Energy Services International
Mark Hannigan, CEO of Energy Services International (ESI), has a vision for growing the Texas-based marine and drilling systems provider and he’s not afraid to share it. “We want to be a $100 million company by 2017 and we want to become the world’s leading offshore services provider,” he asserts. “We remove negative thinking from the beginning. Instead, we want to be the market leaders in every region that our customers are present. We’re putting our ambition up there front and center.”
To some, Hannigan’s theory may seem a little bold, but he is sure that the process works, because it has time and time again. “The goal of our investors is to grow industrial engineering companies in the energy sector,” he reveals. “They look for diamonds-in-the-rough so-to-speak; maybe the business doesn’t have the resources or financial ability to get to the next level, which is where they come in.”
ESI’s owner is UK-based industrial investor Clyde Blowers Capital (CBC), which takes up and coming companies under its wing; usually for between five and seven years. “CBC closed a $600 million fund – their third – back in February 2012,” notes Hannigan. “Fund III has currently invested in five platform companies, one of which is our business, ESI.”
According to Hannigan, this is a good fit. “CBC’s model seeks to create value in its businesses through firstly gaining deep market knowledge, hiring and developing motivated people and providing the latest technology and services to its customer base around the world,” he continues. “Before you know it, the business can be growing up to five to 10 times faster than the market, and a lot of it is organic.”
From Mom and Pop Shop to Worldwide Player
ESI is the result of a merger between Southern Technology & Services, formed in 1986, as well as Vicksburg Marine Inc., established in 1992. The two companies joined forces in 2006 to form ESI and CBC acquired the combined company in February 2013.
“With the addition of Benchmark Instrumentation a few months back, ESI now consists of three former, owner-managed, niche oilfield service businesses, which were actually competitors before being brought together under the ESI banner,” explains Hannigan. “By combining these businesses our group can achieve far more than each business could on their own.”
Hannigan and his team are ready to put ESI on the global map. “We’re going to take ESI from a $20 million firm to $100 million in just five years and that’s relatively modest by CBC standards,” he reiterates. “We start with what we call the hard stuff; business development and good practices, planning, budgeting and market analysis and then combine that with the soft stuff; changing the culture, introducing incentive plans for high performance, empowerment, promoting and placing people globally.”
Hannigan’s front and center approach is about sharing the company’s business plan like an open book. “We’re willing to share our plans with everyone who will listen; employees, customers, suppliers, even competitors,” he says. “This is part of building an open, transparent culture. We say, ‘Hey, we’re going to take this market by storm and we want everyone to know it.’ Every single person on the payroll at ESI knows what the game plan is all about and we want everyone involved to have a voice and playing a role in our strategy; that’s empowerment in action.”
To share the information with all parties, Hannigan and his team have developed a story board to outline ESI’s fast track to success, which is posted throughout the company. “The objective is for everyone from the cleaner up to the CEO to understand what we’re trying to achieve,” he adds.
Becoming a Leading Offshore Services Provider
And ESI is on its way to becoming a worldwide leader in offshore services. The company supports jacking, crane and skidding systems on offshore drilling vessels, as well as B.O.P.s, draw works, mud pumps and lift and roll systems. “We’re servicing most of the major equipment on jack-up drilling rigs,” details Hannigan. “There are hundreds of these rigs in oceans all around the world and they’re drilling on behalf of all of the major oil companies.”
Hannigan goes on to note that, to these companies, time is money. “These rigs operate in harsh conditions out at sea and every day,” he says. “If one of them is not drilling, it’s costing them a lot of money. Our area of expertise is maintaining, servicing and keeping these operations up and running for the client so that doesn’t happen.”
Hannigan is confident in ESI’s ability to earn market share in the offshore services market, because he has done his homework. “ESI serves both sides of the operation, both the drilling and the marine, and we know our market inside-out,” he reveals. “We know where every dime is spent and how much each customer is spending per year on this equipment. This is all important in the business plan to ensure we can save our clients’ money.”
According to Hannigan, there are numerous macro-economic factors that make for a viable opportunity in offshore services maintenance and support. “Oil barrel prices remain high and the industry-wide rig fleet is outdated,” he notes. “About 70 percent of jack-up rigs are more than 25 years old and they need a lot of TLC. After some high profile accidents in recent years, safety standards are higher than ever and drilling companies are required to use third-party service providers to demonstrate that they are looking after their equipment. It’s a good market to be in and a great place to invest money right now.”
After just one year into a five-year journey, Hannigan says he’s witnessed dramatic results. “It’s been an incredibly exciting transition and the successful culture change at ESI is what separates us from the crowd,” he adds. “This isn’t business as usual working for a typical large corporation. These people have seen layoffs, wage-cuts and under investment in the past and now we’re turning ESI into an MVP employer they can feel good about.”
With order bookings up 41 percent and revenue up 35 percent on previous years, Hannigan says ESI now has its sights set on operations in the North Sea, Singapore, Brazil and West Coast Africa. After only one year, the company is uniquely positioned to meet the needs of a huge industry. From a next generation jacking system to the remanufacture and recertification of capital drilling equipment, Energy Services International can meet global clients’ needs with industry-leading technology and responsiveness.