Competing in Oil Exploration
Oil and gas production is a perennial favorite topic in Texas, and now the rest of the country is joining the conversation. Expanded domestic energy production and drilling provoke political debate and influence the lives of Americans daily.
As the spotlight on exploration and production intensifies, so has the competition among energy contractors. Staying ahead in the nearly $4 billion drill bit industry requires non-stop technological innovations to help oil producers lower costs and increase efficiencies.
Relying on the talents of its world-class engineers and designers is a strategy that is holding up to the pressure for one pioneering company, oilfield drill bit manufacturer and supplier, Ulterra Drilling Technologies (Ulterra).
In just four years, this niche provider of global land-based drilling solutions has increased revenues significantly and established a reputation for top-tier, American-made premium roller cone and PDC drill bits.
Right-Sized Excellence
Leading Ulterra’s strong performance is a deep bench of industry veterans, including executives and engineers from Baker Hughes and Smith International. Funded by Cherington Capital, Ulterra was formed in the footprint of RockBit International, which investors acquired in 2005 from Marvin Gearhart.
Representing the energy industry’s best and brightest, Ulterra is purposely smaller than the Big Bit players. Its lean size and depth of intellectual capital are distinct advantages.
“We’re more nimble with less overhead and have a minimal hierarchy, so we can quickly design changes on the fly and customize solutions,” explains Richard “Augi” Flak, Ulterra’s vice president and general manager, Roller Cone Business Unit.
This smart-sized manufacturer serves a wide range of global clients with its PDC and Roller Cone Drill Bits, including such major producers as Chesapeake Energy and Devon Energy.
Custom Innovation
Still, client loyalty is tricky in the drill bit business. Each time a field operator replaces a bit, there’s a wide choice of selection and scant room for second or third chances for poor performing products, according to Flak.
To ensure high product standards, Ulterra works interactively with customers for application-specific customizations. Engineers and designers enjoy a great deal of authority and autonomy to experiment and discover novel approaches and to solve problems.
The results of Ulterra’s scientific freedom include such innovative products as TorkBuster®. A combined effort with United Diamond, TorkBuster® is dramatically improving key oilfield metrics in durability, rate of penetration and cost-per-square-foot for Ulterra’s customers.
“We are always looking for new technology resources to acquire or incorporate. Protecting that intellectual property helps us compete,” says Flak, who chairs the patent committee.
Protect and Prosper
Starting with a handful of patents inherited from its parent company, Ulterra has a thriving IP portfolio today that reflects a dynamic company positioned for market expansion. This intellectual property transformation is an accomplishment the company credits in large measure to their IP legal advisor, Winstead Shareholder Robert Shaddox.
A former engineer working on buildings, bridges, pipelines, overseas housing construction and offshore platforms, Shaddox uses his firsthand knowledge of the energy industry—which includes a summer student job manufacturing drill bits at Hughes Tool Company—to help fortify Ulterra’s patent protections.
As Flak relates, “In the oil patch you’re always discovering a new patent or trying not to violate an existing one.” Collaborating with the new executive team, Shaddox focuses on patent applications, litigation, trademarks and logo protections.
“I use my experience going up against their competitors to address the challenges Ulterra faces. We brainstorm and strategize the areas in which to build patents and extend their advantages,” says Shaddox.
Because patent protection can include litigation for Ulterra, Shaddox also teams with other Winstead shareholders and litigators to manage risk in patent enforcement cases.
Winstead's ability not to “overlawyer” a case and their responsive, innovative approaches synchronize completely with Ulterra’s straightforward, bold and customer-focused style, shares Flak. “Robert and his team are business people themselves and appreciate value. They tell us how to optimize our assets, don’t overcharge us and demonstrate that they are on our team.”
Minute by Minute, Bit by Bit
Accelerated competition in energy production means that Ulterra’s future will remain aligned with invention, adaptation and the protection of its technological advances.
Winstead’s Shaddox believes the company’s deep industry experience will drive his client forward: “By refocusing on quality products they revitalized a brand. Ulterra’s increasing market share speaks to its success in understanding customers.”
For Ulterra, having legal counselors who understand the science, business and laws that govern their industry allows the company to perform at the top of its game. Says Flak, “Our business is minute to minute, so we have to remain ahead of customers’ demands. And we know we can count on Winstead to help us discover the best way to get there.”
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