Texas tops in crude oil drilling, creating opportunities for local companies
Several Cedar Park and Leander businesses are benefiting from the highest domestic energy production rate since 1995 despite not excavating any crude oil or natural gas.
Instead, these companies are creating the technology and equipment necessary to unearth these natural resources. Their products are being used primarily in Texas, where 30.7 percent of the nation's energy production has occurred so far this year, according to U.S. Energy Information Administration data—tops in the nation and higher than the next four oil-producing states combined.
Texas Gov. Rick Perry personally recognized some of the area businesses that help bolster the state's energy sector, having visited Corvalent in May and Tolteq in October.
"These companies are making a difference around the globe, and we're really proud to have those companies in Texas making an impact, particularly in energy," Perry said Oct. 10 at Tolteq's Cedar Park headquarters. "It's the small-business men and women who are truly the catalysts for this state."
Perry also credited Tolteq President Paul Deere, who helped the company evolve in nine years to become the leading developer of drilling navigation systems ideal for horizontal excavating.
The product line has come in handy, Deere said, allowing more than three-quarters of oil excavation operations to drill horizontally—versus only one-third when Tolteq started, Deere said.
It is a perfect marriage, he said, between technology and energy, one of Texas' oldest business sectors.
"I think these next-generation businesses are the future for the state," Deere said. "And, we have Austin, one of the leading tech hubs in the country, so merging those two together just makes sense."
Success spurs jobs
Tolteq has experienced exponential growth since debuting its product line in 2009, causing the company to relocate last year from Brushy Creek Drive to a new, larger $2 million facility on BMC Drive. That was when Tolteq had 19 employees—there are now 43, bringing the new building near capacity little more than one year after opening.
"We probably won't expand next year," Deere said, despite having 14 acres surrounding the site to someday create a company campus. "My plan is to be as efficient as we can with this building, but we definitely will have plans for the next building by [2013]."
As Deere, a Cedar Park native, steadily grows the Tolteq operation, industrial computer manufacturer Corvalent re-established itself in Texas to take advantage of the state's favorable business climate and proximity to energy production.
The move has paid off so far, President and CEO Ed Trevis said, as Corvalent's business with oil and gas companies makes up 30 percent of Corvalent's clients, compared with just 2 percent to 3 percent before moving from California's Silicon Valley in 2009.
"Honestly, I didn't think we were going to grow in the oil and gas business as much as we did," Trevis said. "[Corvalent's oil drilling clients] like to buy components that are made in the U.S.—and especially made in Texas. They're very patriotic in that perspective and very contrary to other businesses I've worked with."
Trevis' enthusiasm has helped earn him the role as "one of the city's best volunteer marketers" from Phil Brewer, Cedar Park economic development director.
"[Trevis] has really embraced Cedar Park and been very supportive," Brewer said. "All of those [energy] companies, I think, have great potential to continue growing and employing our residents."
Energy jobs not new to area
Brewer credits National Oilwell Varco for first establishing the energy industry base 28 years ago that now exists in Cedar Park. The company is responsible for building components used in land and offshore oil rigs and has more than 1,100 locations throughout the world—including its operation in Cedar Park.
The Cedar Park facility employs roughly 415 manufacturers and engineers to oversee NOV's drilling instrumentation and drilling information systems processes. And as business increases at NOV because of increased energy demand, the duties in Cedar Park have also increased.
"We have increased our manufacturing capacity to handle the needs of not only the business we support with instrumentation but also to support the demand at other NOV divisions who are growing simultaneously," said Trey Mebane, director of business development at NOV's Cedar Park facility.
Other companies such as Flame Technologies, which employs 50 people in Cedar Park, still rely on their core products to capitalize on the recent increase in domestic energy production. President Shawn Toops said the company's welding equipment has been used in oil fields, refineries and storage tanks to help revenue and the number of employees reach points not seen since before the Great Recession.
"Certainly with the uptick in exploration, fracking and new technologies, we benefit by our products being used and consumed for those activities," Toops said. "Any time they're going to put a new well or new rig in, they may be using Flame Tech to put that structure up."
The increase in energy sector business has helped offset lulls in business with other manufacturing clientele, Toops said, helping to ensure Flame Tech continues to maintain its 33-year presence in Cedar Park.
"A community takes a combination of all industries—you need retail, entertainment and obviously industry, too," Toops said. "Having that mix has done Cedar Park well and made this community successful."
