Volume 43 Number 7
Striking It Rich Down in the Delta: Following the Rise of Mississippi`s Phoenix E&P Technology
In three short years, Phoenix E&P Technology, of Ellisville, Miss., has gone from a business with revenues of zero to a multi-million dollar operation. Its customer base also expanded from a few oil companies to 150-200 clients, including the City of Houston wastewater program and an increased focused on treating water for small systems. The secret to the company's success is symbolized by its name.
When asked to describe how he came up with the name "Phoenix" for the business, part owner and president David Berneking says, "Everybody looks at their business as rising from the ashes."
Well, there wasn't a fire, but the company's origins do go back to something that burns -- oil.
Tracing its roots
The business now known as Phoenix E&P was founded in 1989 by Houston-based Triton Engineering, a turnkey drilling operation that enjoyed a great deal of success in the oil field business. Still, Triton wasn't happy about performance of its oil field shakers -- devices that filter oil through screens or blades and high-pressure water to improve the crude of the product as well as substantially reducing the level of unwanted contaminants in the oil.
Here's how it works -- the waste comes to the top of the shaker, which is tilted up at 4-to-5 degrees. The linear motion and vibration make solids bounce on the stainless steel screen (similar in design to the screen door of a house). Then, the vibration allows the solids to move up the shaker where a high-pressure burst of water helps to keep the screens clean. The shakers, which Berneking compare to a water softener, use 350 mesh screens that filter most contaminants as well as chlorine and salts down to 40 microns and removes 95 percent of solids, he says.
Triton decided to develop its own shakers. Soon after, the company expanded into the industrial market where it had installations at various chicken, beef and pork processing plants. At around the same time, the city of Tumball (north of Houston) was looking for a way to get rid of grit and floatees in the water before they entered its wastewater system. Tumball looked up Triton and asked what could be done.
First, Triton attempted to install an oil shaker by itself to remove the lime, which causes scale -- but that didn't work because the screens got fouled and needed frequent cleaning. Triton added a water spray that would keep the screens clean without requiring constant supervision and made it almost maintenance free. Other systems with the same technology popped up in Missouri City and neighboring communities around Houston.
In 1996, things began to go south for Triton. Forced to cease operations, it was on the verge of being sued by some of its largest customers -- the processing plants. Noble Drilling bought out Triton. Two years later, Noble decided it was going to shelve the engineering part of the business as well as stop providing shakers for oil drilling in the Houston area.
Seizing the moment
Berneking, 54, and a small group of investors approached Noble in 1998 about purchasing the company. The group planned to buy it and slowly enter the wastewater treatment industry, particularly municipal and small systems markets. Berneking wasn't a stranger to the line of work as he spent 29 years in operations and management for a few oil companies. One was Schlumberger, considered one of the top-grossing oil companies in the world and whose ancillary products include water meter, control and treatment equipment.
Phoenix E&P is based in Ellisville, Miss., near Hattiesburg, where one of the owners lives. But Berneking lives in Houston, where it has a testing area for its technologies as well as a number of customers. The company manufactures its own equipment from Ellisville.
Competition in municipal markets includes manufacturers who offer rotary screens with blades that push solids through screens as opposed to a strong burst of water. Berneking claims Phoenix E&P's use of the spray has been proven by wastewater treatment facilities to be 10 times more effective than blades. The company replaces screens (at $400-$500 apiece) for oil field shakers weekly.
When a wastewater facility is willing to invest $100,000 for a shaker system, it wants to make sure the right choice is made. Because of the high price tag, Berneking says industrial customers like oil fields are able to fit such projects in their budgets. Municipalities are more money-conscious, defer to engineering firms to design the concept and generally carry more red tape, he said. On average, municipalities take 1-1/2 to 2 years before deciding on a water treatment technology.
Berneking says, "It hasn't been easy because this is a new technology (in this field) that works very well. But, we find that municipalities have to insist to engineering firms that they have to put it into their design. They (firms) are not used to trying new things." The shaker system has been used in municipalities for six years, he adds.
In contrast, industrial companies have had access to the technology for over 60 years and usually take three to six months in approving a project, depending on the time of year. As a result, 70 percent of Phoenix E&P's business is industrial.
Still, Phoenix E&P has managed to install its shaker filtration system into municipalities located in Minnesota, Georgia, California and Florida. The company, like its competitors, has manufacturing representatives all over the country. The technology still has its doubting Thomases.
"If you have revolutionary ideas that significantly reduce municipalities' costs, they will start spreading like wild fire," Berneking says. "Anything ground-breaking will initially go through a skepticism stage where people will contend it doesn't work."
Phoenix E&P's largest customer is Houston Metropolitan Wastewater Treatment System with over 4 million users. Houston also accounts for most of its oil field business, but Mississippi is home to some cement companies that use the technology as well. Other applications include restaurants, the paper industry, mining, and meat processing and chemical plants.
It's clear that Berneking eyes other avenues as possible sources of revenue and growth. He says tests are currently being run that would make it easier for the technology to be marketed as a treatment alternative in "smaller subdivisions," which he describes as a few hundred homes. It's estimated that the technology should be ready to enter the new market by year's end. As expected, Berneking is reluctant to tip his hand pertaining to the specifics of the technology, but is confident that it will be a success.
Using the similar electrolytical process used with oil shakers and municipalities, the concept will feature a battery-type operation where waterborne pathogens are greatly reduced. For example, for those on private water, he believes the electrical charge from the battery would allow hardness of well water to be decreased. There are no current plans for the technology to be used at the residential water treatment level, he says. Instead, added emphasis will be placed on subdivisions around the country, municipalities and "every growing community" looking for a chlorine-removing alternative.
With a staff of 10, Phoenix E&P had its best quarter ever in the first three months of 2001. The projection for this year is for a 50 percent increase over 2000.
Berneking still sees a lot more potential out there.
"We are the new kid on the block. We are just the tip of the iceberg of what is out there," he says. "I see the company expanding into other facets of the wastewater industry and trying to be a full-service company. I anticipate in 10 years, we will be 10 times as large as we are now." Phoenix E&P seems primed to rise and take a long-lasting flight.
Part Owner and President: David Berneking
Founded: 1998; a small group of investors bought out Noble Drilling and changed the name to Phoenix E&P
Staff: 10 (one salesperson and nine manufacturing representatives)
Sales: First quarter of 2001 was best ever; projection for 2001 is to have 50 percent increase over last year
Quote: "We are looking at some other technology, which may have a significant impact on and help the water treatment process in municipalities and residents as well with the removal of contaminants and chlorine."