Gold strike: Bosque owner finds success in oil and gas water services marketJuly 21, 2014
Photo by Alyson Peyton Perkins
A. Lee Graham
To Clane LaCrosse, water is more than what pours from a faucet.
It’s the lifeblood of a multibillion-dollar oil and natural gas industry seeking ways to reuse and recycle the water needed to reach subterranean energy deposits.
LaCrosse foresaw that challenge years ago. With environmental responsibility and ecological stewardship gaining notice, the Dallas executive put two and two together and saw an eventual impact on oil and gas producers.
“It’s a big part of fracking,” said LaCrosse, 42, president, founder and CEO of Bosque Systems LLC, referring to fracked wells. The Fort Worth firm provides water management services to oil and natural gas operators. His firm advocates recycling the flowback and produced water so that it may be used repeatedly.
That focus recently vaulted LaCrosse to industry prominence as he won the Southwest Regional Entrepreneur of the Year in the Cleantech category as part of Ernst & Young’s EY Entrepreneur of the Year 2014.
LaCrosse received his statuette at a June 21 ceremony in Dallas. He and other winners were chosen by an independent judging panel comprising previous award winners, CEOs, private capital investors and other regional business leaders. LaCrosse and other regional award winners are eligible for national honors, with the EY Entrepreneur of the Year National Overall Award winner to be announced at the annual awards gala in Palm Springs, Calif., in November.
But basking in applause and awards is the furthest things from LaCrosse’s mind. He remains focused on expanding a business he and his uncle, Ernst & Young Hall of Famer Joe Mitchell, founded in 2007. Noticing changes in the Barnett Shale where strong gas production had created a need for saltwater disposal capacity, the fledgling firm built its first saltwater disposal well in the city of Cresson in 2008.
Since then, LaCrosse has led Bosque to success with oil and gas well operators in the Barnett, Eagle Ford and Woodford shales, the Permian Basin and the Bakken formation.
Under LaCrosse’s leadership, the company saw a profit within three months of operation. The firm is worth an estimated $250 million these days and has seen a 60 percent compound annual growth rate since its inception.
LaCrosse took time out of his schedule to talk business with the Fort Worth Business Press.
First of all, congratulations on the EY Entrepreneur of the Year award. To what do you attribute the honor?
I think it’s the idea that I started the business from scratch in an industry [water management] that essentially didn’t exist. Then oil and gas [activity] picked up over the last several years. We had the foresight and were well-positioned for growth. That’s what an entrepreneur is, right? Finding opportunities where they didn’t exist.
Did you attend?
Yes, but I didn’t expect to win.
We’re a relatively young company compared to the peer group, and there were a lot of really talented people there.
Most entrepreneurs seem to have an inner drive, a relentless determination to meet and exceed their goals. Does that describe you?
I’ve got a terrible fear of failure, so I work really hard to be successful. You really want to take it to the next level. I’m a relatively young man at 42. It’s not about the money; it’s about growing and leaving a legacy that you’re proud of and that’s what we’re doing.
I have a saying: being an entrepreneur is like a movie. You’ve don’t know how it will end until you get there. My No. 1 motivator now is the people around me, that we’re all successful.
It sounds like you take charge and really embrace the whole leadership position.
We’re all leaders. You learn to make decisions.
What’s your earliest memory of enjoying the challenge of inventing something or bringing something to market? A school competition, perhaps?
My dad passed away when I was little, so I was self-motivated. I was 7 years old when I wanted to make money on the side. I figured out if I could paint addresses on the curb or mow yards, that would put money in my pocket to spend on weekends. I had a lot of really good mentors.
Perhaps that bolstered your determination.
Yes, it did. I played football for the University of Oklahoma. I didn’t have a father there to support you, so you have to go out there and try.
You and your uncle seemed to sense a need that wasn’t being filled when founding Bosque Systems. What made you realize that need for saltwater disposal capacity?
I sat down with the Barnett executives at Devon [Energy] and asked them questions like, ‘What areas are you concerned about?’ Water was a big issue. They said we have issues with selling this. I said I could solve it. Would you use me?
What does Bosque Systems offer that other companies do not? Here’s your chance to pitch your company.
We use a consultant approach.
You sit down and listen to the person across from you? You try to hear the need and cost to provide it?
You sell yourself.
We’re not a product-based company. We come in with a consultant approach. Each field is different: the Barnett, ones in Oklahoma, South Dakota. They’re all different, so it’s a matter of saying, ‘What are the needs in this particular market?’ and creating a solution that meets that need. There’s no magic black box at Bosque. We create solutions that fit the market.
We’ve seen 80 percent growth over seven years and there’s a reason why: we create customer solutions. In seven years, we went from one market to eight markets and 108 employees last year to 500 employees now.
What areas are growing the most of those eight?
All are equal. We’ve had pretty steady growth over all the regions.
Even in the Barnett Shale?
It’s a steady-state business for us, a good, cash-flowing business we’ve been in. It’s not growing, but size-wise, it’s equivalent to other markets. The Barnett is the largest user; lots of people in the Barnett use us. We have 50 customers in the U.S. now. Ten of those are in the Barnett. Devon is in four markets and EOG [Resources Inc. of Fort Worth] in three. So each is different.
Water is obviously the focus of your business. Are you at all concerned by the state’s water supply? Some project a shortage and actually pushed through legislation ensuring added infrastructure to meet the state’s future water needs.
That’s really what we’re addressing. Our custom solutions allow operators to reuse water. We address the issue of water itself. You can use one barrel 100 times instead of using 100 barrels one time.
Oil and gas drives the economics in the state of Texas. If we can help those operators address the amount of fluid they’re going to need – reusing water – that’s what they’re after. They just want a way that they can do it economically.
What lessons did you learn when Bosque Systems built its first well? And why Cresson for that facility?
There was a need for disposal wells at the time. Now the need is to recycle water. We had no place to take this water and drilling increased in the U.S. The need was to reuse the water, not just dispose the water. I sat down with XTO [Energy Inc. of Fort Worth] guys eight years ago and asked what their needs were. They said they had no place to take it. I said I can solve that problem.
How tough is the competition in the water-management services industry? What strategies do you use convince potential clients that Bosque Services is their best choice for handling their own water needs?
I think there are a lot of companies with magic black boxes, but virtually no company is being a solutions-based provider.
Where did your startup funds come from when launching the company?
From personal funds. My partner wrote a check and said let’s start.
I put every dollar I had into it.
Bosque Systems is based in Fort Worth, yet you and your family live in Dallas. As Amon Carter might have asked, why?
I’d rather live in Dallas. I went to SMU. I love Fort Worth’s business atmosphere and downtown Fort Worth. Downtown Fort Worth felt like home for the business.
But Dallas was more familiar to you since you went to SMU.
If there’s one piece of business advice you could share, what would it be?
Be willing to change if there’s an opportunity. You’ve got to be willing to reinvent yourself at a moment’s notice. I believe that. Be willing to gamble.