Share
August 8, 2018 2:00 PM, EDT

Pilot Flying J Expands Into Oil Exploration and Production Business

Pilot tanker truck on the road John Sommers II for Transport Topics

Pilot Flying J is expanding its business portfolio with a move into the water, sand and crude oil-hauling business.

On Aug. 1, the company announced a joint venture with Produced Water Transfer and Complete Vacuum and Rental to create a new company to be called PWT. This new company will focus on saltwater transportation and disposal services to the oil and gas sector.

“I think we’re most known for the retail part of our business,” said Brad Jenkins, Pilot Flying J’s senior vice president of supply and distribution. “We do think this is a growth opportunity as well as a diversification strategy. … We’re looking for ways to diversify Pilot Flying J within the energy space, but you’re not getting too far removed from your core competencies.”

In July, Pilot Flying J through the joint venture purchased two North Texas companies from Ferrellgas Partners LP — Bridger Environmental, a saltwater transportation and disposal operation, and Bridger Transportation, a crude oil transportation business. The transaction will make Pilot Flying J one of the largest third-party crude-hauling fleets, with more than 500 trucks serving the oil and gas industry. The deal also includes 10 saltwater disposal wells and two crude oil pipeline injection terminals in Wyoming.

Bridger tanker

Pilot Flying J bought Bridger Environmental and Bridger Transportation in July. (Bridger)

Knoxville, Tenn.-based Pilot Flying J operates 750 retail travel centers in North America in 44 states and a host of other trucking industry-related businesses, including roadside assistance, tire sales and 72,000 parking spots. It also has the fourth-largest tanker fleet in the United States.

“With Pilot Flying J’s fleet size, safety record, balance sheet and geographic reach across all major oil and gas basins, we’re uniquely positioned to serve this industry,” President Ken Parent said in a statement. “These partnerships are a key driver of our growth strategy and demonstrate the company’s ongoing commitment to diversifying our business.”

It is boom time in the domestic oil industry. According to the U.S. Energy Information Administration report released Aug. 7, crude production is expected to average 11.7 barrels per day in 2019. That is about 1 million more barrels than the nation’s oil fields are averaging now. Pilot Flying J said its new venture will mean at least 200 to 250 new drivers once the venture is up and running.

Pilot Flying J logo

With the trucking industry now short more than 50,000 drivers, according to American Trucking Associations, Pilot Flying J said finding qualified drivers, many of whom are working in the industry for other companies, may prove to be a challenge.

“We read all the articles that are out there … about the driver shortage and how difficult it is,” Jenkins said. “And quite honestly, that is going to be — if not the largest — the top two or three challenges we’ll have with this venture. We will have to be competitive in the market to attract the drivers.”

Financial terms of the agreement were not announced, and no management changes are anticipated.

“We feel really our place at Pilot Flying J and supporting that business is really on the operations side,” Jenkins said. “But the technical business pieces that go with that, and the talent that PWT and Bridger bring, are vital to be successful.”