Trend Services: Keeping Michigan's Oil and Gas Industry On Track

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MEMBERS OF THE TREND SERVICES “FAMILY” pose for a photo at the company’s headquarters in Kalkaska, Mich. Mike Babcock (third from left) has worked for Trend Services or its predecessor companies for more than 40 years and has owned the company since 1994. His daughter, Jill Ponstein (second from left), has been with the company for 12 years. Son-in-law Mike Ponstein (left) has been with Trend for 8 years and Charles Witt has worked for Trend for 29 years.

SCOTT BELLINGER, MICHIGAN OIL AND GAS NEWS

KALKASKA, Mich. — Lifelong Kalkaska, Mich. resident and Trend Services president and owner Mike Babcock has witnessed a lot of change in the more than four decades since oilfield service company Hamilton Enterprises of Odessa, Texas opened up shop at 311 Maple St. in Kalkaska, the location his company ­continues to operate from.

Perhaps best known as the home of the National Trout Festival — which has taken place annually in Kalkaska since the 1930s — the village of Kalkaska and Kalkaska County were forever changed by the discovery of significant reserves of oil and gas in Michigan’s northern Niagaran Reef Trend in the early 1970s.

Prolific Niagaran reef reservoirs would ultimately be found in a broad fairway or “trend” stretching across the northern portion of Michigan’s Lower Peninsula — from Muskegon, Mason and Manistee counties on Lake Michigan to the west all the way to Presque Isle County on Lake Huron to the east.

Oilfield service companies set up operations in towns like Gaylord, Kalkaska, Traverse City and Manistee, and many continue to conduct business in those locations today.

Majors Shell Oil and Amoco Production and a host of independent companies jumped into the play in a big way and both Shell and Amoco would construct gas plants near Kalkaska. The area became an important hub of Niagaran activity, as crude oil and natural gas from up and down the trend moved to the plants on the pipeline system known as the “wetheader.”

“At first the reaction to the [oil and gas] business for a lot of people in Kalkaska was, ‘What’s going on, what’s going to happen,’” Babcock said during a recent interview at his office. He recalls that some people were not so receptive to the changes brought about by an oil and gas boom in their hometown. “But when they realized there were job opportunities, that began to change,” Babcock said. “A lot of young people, like myself, and a lot of families stayed close to home because of the work opportunities that were created.”

Babcock’s comments are supported by U.S. Census data that shows that the population of Kalkaska County not only did not decline, but more than doubled in the decade between 1970 and 1980, from just over 5,200 people to nearly 11,000. The estimated population of the county in 2015 was over 17,000.

In 1972, Hamilton Enterprises of Odessa, Texas, bought the building at 311 Maple St. that at times in its history had housed a livery stable, an automotive repair business and, for a short time, oilfield service company Dowell, Babcock said.

As a service company working in an industry just getting established in the area, Hamilton Enterprises did “most of everything that needed to be done,” Babcock said. The company helped build the Shell gas plant and was engaged in instrumentation and production work. Among the oilfield workers moving from Odessa to Kalkaska with Hamilton Enterprises that ended up staying in Michigan were members of the Roskelly family and Chuck King, well-known names in gas measurement and instrumentation, Babcock said.

Shell Oil’s Ruben Essary also moved from Texas to Michigan to work on the new Niagaran Trend development in the early 1970s. Originally based in Gaylord, he later built a house in Kalkaska, Babcock said. When the owner of Hamilton Enterprises’ Kalkaska operation lost interest in being in Michigan, Essary, who had left Shell and did independent consulting work for a short time, bought the business from him.

Babcock got involved in the business through his acquaintance with the youngest of Essary’s six daughters, Kim, to whom he has been married now for 42 years. He started working at Hamilton Enterprises part-time while going to college. “After a year of college, I found this business was pretty interesting to me, the learning experience was great,” Babcock said. He started working full-time at Hamilton Enterprises in 1975.

In the early 1980s Hamilton Enterprises went through a name change, becoming Petroleum Operations Service Co., or POSCO. Babcock said Essary had a great relationship with the Kostrzewas, independent developer / producers that primarily operated in the Niagaran Trend as Traverse Oil, Traverse Corp. and later Federated Natural Resources. A stock swap deal in the late 1980s saw Federated purchase POSCO from Essary, changing the name to Trend Services. Essary continued to work as a production supervisor for Federated, Babcock said.

When Federated Natural Resources was liquidated in the early 1990s, Babcock said, the Trend Services business entity was sold to Ron Suckle and George Booth of the consulting firm Star, Inc. At that time, Trend Services was involved in operating wells and consulting work, as well as the instrumentation, gas measurement and calibration work the company focuses on today, Babcock said. “The operations work was the game for Star, that was what they were looking for,” Babcock noted.

The northern Michigan Antrim Shale development had shifted into high gear by that time and one of the turning points in the history of Trend Services and its predecessor entities occurred when Trend became a Kimray distributor in 1992, Babcock said.

“Kimray is probably the No. 1 operating control valve out there in the Antrim, due to both availability and price,” Babcock said. He said the momentum that Trend Services had gained from the growing volume of work in the Antrim Shale and the ability to sell and service Kimray products allowed him to purchase Trend Services from Star in 1994 under what he called “great terms.”

“We were in the service sector, doing some roustabouting, doing some instrumentation, doing production work, doing the things we’ve always done. That was the part of Trend that stayed here,” Babcock said. “They (Star) took some of our ­employees and trucks and things and went into well operations.”

Going forward as 100 percent owner of Trend Services, Babcock said the company has made the most of its relationship with Kimray, which he called a “huge asset of our business.”

“Gas measurement is a strong part of our business,” Babcock said. “We’ve been in the chart recorder business and now we’re in the electronics.” Along with their popular valve products, Kimray offered the RTU, or remote terminal unit, which got Trend Services into the business of remote monitoring of wells and production facilities. “Some of the first RTUs that we put out there are still in service. A good 20 years,” Babcock noted.

The concept of what he refers to as infrastructure communications is huge, Babcock said, because with an electronic device out there that is “smart,” you can capture the data relating to pressures, flow rates and production volumes that producer customers want to be able to monitor in real-time. Trend Services currently provides hosting services for more than 20 customers, mostly independents, Babcock said. Reliability of that communications link is important, Babcock said, “because if you lose your communications, you might lose a point of alarm or callout.”

As the Antrim Shale development continues to mature, Babcock said he feels that the Kimray products that his company has been providing for 25 years have helped producers keep their operations economically viable. “It’s a high-quality product at a low price. Every well out there in the Antrim has some kind of Kimray product on it. The Antrim push really put a lot of Kimray product out there for long-term operations. I really believe that it has helped keep the Antrim viable to operate,” Babcock said.

With the focus of most exploration and development work in the state is currently on oil, Trend Services continues to play a role in that activity. “Where there is oil, there is going to be some gas,” Babcock said. Whether or not the produced gas is commercially compressed, Trend provides the tools to accurately measure and help producers allocate sales volumes or report volumes of flared gas, in addition to being able to pick up tank levels of oil for its customers.

Trend Services currently has seven full-time employees, including himself, Babcock said. Charles Witt, is the company’s host manager and handles accounting and inside sales. He has been with Trend for 29 years. Mike Ponstein, who has been with Trend for 8 years, does inside sales work and handles inventory control. Jill Ponstein — who is married to Mike and is also Mike Babcock’s daughter — has been with the company for 12 years and currently works two days a week while she takes care of her children.

Mike Babcock’s brother, Dave Babcock, has worked for the company for many years, in operations, working with wells and measurement and is now a field technician for Trend. John Bevis does valve repair work in the shop, and Josh Hicks and Steve Dipzinski work as field techs, Babcock said. All three have worked for Trend for 15 years or more.

The company’s field technicians are out pretty much every day calibrating equipment for Trend’s customers, Babcock said. Witnessing services are also offered to verify calibrations.

Reflecting on the impact that the oil and gas industry has had on the Kalkaska area since the early 1970s, Babcock commented that some people feel like Kalkaska doesn’t see much of the revenues generated by the industry due to the large amount of state-owned land in Kalkaska County. “But there have definitely been a lot of businesses that create jobs, trucking, services,” he added.

“To say that it hasn’t been an economic benefit, I’d say you’re looking in the wrong direction,” Babcock said. “For me personally, one of the biggest things is that I didn’t have to move to find work. I haven’t had to uproot my business and go someplace else.”

“We raised our family in Kalkaska. We have a great school system here. My wife works at the hospital, that’s an economic boost that is just amazing,” Babcock said. “We’ve been truly blessed to be able to enjoy the fruits of what this has all been for us, I think it has been beneficial to the Kalkaska area in many ways,” he added.

Babcock said that while he grew up in the community and received a good education there, he also places a high value on his strong connection with his church, the Church of Christ. “From an economic standpoint, I’d say that God has been good and has blessed us with being able to be a debt-free company through this downturn, this upheaval.”

“We’ve been able to sustain our business, keeping inventories and not going into debt and having to worry about those things,” Babcock said. “I have great people working for me, and that is a value,” he added. “I know our guys are very faithful men and are very active in their churches and in their communities. I don’t have to be the only one praying for all of this, I know that they do.”

“I don’t have a business degree, serving to help others succeed is what I feel good about,” Babcock said. “Our goal is to help to service people and help keep everybody in business.”

“We’ve seen some bankruptcy here. We’ve been touched by it like everybody else. And we’ve had to swallow some things due to that. But we can sustain it and move forward and not have to look back. There’s some things you can’t do anything about,” Babcock said.

Babcock said he truly appreciates Michigan’s independent producers, many of which are multi-generation family ­businesses. “I’m not a huge risk-taker as a business person, but I sure appreciate those guys doing it. They are looking at a bigger picture. I appreciate their willingness to take a risk. Get investors, invest themselves, drill more wells, that’s the future.”

“You see those rigs running and we see that as the opportunity to put a Kimray valve on it that may be there for 10 to 15 years, maybe more,” Babcock said. “The Niagaran, that was projected to last for maybe 10 to 15 years. We still have a lot of Niagaran wells producing after more than 40 years.”

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