Caledyne was set up by three individuals, each of whom had tasted life with a fast-moving, forward-thinking Aberdeen oilfield engineering company that had been eaten up by one of the US big brands.
David Martin, Ewan Sinclair and Mark Murray are heritage Petroline, which was acquired in 1999 by Weatherford. However, the slower pace and more bureaucratic ways of the American company did not suit and, in 2003, they got out, resolving to capture something of the Petroline spirit by setting up Caledyne. They were to be joined a few months later by a Dutchman who had also tasted engineering life in the fast lane. Roland van Dort had worked at Nodeco, a Norwegian company taken over by Weatherford in 1996.
Van Dort told Energy that he, too, was restless. While he had a sizeable job at Weatherford on his home turf, the tall Dutchman hankered for greater freedom and a company with a hunger driven by clever engineers. Having heard about the Aberdeen trio getting out to establish Caledyne, he arranged to meet with them in September, 2003, at Offshore Europe and sound them out.
One thing led to another and the decision was taken to join forces while, at the same time, essentially restarting the clock at Caledyne. Bear in mind, none of the four had left Weatherford with a golden goodbye package. They, including van Dort as MD, basically had their savings and Weatherford share options as capital. That was it – banks, private-equity outfits and private investors were not welcome.
“When we started, I had in my mind that, for the first two years, I would have zero income out of the company,” van Dort told Energy.
“So I needed to have sufficient funds to last for two years … I factored a third year in as a safety barrier … so I had three years of survival.
“After two years I knew I would have a pretty good idea whether this Caledyne thing was going to work and I could either carry on for a further year or bail out.”
When Caledyne was started, there were no products, just some income from consulting engineering and ideas. However, its founders had sufficient capital to underpin early product development, plus they tapped into some industry friendships and were able to get their products licensed out to other service companies – equipment such as downhole valves, for example.
“We developed, owned and licensed out, so we didn’t have to make investment in sales, marketing, business development, and so on,” said van Dort.
“What we were getting out of it was development money and royalty fees, so it was straight cash to the bottom line. That worked pretty well, but it was nowhere near enough to grow.”
The next step was to cultivate the UK’s Industry Technology Facilitator and become part of two joint industry projects – one for metal-to-metal seals. This generated further income and helped make up for the fact that some product development work was not moving as fast as had been hoped for.
“That’s been the Caledyne story for the first three years,” admitted van Dort.
“We can design them, but when it comes to manufacturing, testing, qualification and so forth, one is not talking about £5,000-10,000 any more; it’s several hundred thousand pounds, and that’s a lot of money to produce from your own pocket. But we’ve been determined not to bring in a venture capitalist or other form of investor. Fortunately, we have a pretty good relationship with our bank and, because we own our assets, shareholdings and so forth, the bank was fairly willing to believe in the Caledyne story by providing overdraft facilities.”
As you might expect, the Caledyne team battled on, passing crucial milestones such as ISO accreditation, getting on to approved vendor listings and making sales – not to the North Sea, but elsewhere.
“We were making sales in Europe, North America, Canada, Middle East, but not so much in the North Sea. I think that’s a harder market to get into.
“There was also the matter of competition from other companies that had started at the same time as us and which were running after the same kind of work.
“Rather than fighting them, we decided to look elsewhere. Luckily, I had travelled a lot throughout my career and have a lot of friends and relationships with many operators around the world.”
Fortunately, too, van Dort and his colleagues had left Weatherford on good terms. Just as well as it turned out.
“They were initially miffed that four people had walked out, but then they realised we had a lot of knowledge and we were a good resource. Actually, we started getting quite a lot of work from them.”
That work continues, as does development of Caledyne’s own suite of proprietary tools and systems.
“We’re not a one-trick pony,” insisted van Dort.