D&L Oil Tools Expands: Doubles Size, Earnings

D&L Oil Tools is in the enviable position of having the time, cash and capacity to expand product lines and move into new areas.
The Tulsa-based manufacturer of downhole oil and gas well tools has been doing business in Tulsa since 1991.
“We are able to go into areas we have never been involved with because we never had the time or the capacity,” said Lee Eslicker, president and founder.
The company has earned a reputation for its quick turnaround on jobs. It is able to exploit the market and create a niche, Eslicker said.
The company is flexible enough to perform special projects that require distinct, non-standard sizes, he said.
“It does not always make a great deal of business sense to do that. But, it has allowed us to bring in business because we are willing to drop things and engineer special products.”
“We will do projects that the larger companies, Baker Tools, Schlumberger, Halliburton, won’t touch because they are too small,” Eslicker said.
Like the rest of the booming oil and natural gas sector, D&L is humming.
D&L, 1915 S. 49th West Ave., has doubled its workforce since 2005, going from 70 employees to nearly 140 today.
The company recently signed a $2.19 million contract with the Oklahoma Quality Jobs Program. Company executives anticipate adding another 100 jobs over the next five years.
“We have completely changed our main management team in the last six to seven months,” he said.
D&L is looking to fill slots for machinists and supervisors. Eslicker has added a materials manager, manufacturing manager and quality assurance manager.
Revenues have stair-stepped upward every year since 2003, when the oil and gas sector began climbing out of its downturn.
Revenues topped $14 million in 2005 and have grown about $10 million a year. This year, Eslicker expects revenues to top $50 million, double the ‘06 figure of $24 million.
Eslicker, like many, is reluctant to discuss trends because he fears losing momentum by mentioning it.
“Do I have to say anything?” he asks, laughing. “I have been doing this long enough that I know it can turn around in an instant.”
Seriously, D&L is at a point where more than half of its business is export, he said. About a third of its products go to Canada. Other customers outside the U.S. operate in Indonesia and South America.
“It has been steadily increasing the past four to five years,” Eslicker said.
Horizontal drilling and enhanced recovery techniques makes an impact on D&L business.
The relationship illustrates another successful facet of the business as D&L sells products to customers and the parts they use in making their own equipment.
“One of our largest customers operates in Canada,” he said. “They buy a lot of equipment we develop, then they use their own tools that we make for them.”
D&L sits on a lot with Darby Equipment. The company builds pipeline bending machines.
“I started doing work for them 10 years ago,” Eslicker said. “This facility became available about eight years ago and it was way too big then.”
Today, D&L, which operates in about 30,000 SF, recently added 7,500 SF and is planning to add another 20,000 SF.
Engineering operates in temporary offices onsite.
D&L is a successor to a family owned oil equipment business founded in the mid-1960s. Eslicker, who has a 30-year career in downhole tools, learned the business from his uncle, Al Kline, and dad, Charles Eslicker. They launched Arrow Oil Tools in 1965. The company made and sold a variety of downhole equipment including oilfield tools, completion equipment and tubing anchors. Lee Eslicker went to work for the company in 1977. Kline retired and sold the company four years later.
After about 10 years and a succession of owners, Arrow was moved to Huntsville, Texas. For several years prior to that and up to the time the company moved, former customers kept approaching Lee Eslicker, urging him to start his own shop.
“Customers were unhappy with the company and its lack of ability to deliver product,” he said.
Today, D&L does what Arrow did 40 years ago.
“It is nothing revolutionary.” Eslicker said. ?

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