling and optimizing in-

cremental oil and gas wells."
Because of its focus on water, Stephens
says WaterBridge will be able to operate
the pipelines more efficiently. "Our goal
is to maximize the efficiency and utilization of the system by sharing it with adjacent acreage holders, much as we would
if we were operating midstream oil and gas
pipelines," he adds.
Sharing capacity on water pipelines
may seem strange to many producers,
Stephens allows. "We expect to spend
much of our time talking with producers
and making the business case for that practice. The traditional approach is analogous
to building and owning a 10-story office
when we will only use the first two floors
for the initial five years," he says.
WaterBridge formed in December and
does not yet operate any infrastructure.
However, Stephens says the company has
the resources and expertise to put the
proof in the pudding. "We have a $200 million private equity commitment and a
great team," he assures. "For example, our
vice president of geosciences, Bill Godsey,
has drilled or participated in more than 200
saltwater disposal systems and made source
water aquifer discoveries all over Texas."
Stephens points out that he and WaterBridge CEO Stephen Johnson worked together at Nabors, where they oversaw a
production and completion business with
27 frac crews, 84 cementing units, 46 wireline units, and 15 coiled tubing packages,
as well as 450 workover rigs and more than
4,000 trucks primarily used to haul water

With help from private equity, Epic Lift Systems reports it has assembled a team of experts in plunger lift, gas lift, and wellhead compression that is responsible for maintaining an ever-evolving portfolio of artificial lift equipment. These experts work with producers to identify wells where optimizing artificial lift can deliver rapid returns on investment.

JULY 2016 49

American Oil and Gas Reporter - July 2016

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