Churchill Drilling Tools of Aberdeen is planning to plough significant investment into growth over the next two years.
Core to the downhole tool rentals business plan is a major overhaul of its workshop complex in Torry, much improved office accommodation and the creation of more jobs to at least keep pace with anticipated growth.
Annual turnover last year was around £4million but marketing director Mike Churchill sees this growing during the current year by as much as 20%, with further robust growth anticipated thereafter.
“We’re expanding not just in the UK but also regionally in the Gulf of Mexico, Middle East and Australasia,” he told Energy.
Twenty per cent of our business is international. That’s going to increase, probably working up to 30-40% . . . 30% within two years I would have thought. A key component because we’re a rental company is service. We use distributors.
“We’re investing in the order of £500,000 to £1million in new inventory annually. A lot of turnover is ploughed back into R&D and to building the tool inventory.”
The company’s premises comprise 18,000sq.ft of linked workshop units acquired over time, some of which is currently leased out. Each unit has workshop space, plus small offices tucked in a corner.
The aim is to clear out the offices to create a more effective space; also install overhead cranes. It will enable the company to better organise and manage its R&D, manufacturing/assembly and rental tool refurbishing.
“Most of the units that we have acquired were being used by various companies requiring small facilities . . . offices and workspace,” said Mike, whose brother Andy founded the firm 16 years ago.
“Once we amalgamated them all, they were no longer quite suitable for our purposes. What we want to do is create large workspaces and separate offices.
“We’re currently restricted for space. We have to do our R&D, assembly and servicing all under one roof. Ideally, each of those activities should have its own space to maximise efficiency.
“We have a growing range of products and each product line will require its own assembly and service lines.”
“We also need a lot more in the way of facilities for staff supporting the manufacturing and servicing, such as design engineers, general administration, human resources, sales and marketing, and they all need their own integrated space, not dotted around what is basically a set of workshops.
“We’re looking at options in Torry so we can move all personnel not needed here into integrated offices.”
The company was set up in 1996 and started trading with its own products in 2002-3, serving the needs of companies like Hess and Shell.
“I’ve been involved since 2004,” said Mike. “My brother, who started the company, is a drilling engineer and was working offshore at the time.
“He started inventing some tools. It was just a two-man operation at a machine shop in Altens and my brother working offshore. I arrived in 2004 and we have worked together to build the business since.”
Churchill currently employs 25 in Aberdeen and this will likely grow to around 35 over the two years.
This is a technology-led company; one that offers a stable of related products, all designed for work in the upper bottom-hole assembly area of wells. The tools are primarily used by drilling engineers.
The current vogue at Churchill is the application of “dart-activated” valves, which are progressively displacing their “ball-activated” equivalents in the marketplace because of inherent advantages, including reliability.
“Users would normally be activating such downhole tools by dropping balls into them. The balls are quite homogeneous in the way they operate. They have a fixed pressure point at which they extrude through the tool and perform,” said Mike.
“By offering dart technology, we’re offering much more variability in terms of the forces that they can exert when the darts are downhole.
“And because of its design and robustness, a dart can fit firmly into place whereas if you drop a ball into a similar tool you have to be more subtle about how you pump it into place in case you pump too hard and it goes straight through.
“Darts have two sheering points whereas balls have one sheering point. That’s the uniqueness of our mechanism.”
Darts have been used for many years downhole and they’re robust. What the Churchill brothers have done is apply them to circulating valves, which is their speciality.
“We make circulating valves. They allow a drilling engineer at certain points in the (drilling) process to stop passing flow through the bit and divert around the outside. That’s what our circulating valve does.
“However, there are other tools that are activated by balls and these tools would benefit from being activated by dart because of the extra performance that they bring.
“We have around 150 tools that are dart-activated. This is a core part of the future of this company. We’re interested in all areas of dart activation and what we can do with other tools.”