Volume 2, Issue 3

"How Do They Do It?" to Feature Varel's PDC Design and Manufacturing Process

The Science Channel, part of the Discovery Communications Network, will premier Episode 8 of "How Do They Do It?" Thursday, August 27th at 8 pm Central Time. This episode includes a segment dedicated to drilling for oil and natural gas in which Varel's PDC design process and Houston manufacturing facility is featured.

Varel International Energy Services Named to 2009 Inc. 5000 List

Inc. magazine unveiled its 2009 list of the fastest-growing private companies in the country, listing Varel International Energy Services as number 1,903. This is the second year in a row Varel has made the list, moving up from last year's 2,445 ranking. The annual list also recognizes Varel as 70th on its ranking of the 100 fastest-growing private companies in the Dallas/Fort Worth/Arlington area.

In addition, the company was recognized as the 56th fastest growing company in the Energy Industry designation on the list.

"To be recognized for the second year as one of the fastest growing private companies is quite an honor," said Jim Nixon, Varel CEO and president. "Our growth can be attributed to our focus on technology leadership, quality manufacturing and our exceptionally talented people."

Varel was selected based on its revenue growth from 2005 to 2008. In the three-year period, the company grew from $103.3 million in revenue to $276 million — a revenue growth of more than 165 percent.

Nixon added, "Our continuous growth over the past three years emphasizes the commitment of the entire Varel team. This growth could not have been realized without the support of our investors; they have recognized the opportunities Varel has had to grow and supported our plans."

To read more about this accomplishment, visit our News and Events page on www.varelintl.com.

Performance Update - Reaching Kick-Off Point with Single Bit in the Barnett Shale

Varel has introduced a new seven-blade Diamond Edge PDC drill bit for operations in the Barnett Shale. The bit, a DE713P2UX, was initially developed for an independent operator whose goal was to reach the kick-off point (KOP) without a bit trip.

Challenge: To design a drill bit capable of drilling to KOP using one bit, while maintaining a cost saving rate of penetration (ROP). The six-blade double-row bits being used in the area generated high levels of initial ROP, but lacked the durability to sustain the necessary ROP and steerabilty required by the operator to keep the bit in the hole in the deeper reaches of the well.

Solution: Varel field engineers interfaced with designers to create a bit capable of building and holding tangent, while maintaining the penetration rates desired by the operator. The solution was a seven-blade, partial double-row PDC bit that was also equipped with strategically placed shock studs in key areas of the bit. These features combine to enhance durability and improve and maintain stearability even on the longest, most demanding wells. Varel engineers utilized their design software to create a seven-blade cutting structure that maintained top hole ROP, drilled significantly farther and frequently delivered a higher average ROP than its six-blade counterparts. The addition of the shock studs also allowed for better directional responsiveness, and reduced the amount of sliding required to maintain long runs in a tangent section; even as high as 30 degrees or more.

Results: The DE713P2UX was successfully used to drill the entire 8 3/4" hole down to KOP with only one bit, making it the only bit design to accomplish this feat in this field. The bit maintained a ROP of 65.1 ft/hr, with an improvement in both footage drilled and ROP when compared to competitive bit runs in the area. An additional run confirmed these results with the bit again reaching KOP with an average ROP of 63.2 ft/hr.

For more information on this series, visit http://www.varelintl.com/Oil_and_Gas_Home/PDC_Drill_Bits/Diamond_Edge_Bits/

Downhole Products and Varel International to Exhibit at SPE Offshore Europe in Aberdeen

Downhole Products and Varel will showcase our array of products at Booth 127 at the upcoming SPE Offshore Europe Oil and Gas Conference and Exhibition. The conference will take place at the Aberdeen Exhibition & Conference Centre, Sept. 8-11, 2009, and according to the SPE is set to be the largest in the event's history.

Come meet our technical experts to learn more about the specific solutions and products we offer that best meet your drilling and completions goals.

Varel International Expands Sales and Service in Rocky Mountain Region

Varel recently opened a new regional sales office and polycrystalline diamond compact (PDC) drill bit service center dedicated to the Rocky Mountain Region of the United States. The sales and service center is located in Denver, Colo. The new office houses field engineers and technical sales personnel assigned to operations in the region. The facility also includes 3,000 square feet of floor space for the PDC service center. The center has the capacity to service up to 350 PDC drill bits a month and is fully equipped with state-of-the art equipment and trained personnel to ensure quality and efficiency.

Jim Dahlem, regional manager — Rockies Region, explained the benefits of the new facility, pointing out the improved response time for Varel customers: "Once a bit is run, it can be quickly returned to Denver for evaluation and service. This also allows a swifter flow of information to our customers as to any issues relating to the operating practices or bit design that may affect bit performance."

The location of the facility enables Varel to service a product and return it to the field in just days. As a result of the reduced service time, we're better able to manage our fleet of bits, improving availability to customers.

"There is also a great benefit derived in all employees being able to see and evaluate each bit after its run," said William Burton, vice president — Western Hemisphere. "Technical sales personnel are able to better understand the drilling conditions and keep our customers more informed about the bit's performance since they can be present to evaluate its condition prior to servicing. It also enables field personnel and service center staff an opportunity to develop new solutions together."

Varel also contributed to the December edition of JPT, the official publication of the Society of Petroleum Engineers, providing photography for an article on the history of PDC.

"(The sales and service center) enables field personnel and service center staff an opportunity to develop new solutions together."

In addition to the location of the sales and service center creating efficiencies, the service floor itself also contributes to organizational excellence. Flow on the floor was arranged adhering to lean principles with product following through production as efficiently as possible. This assists with reduced cycle time.

Varel International also operates PDC service centers in Houston, Texas; Carrollton, Texas; Edmonton, AB Canada; and Tarbes, France.

Downhole Products Announces GRIPPY Milestone

Downhole Products announces that it has deployed more than 250,000 units of its highly successful GRIPPY cable protector assemblies in less than two years.

Introduced in September 2007, the cable protectors secure downhole cables and control lines while providing over-the-coupling protection in and out of the wellbore. The assemblies also eliminate compression induced damages to sensitive cables.

Product Manager Gina Taylor attributes reaching this milestone to successful application of the product in demanding environments and the unique design of the tool.

"DHP simply provides the best-in-class product. When operating in heavy weight applications, such as supporting electric submersible pump cables, it is imperative that cable protectors be able to sustain the load to prevent the cables from sagging," Taylor said. "The GRIPPY can withstand these extreme loads and has proven successful in virtually every application to which it has been applied. We've addressed all issues related to traditional clamping and built a more robust tool which is delivered efficiently and effectively without compromising reliability or quality."

GRIPPY products are configured for both round and flat electric submersible pump cables, subsurface safety valves, chemical injection lines, smart well total encapsulated cables and fiber optics with single and dual channel options.

Other features of the product line are:

  • Galvanized protection to resist corrosion
  • Spot-welded hinge pins and seams for enhanced integrity of the assembly
  • Provides standoff between tubing and casing
  • Resists slipping and rotation
  • Provides eight specific contact points to firmly engage tubing and secure cable
  • Pneumatic/hydraulic and mechanical tools available for choice of installation

Assemblies are available in sizes ranging from 2-3/8" to 7". Alternative designs and materials are available for a range of configurations. For more information, visit www.downhole.org.

Varel International Expands Manufacturing Center in Matamoros

Varel International has expanded our current roller cone manufacturing facility in Matamoros, Mexico, through the addition of a new state-of-the-art tungsten carbide insert production facility.

The new facility produces high-quality sintered hot isostatic press parts using ready-to-press tungsten carbide powders blended to Varel's specifications. The new facility is also able to process parts using our patented High Energy Tumbling™ (HET) procedure, which has been proven to increase both the wear resistance and toughness of tungsten carbide inserts.

Varel Roller Cone Vice President Chris Byrd said the expansion is a perfect fit for the thriving Matamoros facility.

"Varel has been operating in Matamoros for more than 30 years. As one of the leading employers in the area, we benefit from the highly skilled and experienced employees who already produce reliable products," Byrd said. "We have made great strides in creating efficiencies and maintaining quality in our Matamoros facility. The integration of the tungsten carbide production facility into the roller cone manufacturing plant is the next logical step in the implementation of world class lean manufacturing, which we began at Varel in 2005."

The new production capability inside the existing facility has led to reduced lead times in roller cone production by approximately 100 percent. The Matamoros location boasts a 50 percent increase in maximum production capacity compared to the previous carbide insert production facility. The installation also includes a full tooling production shop allowing the company to fabricate and produce components for new designs more quickly than previous methods.

Inserts produced by this facility are for use in tungsten carbide insert roller cone bits, which are designed and manufactured by Varel for the oil and gas and the mining and industrial markets.

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