| ENTREPRENEUR OF THE YEAR
`NATIONAL WINNER
`
`Packers Plus
`Energy ServicesInc.
`
`DAN THEMIG, KEN PALTZAT, PETER KRABBEN
`
` being innovative. Andall of a sudden I
`
`With Packers Plus technology,
`the Bakkenoilfield wentfrom
`producing 100 barrelsofoil a
`day in 2006to 60,000 now.
`
`
`
`
`
`INJANUARY2000, Dan Themig, Ken Paltzat and Peter Krab-
`FPM: Whydid you and yourpartners decide to go out on your
`ben abandoned thesecurity of their jobsat oil-services giant Hal-
`own, to start your own business?
`liburton to start their own firm. Based in Calgary, Packers Plus
`THEMIG: Working for a large company has benefits and disad-
`Energy Services Inc. aimed to help the industry tackle the thorni-
`vantages. Most large companies are very rigid, siloed, whereas a
`est, hardest-to-reach deposits. Whena client from Texas presented
`smaller companytypically has morelatitude. When I was with
`the upstart with one such challenge in 2001, Themig
`{energy-services provider] Dresser In-
`used his time on a flight to a meeting to sketch out the
`dustries, it was a big company, but the
`
`idea for what would become Packers’ StackFrac system. > NO, OF EMPLOYEES IN 2000:3|divisions functioned more like small
`The technology unlocks previously unviable deposits,
`> 2009: ABOUT 350
`companies. I had planned to spend my
`maximizing production in mature oilfields and tight rock
`> NO. OF OPERATING
`career with Dresser. What caused the
`formations. Now, with the help of a partmer — interna-
`LOCATIONSIN 2000:1
`three ofus to leave was the mergerof
`tionaloilfield giant Schlumberger — Packers is rapidly
`> LOCATIONSIN 2009:25
`Dresser and Halliburton. All of a sud-
`expanding overseas. Here, founding partner and presi-
`den we moved to a company that was
`dent Dan Themigsharesthe story.
`completely structured. Throughout
`FINANCIAL POST MAGAZINE: What drew youto the oil-
`my career, I’ve always been a bit of a
`and-gas industry? You're a farm kid from southern Illi-
`renegade — looking for new ways to
`nois — notexactly oil country.
`do things — and I’d been rewarded for
`DAN THEMIG: My dad worked for Unocal’s pipeline
`division, but not in exploration. I didn’t know much
`about the oil-and-gas business until I graduated with a civil
`engineering degree from the University ofIllinois and got a job
`at Halliburton. I ended up in Texas for four years, then I talked
`my way into being transferred to Canada.I love to snowboard,
`ski, climb and whitewater-kayak, and they just don’t have many
`mountains in Texas. Also, the Canadianoilfields are known for
`fostering small companies and innovation. Someone once told
`methat at an oil-and-gas conference in Europe, the first thing
`[a presenter] said was, “If the technology isn’t born in Canada or
`Norway,it’s probably not worth talking about.”
`
`was working for a company that didn’t
`want you to do anything other than what you weretasked to do.
`Thatwaslike putting me in a cage and locking the door.
`FPM: Whatwere the early challengesin getting off the ground?
`THEMIG: The whole process wasreally scary. I’d only worked for
`two companies in my whole career. So starting a business of our
`own was like jumping off a cliff and hoping that the parachute
`would work. You're putting everything you haveatrisk. Doing that
`with Ken and Peter was good because I didn’t have all the skill
`sets to build this organization, andneither did Peter nor Ken, but
`together we had a good balance. Thethreeofus have transitioned
`
`42FPM DECEMBER 2009
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`INTERVIEW BY JOANNA PACHNER >PHOTOGRAPHY BY COLIN Way
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`Exhibit 2007
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`44.FPM DECEMBER 2009
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`through a numberofroles at the companysince. I wasn’t president
`when westarted. But we’ve each picked a niche thatfits our skills.
`Becoming a managerwas tricky. I’d spent mycareerin sales, but
`by staying out of management, I watched and studied how others
`managed,andso figured outhow I’dlike to be managed.I want our
`managers to be doers, not controllers. When wehire people into
`managementpositions, thefirst thing we dois removeall their ideas
`about managing, because we don’t want to man-
`age by profit-and-loss statements. We manage by
`operational excellence and innovation. Wereally
`encourage our people to be innovative. I have to
`look on sometimesas peopletry things that] don’t
`think are goodideas, andsay, ‘I gotta let this guy
`try this because he might be on to something, and
`I don’t wantto shut down that commitment.’
`FPM:Did youstart with specific technology ideas,
`or were you just three guys looking to market
`your experierice and enthusiasm?
`THEMIG: We knew what we wanted to do. We
`wanted to innovate and to work in the high end
`of the market. We thought
`that even though our
`re-
`sources were very limited, if
`wefocused, we could become
`world-class at a couple of
`things. In fact, we created the
`StackFrac system because we
`got a request from a Houston
`firm that had heard aboutus.
`We had developed enough
`expertise in two years that
`we'd gained a reputation.
`FPM: How is your company’s solution different from alternatives?
`THEMIG: I can remembertelling my partners when we started, I
`don’t think we'll ever be set up in the U.S., a lot of the plays there
`are exhausted. And I’ve eaten those words a number of times. It
`goes to show that every time the end is near for the oil-and-gas
`industry, it finds new resources or a new wayof extracting old ones.
`And we've been right in the middle of those changes. We have
`four focus areas, and one of them is horizontal open-hole comple-
`tion. We developed a technique of using very inexpensive devices
`to divide up a horizontal well into segments and then individually
`fracture each of those segments. To put it in layman's terms,ifyou
`drill a mile down and a mile horizontally, we developed a way to
`divide that into 20 different segments, and to make each segment
`produce oil or gas.
`The Bakken formation in Saskatchewan really put that to the
`test. It’s a formation that people have drilled through for thelast
`40 yearsbut nobody had been able to make it produce in commer-
`cial volumes. They’d drill a mile through it, produce 30 barrels a
`day for a month,then it would produce five barrels a day, amounts
`that you couldn’t justify pumping. The industry first started to drill
`horizontal holes, which would produce 30 barrels a day long term,
`but these werefairly expensive to drill and weren’t economic at $40
`a barrel. When we came along, someofthefirst wells people tried
`
`us on ended up with initial production of almost 1,000 barrels a
`day. And even though the production would go down somewhat,
`the long-term economics werestill tremendous.
`FPM: Whydid you partner with Schlumberger?
`THEMIG: We formed an agreement with them to representus in-
`ternationally, because the international marketis very difficult for a
`smal] Canadian company. Hereand in the U.S.oil companieswill
`
`
`
`i O
`
`NE OF MY PROFESSORSTOLDME,‘BE
`A SAKS FIFTH AVENUE OR A WAL-MART.
`DON’T GET CAUGHT IN BETWEEN.’
`
`work with a small oil-services company, they’re savvy in deciding
`who’s bestfor a job. Internationally, it’s a differentstory. First, big
`foreign oil companieslike to deal with very large firms and limit
`the number ofcompanies they workwith. Plus there’s an issue with
`having to have agents abroad. Schlumbergeris the largest oil-ser-
`vices company in the world, with offices in every country where
`oil and gas activity exists, Our business volume internationally this
`yearis set to be up 50% by year-end.
`FPM: Your tight focus has been critical in your success. Do you
`think that’s importantforstart-ups in general?
`THEMIG: When I worked in Oklahoma,I picked up an MBA. One
`ofmyprofessors told me, ‘Either be a Saks Fifth Avenue or a Wal-
`Mart, don’t be caught in between.’ I told this to my guys before we
`even started: We’re goingto try to be Saks, The real gut check is
`that you have to be willing to walk away from some work. Early
`on, we had lots of opportunities thrown at us that were attractive,
`because we were short on cash flow and credit. But on thereally
`tough decisions I told my partners, ‘If you find it in the business
`plan, we'll doit. If it’s not there, we’re not.’ When youstart, you
`have very limited resources, so you only havetheability to produce
`10 widgets. If you dilute that by doing things that aren’t in your
`core focus, you'll only do twoorthree ofthe things you intended to
`do. Tolive your vision, you haveto stick to what you planned. FP
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`PHOTOGRAPHYBYNICKWESTOVER
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`2 of 2
`2 of 2
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`eater a tem aT a3)
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`INTERVIEWS
`BY MARK ANDERSON
`
`RyanBeedle
`
`THE BEEDIE GROUP
`
`EOY
`
`SINCE ACQUIRINGthe Beedie Group from his
`father a decade ago, Ryan Beedie has transformed
`the formerly small, but well-regarded, company
`into one of British Columbia’s largest industrial
`real-estate developers,
`increasing revenue by
`more than 500% in the process. Lately, the Beedie
`Group has branched out into Alberta, ex-
`panded into commercial and mixed-use de-
`velopment, and pioneered a numberofenvi-
`ronmentally friendly building practices.
`BUSINESS PHILOSOPHY: Treat everyone
`the same way, regardless of who they are.
`Satisfy and exceed the expectations ofcli-
`ents. There should never be any reserva-
`tions on anyone’s part about doing business with
`us. At the end of the day,it’s about our name, our
`brand and our reputation. Those are our most valuable assets.
`INNOVATION: We don’t believe in conventional wisdom, and we
`don’t acceptthe status quo. Peopletold us we werecrazy to try de-
`veloping industrial strata buildings (multi-tenant warehouse-type
`structures) with units in the 12,000- to 15,000-square-foot range,
`which is approximately 10 times the size of units in traditional
`strata buildings. We went ahead anyway, and the property sold out
`even before construction began. That's innovation on an industrial
`scale, creating a product type that didn’t exist before.
`BIGGEST LESSON: Always keep the middle man happy. Therela-
`tionship with those who bring business to us is of paramount im-
`portance, and we make sure they’re happy with what we're provid-
`ing. It’s all about incentives. ‘Treat people well and give them an
`incentive to want to come back and do business with us again. Be
`the best. Be the experts. Be the go-to guys.
`DARKEST HOUR:Frankly, we haven’t experienced one. Notin my
`memory.I’ve been runningthe business for close to a dozen years,
`and during that time we haven't really had any real down cycles,let
`
`> REVENUE GROWTH:500% OVER
`PAST DECADE
`
`> INNOVATION:
`INDUSTRIAL
`
`STRATA DEVELOPMENTS IN B.C.
`
`
`alone scary times. We’re going through what's supposed to be the
`worst recession in decades, and we've added more square footage
`to our portfolio this year than in any otheryearin ourhistory.
`AVOIDING TRAPS: Sometimes when you’re lookingat a deal, the
`entrepreneurial spirit kicks in and you wantto goafter it. At the
`sametime, though, you don’t wantto take unnecessary risks. You
`have to ask yourself, what are the consequences to the companyif
`the project fails? Deals are seldom as good as they appear on the
`surface, and you have to rememberthatit’s nota sprint, it’s a mara-
`thon. You never wantto risk your foundation.
`PROUDESTACHIEVEMENT: Winningthis award (laughs). Seriously,
`it’s been wonderful to win, and the impactit’s had on our organiza-
`tion and our partners can’t be overstated.
`DEFINITION OF SUCCESS:To me,it’s very personal. Everyone has
`different abilities, skills and desires. You can be successful even if
`you're not makinga lot ofmoney. Ifyou’re achieving personalgoals
`and know you're doing your best, ifyou’re happyand contributing
`to society in some meaningful way, that to meis success.
`
`DECEMBER 2009 FPM45
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