A service company in Pennsylvania is bucking the industry trend of falling revenues, cutbacks and gloomy earnings forecasts. Deep Well Services, a private firm based in Zelienople, is on a growth tear. The firm, backed by private equity provider Three Rivers Capital, provides well site services to the Appalachian market. And it is growing strongly. It is expecting to increase its revenues as much as 60% this year over its 2014 total of $27 million.

Indeed, the firm is in the midst of executing an aggressive plan to add additional equipment throughout the year. Currently fielding a workforce of 140, it expects to have as many as 190 employees by year end.

“We have been very fortunate,” says Mark Marmo, CEO.

Deep Well Services was founded in 2008 in Charleston, W. Va. Initially it was a workover rig contractor. After a few years, Deep Well Services married up its workover rigs with snubbing units, and it positioned itself to service the growing number of high-pressure wells being drilled in the region. Its emphasis is bringing first-class equipment and employees to the Marcellus and Utica plays.

The company’s next move was to launch several strategic alliances. “We wanted to expand, but it didn’t make sense for us to buy other companies or more equipment,” says Marmo. “We decided to approach some selected companies about strategic joint ventures.”

Deep Well Services had already established good relationships with its customers, and it was hearing that operators wanted a full-service approach. E&P firms wanted to deal with one vendor instead of many, and they wanted the certainty that the vendors could all work to the high standards that Deep Well Services had already demonstrated.

Deep Well Services, rig, standalone, snubbing unit, shale, Marcellus, Utica

Six strategic alliances were eventually formed with companies that offered complimentary services, from pumps to power swivels to pipe. These allow Deep Well Services to offer package deals to operators, lowering overall costs and adding value. For the alliance partners, these firms were interested in working in Appalachia but they lacked established relationships.

“It’s a win-win for everyone,” says Marmo. “We control what goes out to the sites, make sure the quality is there and that it’s ready when needed. It saves us money and it saves the customer money.”

The approach also simplifies customers’ business. Deep Well Services plans all the vendor relationships, and its customers pay one bill to one vendor. “It is working extremely well,” says Marmo. “In this market, with commodity prices in the tank, it’s one way to show the customer that we are trying to help them.”

Recently, Deep Well Services used this approach on a job for Eclipse Resources Corp. on six wells in Guernsey County, Ohio. Deep Well Services brought in Wellsite Rental Services, one of its alliance partners, to work with it on the project. Louisiana-based Wellsite Rental Services supplied the tubulars and associated handling tools. The firms drilled out multiple frack plugs on a six-well pad with very minimal damage to the tubing connections. In all, 165 plugs were drilled out and production tubing was installed in an average of 2.2 days per well on the pad. “When you snub pipe in the hole, you can damage the pipe. It’s inevitable. But on this job, we only had seven recuts. That’s phenomenal, given the amount of pipe we ran,” he says.

Such results illustrate why the alliances are popular. Deep Well Services currently has eight customers it is working with using strategic alliances, including several of the leading operators in the Marcellus and Utica plays.

“We’ve had two years of solid growth, and we expect that to continue. We continue to gain market share, and our customers tell us they appreciate that we have the best people in the business, and the best technology,” Marmo says.