Niels Versfeld
CEO
Simmons Edeco
/
View from the Top

Preparing Ground for Onshore Drilling

Tue, 01/21/2020 - 17:34

Q: How successful were Simmons Edeco’s drilling operations in Mexico last year?

A: We completed our project on the Tecolutla Block with Tonalli Energía at the end of 2018. This was a critical well for Tonalli, so we were thrilled that the company chose to put such an important well in our hands. The drilling operations were very successful and we are now waiting to see how the well produces for the customer. Simmons Edeco also completed a well for Renaissance Oil and Lukoil located in the Amatitlan Block. As the well was highlighted by various aggregators as one of the world’s top shale exploration wells in 2018, we were extremely proud of our involvement. The results of the well will be useful for the industry in Mexico as decisions on how to move forward with the sustainable development of Mexico’s massive unconventional resources are made.

Q: How does Simmons Edeco see the future of unconventional resources evolving in Mexico?

A: Simmons Edeco supports the development of unconventionals and believes, indeed knows, that the industry, when well regulated, can develop these resources in a safe and sustainable fashion. We feel that the general population often has misinformed opinions regarding the dangers of unconventionals, especially around fracking. If the reality was better understood, unconventionals would be a more attractive proposition. As Simmons Edeco operates smaller rigs, our drilling services are more suited to the shallow end of onshore drilling and so, while unconventionals will become the driver of the industry, they will not drive the near-term results of the company.

Q: Simmons Edeco has opened a new facility in Villahermosa, Tabasco. What other plans does the company have for expansion in Mexico?

A: The potential for Simmons Edeco in Mexico is undoubtedly huge and the opening of our Villahermosa office reflects our commitment to the country. The change in political administration and its distrust of unconventionals has placed a renewed focus on Mexico’s proven conventional resources. This aligns with our company’s current assets and we intend to concentrate on the fields being developed in south Mexico from our new Villahermosa office. We already have an office in Poza Rica that allows us to survey the central region and, if activity picks up as we hope, we may reactivate our facility further north in Reynosa.

Q: What role does local content play in the company’s planned Mexico expansion?

A: Local content is one of the largest value propositions Simmons Edeco brings. In Mexico, we have high-quality certified rigs that are operated by Mexican teams that focus intensely on QHSE and safety programs. Simmons Edeco has embedded itself into Mexican community and there is not a single Canadian expat among our crew. Our current local content rate is 93 percent, which exceeds the minimum requirement. The strong focus on local content goes through to management level and this adds value to our company through skills, experience and connections that our Mexican personnel bring.

Q: Will Simmons Edeco seek to work directly for PEMEX in the future?

A: In Mexico there is often a preference for an integrated development model so Simmons Edeco usually works for an operator that has direct contact with PEMEX. We have worked for Weatherford, Halliburton, and Schlumberger, among many other of the biggest names in the industry. We are proud to have worked with these major players and believe it speaks volumes about the quality Simmons Edeco delivers. We can work within this scheme while working in Mexico because working alongside an operator allows us build relationships with different companies across the value chain. We put a great amount of effort into building relationships throughout the industry during the quiet period because we knew opportunities would arrive soon. Both the natural resources and the need for expansion exist in Mexico. Now, that expansion is beginning to happen.

Simmons Edeco is a Canadian drilling operator that focuses on onshore drilling provision for many of the world’s major operators. The company, which is over 55 years old, has been in Mexico since 2015 and boasts a local content provision of over 90 percent.