By: Mark Crawford

September/October 2009

California’s oil patch history runs deep in AESC President Fred Holmes — a third-generation oilman, Fred was born in 1944 and raised on an oil lease 40 miles west of Bakersfield. “You might say I was born into the well service business,” says Fred. “My father, Gordon, operated his own company, Western Well Service, out of our house. He built and ran rigs. The kitchen table was the office. My mother Josephine did all the office work and raised the family.”

Fred spent much of his young life exploring the outdoors. “We lived far outside of town and there were lots of old cars around,” he remembers. “If we got one running we’d drive it for miles on the back roads — we were only 8 or 9 at the time. My father’s well servicing rigs were in the same area. My brothers and I would hang around the doghouse and hear all the stories (including some we probably shouldn’t have heard!). I loved listening to the men. That’s all I wanted to do — work on a rig. My mother said that when I was five I didn’t want to go to school — I just wanted to go to the oilfields.”

As he got a little older, Fred worked as a mechanic on rigs out in the front yard. At age 13 he worked on a pulling crew after school or during summer breaks. That same year he met his future wife Barbara in Maricopa. “This was in eighth grade, when the girls chased the boys,” he muses. “I was the only boy tall enough to be her boyfriend.” Ever since that moment Fred has been a one-woman man. They married two years after high school and lived on the family oil lease.

Fred spent two years in trade school and worked various jobs for Western Well Service, including diesel mechanic, jobs mechanic, truck driver, floorhand, derrickman operator, supervisor, superintendent and manager.

Five years later Fred and Barbara moved to Maricopa. It was a surprisingly hard decision for them, relocating from the country to a town with a population of 800. “We were afraid it would be too busy for us, with too many people,” says Fred.

Eventually Fred bought Western Well Service from his father. The well service business was booming until the consolidation years in the California oil patch, when most of the service work for major oil companies was taken over by alliances with the two biggest well service firms in the region. “This of course limited opportunities for small independent well service companies like ours,” says Fred.

Strategic growth
Turning adversity into opportunity is a Fred Holmes trademark. He responded to this downturn by starting his own drilling business — Western Drilling — to serve independent operators in the Bakersfield area. Western Drilling quickly developed a solid reputation for high-quality work, experienced, safety-conscious workers and the ability to handle increasingly complex regulatory requirements. Within a few years nearly 60 percent of total annual revenues were coming from drilling and 40 percent from well servicing.

To protect his workers from possibly losing their jobs during future downturns, Fred then bought an oil lease and formed Holmes Western Oil Company. “The number-one thing in my book is making sure there is enough work to keep everyone busy,” says Fred. “I realized I couldn’t change the boom/bust nature of the industry, but I could change my company in order to take some of the ups and downs out of the cycle for us and our employees.” During bust cycles, Holmes’ crews drill and pull wells on company-owned leases and contract out during up cycles.

Today Holmes Western Oil Company produces 2,000 bbls/day on its own leases. California oil is very heavy and requires thermal steam flooding to loosen it up and get it to flow out of the reservoir. California’s heavy oilfields have been producing for over 100 years and still have plenty of remaining reserves. Wells are typically shallow and close together, at a spacing of 1/8 acre or less. Using steam flooding adds about an extra $6-$7 to the overall lifting costs.

In April 2008, Fred sold Western Well Service and Western Drilling to Key Energy and retained Holmes Western Oil Company, where he serves as president. The company has 28 leases, 400 wells and drills 20-50 wells per year on known reserves. Holmes is also a vice president with Key Energy.

Different times
“When I first started, performance was everything,” says Fred. “It was always about who could pull a well the fastest. We ran wells wide open back in those days. Every morning it was a horse race — pure competition and performance. It’s different today, of course, with more regulations for safety and the environment.”

Fred has experienced five boom-and-bust cycles during his forty-plus years in the industry. His advice for younger managers? “Always do a high-quality job and stay on top of the regulations,” advises Fred. “And during a boom cycle, don’t fly too high.”

The Holmes family has been part of AESC for nearly half a century. Fred’s father was a charter member of the AOSC California chapter in 1956. Fred, who joined in 1968, has relied on AESC for networking, safety and training materials, and legal/legislative representation for over 30 years. “AESC provides the expertise and tools we need to run our businesses better,” says Fred. “It also gives us a stronger voice when dealing with federal, state or local governments.”

For all his time in the oil industry, Fred has never strayed far from home. “I’ve always been able to work close to home and live only 11 miles from where I grew up,” says Fred. He’s seeing more travel now as president of AESC, flying several times a year to Washington, D.C. to “walk the halls of Congress and talk to everyone we can about the issues affecting our industry,” he says. “One of the biggest problems we face today is excessive regulation, especially in California, the most regulated state in the country. As president of AESC it is my job to help keep our members informed on new rules and regulations, as well as represent them in Washington.”

At age 65, Fred shows no signs of slowing down. He and Barbara have two daughters and six grandchildren. Every morning (for the last 25 years) Fred gets up 5:30 a.m. and has coffee in Maricopa with his brother and three friends. Afterward he drives out to the leases and lets his dogs run before taking them to work, arriving at the office by 7:30 a.m. Every week Fred devotes 1-2 days to AESC business.

“I greatly enjoy the networking, the people, and visiting the different AESC chapter areas in the U.S.,” says Fred. “It is especially hard for small businesses to make their voices heard. They don’t have lobbyists and extra staff to help communicate their concerns. That’s why AESC is here — to stay on top of key issues and bring positive change to our industry.”

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