Share this post

Contrary to popular belief, the American Dream is far from dead. In fact, Talon/LPE is just one example of a company that began with a dream. Built from the ground up, it has grown into a highly valued provider of customized environmental consulting, engineering, drilling, construction and spill response services.

“When I was 26, I had been working for a firm that went bankrupt,” CEO David Prescott says. “I borrowed $30,000 from my father, and he said, ‘When that’s done, you’re done.’ My previous boss from the company that went bankrupt asked if we could partner up, and everything went forward from there. What started with nothing has grown to a point where we should be at more than $32 million in gross sales this year.” 

Talon/LPE has eight offices in Texas, New Mexico and Oklahoma, employing a staff of engineers, geoscientists, geologists, chemists, biologists and environmental scientists. The company’s roots formed in 1997 as Llano-Permian Environmental, concentrating on environmental consulting. Two years into its existence, the company realized that 70 percent of its subcontracting revenue would be drilling. It subsequently struck a relationship with Talon Drilling, growing over time and adding engineering services and construction to its portfolio. In 2004, the two firms merged to form Talon/LPE. 

Tied Together

Today, the company provides an array of services to the oil and gas industry and includes six distinct business units: environmental consulting, engineering, drilling, spill management, general contracting and construction. Having the capabilities of the various business units provides one of its competitive advantages. Prescott says 90 percent of environmental projects can be completed in-house, which allows Talon/LPE to serve as a one-stop shop for its clients. 

“Of our entire portfolio, the environmental consulting, drilling, engineering and spill management units are very symbiotic,” he says. “They share resources across the board, across states and across different offices. As for the construction unit, it typically provides preventative work or historical work in the E&P industry, while general contracting is really an outlier that grew as a result of installing and building remediation systems.”

The company has invested prudently to ensure it is connected across office lines. It uses Deltek accounting and project management systems, and a VOIP phone system is routed through its San Antonio office. 

Talon/LPE’s approach to capturing new business and building long-lasting client relationships is built on the philosophy that a slow nickel is better than a fast dollar. Prescott says Talon/LPE treats the customer’s money as if it were its own. It can take up to two years to develop a client relationship after the initial contact because the nature of the industry leads to a long sales cycle. 

“This is a relationship-based business,” Prescott stresses. “Our clients look to us for help with non-revenue-producing events, catastrophic losses like a pipeline spill or a system failure. There are penalties involved in those events, and they have our costs on top of that. They need someone taking care of their interests.

“That is what we do by responding with the proper equipment and staff and providing the technical training for our staff members so we can take care of business.” 

Employee retention is one of Talon/LPE’s most pressing concerns. To help its staffers build a career with the company, it has a focus on continuing education through training classes and internal innovations, helping with tuition assistance on advanced degrees as well.

Overcoming Uncertainty

The company also tries to keep its equipment as new and reliable as possible. Right now, there isn’t a lot of money flowing out of the banks to invest in capital equipment, so the company is focused on paying off long-term debt, increasing its balance sheet and making sure all financial ratios are as strong as possible so the company has cash available in case of another large downturn. 

“Compounding that situation is a major drought in our area because 60 percent of our business in our primary service area is based in agriculture,” Prescott says. “We’re not spending a lot of money right now. We have very good sales, but now is not the time to expand and bring on a lot of long-term debt.” 

Talon/LPE is dealing with the vagaries of today’s unpredictable economic cycle like many companies, by looking for opportunities and taking a conservative stance on investment. Prescott says there is room for expansion over the long term, and it has worked across the country at its clients’ request.

“Our clients are always challenging us to help them, and not only in the three states where our offices are,” Prescott says. “We’re taking the projects. For example, we have a long project we’re looking at on Long Island. And in three to five years, there could be some acquisition opportunities of smaller firms that fit the Talon/LPE culture. But for now with capital costs, we’re going to maintain what we’ve got and let the supply lines catch up.”

Prescott knows employee retention will continue to be a challenge because it is difficult for Talon/LPE to compete with major oil and gas companies. Fluctuations in the price of oil and changes in the competitive landscape are also situations the company must keep an eye on, but Prescott believes the entrepreneurial spirit that gave rise to Talon/LPE will continue to fuel its growth in the years ahead.

“We’re blessed with what we have,” he says. “We just have to remain somewhat conservative while maintaining a sense of entrepreneurship in an economic environment that is uncertain.”