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2026.10.05 | TB | Energy | KLX Energy Services: Wireline Competitiveness

原标题：KLX Energy Services – Can a Small Player Compete in Wireline?

#energy

Third Bridge · 2026-10-05

Analyst-led • 28 Sep 2026

Companies: KLXE US

Vadim Fattakhov (VF) Senior Software Engineer at EOG Resources Inc

Peter McNally (PM) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

PM [00:00:02]: Welcome to Third Bridge's Interview entitled KLX Energy Services – Can a Small Player Compete in Wireline? I am Peter McNally, and I will be facilitating today's Interview with Mr Vadim Fattakhov, former Senior Software Wireline Engineer at KLX Energy Services Holdings, Inc.

Vadim, before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

VF [00:00:41]: I agree.

PM [00:00:43]: Could you start by taking a minute or two and telling us a bit more about your background?

VF [00:00:54]: Basically, I've started as initially graduated as a petroleum engineer, and I am originally from… My home country is Kazakhstan and worked in wireline side for about 14-15 years in several different companies, including, we are discussing now, KLX and I worked in Baker Hughes is one of the bigger companies and then several other smaller players and worked across nine different countries, started in Kazakhstan and then worked in the UAE, Australia, Qatar, Oman, Malaysia, I think Scotland also, currently in the United States. Then my current role is I work for EOG as a Senior Software Engineer. Before that, I have been working for KLX as a software and wireline engineer.

Questions

00:02:05] KLX Energy Services is organised into three service groups – drilling, completion and production and intervention. How often does the company provide all three services to the same customer at the same location in sequence?

VF [00:02:25]: I can speak from my own experience, and I worked in KLX on the wireline side of things. Basically, whenever I worked, I almost always have been just alone. Basically, it's us. KLX only provided a single wireline service, and that was pretty much it. I had several occasions when the customer needed something like another pump and they needed another piece of equipment. I had only a couple of jobs where we had been able to introduce several of our services on location. Although I can say to the fact that I worked on KLX and wireline was logging, which is surveying the wells. A little smaller part of my responsibilities were working in the shale unconventional oil and gas wells. Over there, I know that KLX tries to provide at least the package deal, basically wireline plus frac, for example, wireline plus coiled tubing. In my experience, when we were doing logging, I was just by myself, we would just be doing jobs only us, single service.

00:03:59] How differentiated do you think KLX is in terms of technology and capabilities?

VF [00:04:19]: Differentiated. Basically, again, speaking from the wireline side, currently, the market in the US is very competitive. It's so much competitive that the bigger players are actually leaving. I know for a fact that some of the bigger companies, I will not name, but they cannot compete because the prices are very competitive. Because of that, KLX had to be versatile in its services and the pricing.

In terms of technology, most of the players on the wireline side just do plugging and perforating. That's most of the jobs because there are so many unconventional wells here in the United States. Most of the players just do that. When I worked at KLX, we also had basically the… What's it logging department where we were able to provide the services to chemical plants, refineries by surveying the waste disposal wells and also providing leak detection services, which not many companies have, something like pulsed neutron and also doing the jobs for storage caverns. Some of the services were quite unique, providing a nickel cable, for example, for working in H2S. I would say there are some advantage that KLX has on the wireline side, which many small companies don't have.

00:06:28] You mentioned that some of the bigger players are leaving wireline because of price competition. How did that develop? How long do you think this ultra-competitive situation would persist?

VF [00:06:51]: I've started in the US in 2018. Before that, for 10 years, I worked in other countries. I can basically just infer from that time and basically what happened is the companies started providing the services and the skills, which the bigger players would not provide sometimes. Sometimes in smaller companies, the crew members could be jack of all trades. They would do everything. For example, they could be able to drive the truck. They could be able to do certain hands-on responsibilities along with being an engineer, which in the bigger companies, they just had their own responsibilities and wouldn't be able to provide… That was a competitive disadvantage. Smaller companies were always more flexible in their adaptability to this changing market, especially for unconventional oil and gas field. Like I said, when I was there, started in 2018, it was already the case. I cannot tell you when basically it has changed. It's completely different from the rest of the world actually. It's interesting.

00:08:25] You talked about some additional logging services, disposal wells, leak detection, etc. How did KLX develop those capabilities? Who made the decision that we need to provide those services?

VF [00:08:53]: Develop those capabilities is actually what I think is, when I started, it was not initially a KLX company that I started with. We were acquired by KLX several months down the road since I started. The company was called QES, and that's a public information. QES already had these capabilities that extended KLX's abilities on, I cannot say on coiled tubing or frac, but on wireline, it has because if you look at the QES' basically history, it has been a part of the Archer company. Archer is the Norwegian company, and they emphasise a lot, like I said, from overseas. They emphasise a lot on logging and then on having more versatile number of services. In my opinion, initially KLX before acquiring QES, they had less variety of services. Then KLX, when we joined, we started introducing our services into the rest of KLX's customers by doing this.

00:10:19] How would you compare the state of KLX's equipment vs the most sophisticated ones in an average oilfield service company in the industry?

VF [00:10:35]: I can take a two-sided approach comparing basically how much state-of-the-art is equipment of KLX or how good the state of the actual equipment and how much of it is there. In terms of the state-of-the-art, KLX does not make much of its own equipment. Basically, it's just purchasing certain equipment, providing those services. I didn't see much of it like a research and development or something like that. In terms of the amount of equipment and the state of the equipment, from wireline side, at least, I cannot complain because in all the districts I've been to, I've been to Wyoming, Colorado, south Texas, west Texas, I think some other locations, yes, north Texas, there would be more than enough, for example, wireline trucks, whereas you can see in some companies, they would have in their shop two wireline trucks, three wireline trucks. KLX always will have 2-3 spare ones. They would be still investing into improving their equipment.

For example, some wireline trucks would be converted to certain other purposes. I've never seen any shortage of, for example, the regular as simple as those pickup trucks, the oilfield pickup trucks. We would always have pretty much brand-new equipment. That was the state and the actual logging tools, which is one of the most important things. They would still invest in that in repairing and everything because KLX has its own small department where the people actually fix those electronic tools, which is not many smaller companies have, only the big players have that.

PM [00:12:39]: Were those tools fixed in all three regions that the company operates in, or does it have multiple locations to do this? Was it central?

VF [00:12:53]: It's mostly centralised to the location near Fort Worth, Texas. There's a good shop they have there where they're fixing there are knowledgeable people there.

00:13:12] KLX notes that it has 47 wireline units in the completion segment, and it has also split with the production business. What practical impact does the two segments sharing units have on the company in terms of utilisation efficiency?

VF [00:13:41]: I wouldn't say in terms of like if shortage is a concern, like I said earlier, there would be enough trucks purposed for the production part, which I think we're talking about the same thing, they call it a day job. Basically, they are on the call and customers need some jobs done. They quickly on call, they come out, do 3-4 hours and they come back. Then there's another part, which is unconventional where wireline truck can sit for 2-3 weeks and do the job. I've never seen the case where they were having not enough trucks and then they had to repurpose those and they quickly run. There was always enough of equipment and purposed for the correct jobs basically. Yes, 47 trucks, maybe I think that's a correct number.

PM [00:14:42]: That's what they have in the most recent investor deck is what they disclosed.

VF [00:14:50]: Okay.

00:14:55] KLX's revenues are evenly split across three regions – the Rockies, Southwest and Northeast. Which of those regions would stand out to you in terms of growth opportunity?

VF [00:15:20]: The biggest player as it has always been throughout my years since 2018 is obviously Texas. I've started in south Texas, I worked in west Texas. That's where most of the drilling is going on. That's where most of the production is going on. That's where most of the jobs are and that's where most of the attention is concentrated. I'm probably not saying anything new. Midland, west Texas, that is usually something that's been brought up quite often in the conversations and maybe parts of the New Mexico as well. It's basically the same region, which is Permian. I think the second place would be south Texas, which is Eagle Ford. I didn't see KLX doing many jobs there, but when I was in another company, we did a lot of jobs in south Texas in Eagle Ford. That's, I think, the biggest player. I didn't see much optimism in Colorado, DJ Basin to be honest.

00:16:40] What market expansion opportunities beyond the three aforementioned regions do you see for KLX in the US and internationally? Where do you think the business could go in the future?

VF [00:17:09]: Like I said, me working in these many countries. There is a big difference between the market in the United States and the rest of the world because the rest of the world is conventional oil and gas, which is most of them vertical or deviated wells, which are sandstone, limestone with permeability, but these unconventional wells, which you have to frac and the international players, overseas players, they don't have such expertise. Because of that, I can actually talk about other experience I had where one of my ex-colleagues in Australia when I worked in Australia, I worked with him. Then he called me to do the job for them, he's in wireline because nobody in Australia could do this unconventional job. Basically, being efficient at unconventional plug and perf and fracking in the United States is a big advantage to be able to expand into the international markets, which I can talk about Australia was trying to play with this strategy. I know that Middle East is trying to expand their assets with the unconventional oil and gas fields, so looking into those areas and regions. I cannot talk super confidently, but I've heard some companies doing unconventional jobs in Argentina as well. Some of the parts of South America.

00:18:53] Does KLX still have the capability to expand internationally? Do you think the company has the people that could execute on that?

VF [00:19:21]: I do believe so. The required thing is not only equipment, which equipment everybody can buy and KLX always had enough of it. I believe that the people and the expertise is there and to expand that expertise to increase the staff number and go overseas is there actually because, like I said, I worked with people that have decades of experience in oil and gas. They are definitely not new players to this business. I think the capabilities are there.

00:20:13] What types of customers would demand logging capabilities alongside perforating services? What types of wells would this type of work be done on?

VF [00:20:38]: This is quite a broad question because it can depend from situation to situation, from well to well, from customer to customer. Let me just think about several cases. What you usually do is when the well is brand new, the common thing to do would be the cement bond log and then perforate. That could happen on both the new conventional well and the unconventional. Again, KLX could have an edge here for being able to go deep into horizontal wells and into unconventional and run those logs horizontally, which not all the companies can do. Maybe also mostly for conventional wells, I would say, there would be a demand for pulsed neutron service and perforating. It's actually perforating and logging. It's actually for both kinds of wells, but mostly on the unconventional side, you do it at the start of the project and then you just continue perforating. You just do the log and then continue perforating. On vertical wells, it could be mix and match in the conventional wells. There's no one single answer.

00:22:24] You mentioned that KLX can do horizontal logs, which seems unique. What other companies can provide that service?

VF [00:22:47]: In the US, it's interesting that most of the companies are concentrated on this business strategy only. You can see sometimes the expertise of the staff there is only limited to that. I was surprised actually that when I came to US, people only know that. They don't know anything else. They don't know anything else exists out there, to be honest. They only know those horizontal wells. They only know those unconventional, it's not the case of KLX where there's certain shops, certain locations of the KLX, especially the Houston location that are concentrated on more versatile type of services. The answer would be a lot of companies in the US do that.

00:23:42] E&P companies focus on how long it takes to drill a well or how many stages can be completed. How do you think service companies can improve the efficiency of wireline services?

VF [00:24:12]: Basically, what I've noticed since working throughout these years, how the technology kind of changed, it was all about efficiency, all about cutting the costs, cutting the operating time. In particular, for example, if we're talking about unconventional wells, so we're perforating. The perforating systems would improve. For example, before, we would need more people to just assemble the same piece of equipment. Now it's all plug-and-play. Improving the perforating systems, which KLX, I don't think has its own is just purchasing some systems, but those are improving quite a lot. Also, it's very important to have good standard operating procedures. The SOPs, which are very well-communicated to the staff, either through some training, on-site training or video training, which is also pretty important. In terms of efficiencies, another part of a more efficient operation would be for wireline in the unconventional would be greaseless wireline. That's something called coated wireline with the coating on it. This coating allows for less friction in a well and for better pressure control equipment. With the conventional wireline, you need the whole set-up for pressure control equipment, which requires sometimes up to two people to operate it, and sometimes other companies are hired for that.

Right now, what has changed is with this coated wireline, the pressure control system is just limited to one thing called packoff. It's rubber packoff where the same crew, for example, KLX in this case, could just manage with that same person. That's improved a lot. Another thing, when you're fracking those unconventional wells, as it's known, they're fracked in the pads, pads basically four wells at a time, six wells at a time, but when wireline does its job, frack is happening on another job at super high pressures, like 5,000-10,000psi. You are not allowed to approach the well while this is happening. Another thing that was invented is a RigLock. RigLock is the thing that allows to put this wireline on the well or come off the well basically by not coming close by to the well. Another thing in terms of, I guess, more into the conventional world where it's more complicated, it's more surveying, more logging, more data, it's more complicated. Remote logging is a good thing. I know that the big players are doing that worldwide. For example, I'm an engineer. I know this service, I can run it, but there's two jobs at the same time.

I cannot sit at two places at the same time, and I did it in my life several times, not many, but maybe 3-4 times, where my crew members would install everything on location, but I would be remote monitoring and talking to them, like, "Please connect this, please power up, please power down," but I would be controlling the data, acquiring the data, telling what to do for two jobs at the same time. That's, I think, the way to go for the company is repeating those bigger players.

PM [00:28:05]: How frequently are you seeing greaseless wireline or the coating being used today? How penetrated is that?

VF [00:28:29]: In the US, it's everywhere. I was in the forefront, actually. I was in the forefront where we just started. We have made so many mistakes and then the companies that make the greaseless wirelines had their share of issues. I've learned it from our own mistakes. Then like as all the new technology, it got adopted, it got polished. Now on unconventional, not on the conventional side, on unconventional side on plug-and-perf in frack, it's everywhere. In the overseas, as far as I know, it's not everywhere yet. It's almost nowhere. They're still using conventional cables because I think it's not economically feasible to purchase separate wireline trucks, separate cables, separate just to do one well at a time. Right now, they're not doing pads. Maybe they are now, but before they would be doing just one well. They don't want to dedicate the whole set of equipment just for that. They will still be using conventional wireline, but US, it's absolutely… Almost, I'd say 100% is coated wirelines on unconventional side.

PM [00:29:42]: How frequently is remote logging being done in the US, and how widespread is it?

VF [00:30:00]: I think this is a good opportunity because it's not very widespread. Initially, because when you do the jobs on remote location, the first obstacle, the big obstacle would be internet access. In my days in Australia, when I worked in 2014, we would be using a satellite, especially satellite modems, routers, which would cost USD 4 per megabyte. That's insane. Not everybody could afford that, only big players. Now with the invention of Starlink, for example, I don't know how much it costs, like USD 100-200 per month, that's very cheap. That's a good opportunity to have a good engineer that will be able to run several services at the same time, obviously, if there's a demand. I could say that with smaller players, even on KLX side, it happened to me only a couple of times throughout the 5-6 years. The bigger players, they are doing it all the time. That's a good opportunity.

00:31:17] You talked about the number of people on location for some of the services. Over the last few years, have you seen the number of people providing services decrease?

VF [00:31:42]: Yes, yes. Again, speaking to wireline and two sides, which is one conventional, one unconventional. In the unconventional world, like I said, as far as I know, I didn't look at the economics, but I just heard from my colleagues that the margins are very slim there. They're extremely slim because of a lot of expendable costs like labour costs and then the perforating systems, guns, etc, etc. The systems have been improved so much that from when I started, it was one engineer and three crew members, so basically four crew members of our shift, day four people, night four people. Then it dropped because of the gun systems improved, it dropped to two people. Then they also improved the setting tool. When you do plug-and-perf to set the plug, there's another setting tool, which they start creating the disposable ones. Basically, just all you do is connect it and then it's doing its job. I believe right now, sometimes they do jobs with one engineer, one operator. It's just two people. It's pretty much halved from when I've started.

Then on the conventional side, the good improvement of efficiency could be to start running mast trucks instead of the conventional trucks. When you run conventional trucks, you need the truck, then the crane and then there's much more equipment involved. You need at least an engineer and two people or sometimes engineer and three people. When you're doing the job with a mast truck, which it basically incorporates crane into itself, then you don't need so many people. You just need one engineer, one crew member. The only limitation is that when you rig up connect to the well on mast truck, it must be 10 feet away from the well. That's a limitation, but yes, this is the answer.

00:34:05] How are rising costs of raw materials, such as copper, semiconductors and aluminium, impacting the cost of the tools?

VF [00:34:19]: For me, being a field person, I can only speak from my experience that was barely touching this part, but I know from experience of renting the tool and when I was attending the meetings of the purchasing tools. Currently, you can see that there is some delays or we call it lead times up to six months or one year sometimes to just get the parts. That's what influenced. Besides that, another part, if I may talk, not just about the raw materials, but bigger players acquiring smaller players also influences that. For example, again, public information, the one example, Weatherford company, they acquired Probe, and then Probe before that acquired Hunter, that's another company, which would accessibly sell the tools without too much delay. Now it's harder to get tools from them because Weatherford is restricting a lot of things. Some of the tools, they don't even sell anymore. They just rent them. This also factors in. Another thing, if I may say, is the tariffs have influenced. I talked to people overseas and they say, sometimes we can't get parts from US because of the tariffs or we can, but it's more expensive.

PM [00:36:07]: How much more expensive has everything become over the last couple of years?

VF [00:36:18]: I can't talk to the numbers, but I've heard from some of the owners of the companies, they say it's double sometimes.

00:36:29] What type of data is being captured in the US shale wells? How much more information are we getting about wells over the last eight years, for example?

VF [00:37:04]: The unconventional, right?

PM [00:37:07]: Yes.

VF [00:37:10]: The oil field in general, is such field that does not evolve very quickly. In unconventional, especially in terms of acquiring the data, there's not much that you can acquire. All you acquire is how you run in, run out and job notes and the sequence of events. Just going from there, from the sequence of events, you can infer what could be done more efficient, but in terms of surveying the well itself, the data that is acquired from downhole is not very valuable. All it is just a bunch of collocated logs, but how it's changed, I don't think much has changed in terms of that because all this is about efficiently going in and out, shooting and just pulling out, but the data that's acquired, it's just like (audio distorts 38.29) that's all I can say.

00:38:31] How are operators using the data captured from shale wells differently today? How is AI/ML impacting how an operator might use this information?

VF [00:38:54]: In terms of how operator can use this information, I cannot tell you exactly. I can tell you that it is where AI and machine learning can be useful and where it is happening right now. Actually, I have some friends and partners actually, which I talk to are those who interpret the data. For example, the data is acquired on the well. Then the geoscience people, what they do is just they determine on which depth there is oil, where there's gas, which lithology, etc. AI is being increasingly adapted to that to interpret the data to understand those curves and give out the results at lower cost to the customers so that customers will be able to upload the data and not wait two days for the log report to come out, but at least for some preliminary report to come out so that AI could interpret that. That, I think, in my opinion, is the opportunity for the space to use the AI and machine learning.

00:40:17] How is well analysis split across the service companies and their customers, such as E&P players or the oil majors? Have you seen any shifts there?

VF [00:40:32]: I think that what happens is those companies that want to be more efficient, they have their own, the operator companies, they have their own staff who analyse the data because outsourcing that to service companies would be an extra cost. Sometimes what happens, and I think it's increasingly happening right now, which is the service companies, they acquire the data, then just give it to the customer and the operator company, most of the times, they have their own staff that analyses that data. It's only the smaller players that don't have those full-times or contractors, employees who can do that. They actually purchase both the data and the analysis, but the bigger players, they have their own analysts.

00:41:54] How is the upstream consolidation of customers impacting the service industry?

VF [00:42:13]: Let me think. I can only speculate on this matter because I don't know the global general trends on that, but the consolidation usually means for the service companies, it's usually more competition. For example, if we take a case of Aramco, that's the case of not having any competition, it's pretty much monopoly inside the country. The good thing is that there is a lot of work, but the bad thing is that you always have to please that same customer. For service companies, by not having a bigger variety of the customers, by just having one, I think it's coming down to more risk. If you lose that one customer, you lose a bigger chunk of your job. If you're in Saudi, if you lose Aramco, that's it. There's no more job for you. For service companies, I don't think it's a good trend.

00:43:34] We're seeing longer laterals being drilled. What are the limits that you see? How much further could we push the lateral lengths that the upstream industry is drilling in the US?

VF [00:44:17]: In the US, right now, the industry is actually pushing the limits, and the rest of the world is so much behind. What I'm seeing is that those U-shaped wells are increasingly more exploited or horseshoe shaped wells and then more horizontal, basically longer horizontal laterals. This is limited by the capability of technology. For example, can you drill so long with such drill string? It's hard for me to talk on this aspect. On the wireline side, this has been solved by adding the greaseless coated wireline, which significantly reduced the friction and that was much easier to pump it down the ground stream towards 30,000 feet or 35,000 feet sometimes. I don't know where the limit is, to be honest, but the improvements are happening, and it all depends on the capability of that one chain. Then there's a lot of moving parts that are included in the construction of the well, which it could be a limitation of the drill string, if you can drill so far or it could be the casing. Can you run the casing so deep? Can you run the completion so deep? On the wireline side, I know that they solved it by using the coated wireline, but the rest, just hard for me to say. I know wireline can go deeper.

00:46:16] Oil prices jumped meaningfully in 2026 due to the Middle East conflict, and the US rig count has started to increase. What type of response in oil production do you think we can see in the US going forwards?

VF [00:46:37]: I think that US is quite flexible. It is quite flexible in the sense that when I worked in the wireline, there was no contracts. You can be a run off location if you don't have a service good enough, and another competitor will be called. That flexibility provides a lot of ability to change, and I have seen ups and downs, and the US is able to upscale quite quickly, hire people, expand the number of equipment, and the lag wasn't too big. Even if the lag was there, I know that people are ready to work longer shifts and whatever it takes. US in this regard is flexible. Also interestingly, when I worked in Australia, you couldn't push certain limits because of certain stricter regulations etc, but in US, it was more flexible. Efficiency is definitely there. The fact that a lot of the things that US… That are produced for… The equipment that is produced for oil and gas are produced by United States. I think that's a great advantage. I think we can see the quite big expansion pretty quickly. My belief is that this conflict doesn't look like it's short-lived. It's going to be a long-lasting thing. That works in favour of the United States. I believe that… Yes.

00:48:31] During the 2022 oil price spike, the US oilfield services industry struggled as the supply chain was difficult. It wasn't just the oilfield services industry. Do you think the US oilfield services industry is ready today? What bottlenecks might emerge as activity starts to increase?

VF [00:49:08]: I think some of the aspects of the oilfield supply chain are probably not still there compared to pre-COVID. Because of some tensions, I think, between US and some other countries, which are providing certain commodities, it is harder to get some of those elements and because that produce certain equipment, and because of that, again, speaking on the wireline side, there was a lag. There was a delay, quite large delay not only by the accumulation of the bigger players acquiring smaller ones, but also because of not having enough access to the commodities. For example, a small example I have, which is pressure control equipment for wireline. I know one manufacturer, I actually talked to quite a lot of wireline companies because I have my own small wireline company, which I just teach wireline engineers, basically, I have online courses. I talked to people and they said, "We don't have the access to certain materials, which would allow us to build lightweight pressure control equipment." Because of that, there could be a lag because that country, which is one of the friendly countries in Europe wouldn't sell it to them because there was not enough of that commodity. I guess the tensions in the world where those certain commodities are involved, those would still keep that lag and the delays in the supply.

PM [00:51:15]: All right. We'll end it here. I want to thank you for all of your insights.

VF [00:51:50]: All right. Thank you.

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