Alaska United Drilling.

• Author: Tyson, Ray
• Position: The New Forty-Niners - Company profile

Alaska United Drilling

Among the first to be hired and fired in the volatile oil business, the drilling contractor was on a rollercoaster for much of the tumultuous 1980s. Many were caught holding the bag in 1986 when collapsing oil prices ignited a major economic recession. Alaska United Drilling Inc. managed to survive by staying small and flexible.

"Everybody was building rigs in the early '80s." recalls Alaska United President Robert Mead. "We had our three-to-four rigs and we stuck with them. We did not get overextended at the bank. Right now, we're sitting over here in relatively comfortable condition just by that virtue."

Rather than shell out $15 million to $18 million for a new rig, the North Slope contractor would spend $2 million to $3 million modifying equipment to suit client drilling needs, or bid rates that would generate positive cash flow. Consequently, Alaska united was able to keep its head above water while competing against larger drilling contractors, including rowan, Grace, Nabors, Parker and Pool Arctic.

During the drilling heyday of the early 1980s, as many as 20 drilling rigs were working Slope oil fields. Today, about half that many are working on the average. Lont-term contracts are a thing of the past, and most drilling agreements contain 30-day cancellation clauses.

Says Mead, "We've had a fairly good market share of the operating rigs. Some of that is attributed to being a local company, a Native-owned company, as well as running a good operation. I think the oil companies give us a fair amount of support. We make an effort to spend our money in the community, and we don't do a lot of Outside buying." A joint venture, Alaska united is 40 percent owned by NANA Regional Corp., 30 percent by Veco Inc., 20 percent by Bristol Bay Native Corp., and 10 percent by Sealaska Corp. About 30 percent of the company's 150 employees also are shareholders of the Native corporations.

While Alaska United's operating revenues plummeted from $16.2 million in 1985 to $11.4 million in 1986, they increased to $17.8 million in 1987, to $25.5 million in 1988 and to $26.1 million in 1989 (Doyon's fiscal year 1990 ending March 31, 1990). "We're coming out of the bad times steadily but at a very slow pace," Mead says.

A veteran of the Alaska oil patch, Mead joined Alaska United in July 1986, just months after oil prices collapsed. He holds a degree in petroleum engineering from new Mexico Institute of Mining and Technology. In Alaska, he...