AJ Lucas Group is a leading player in drilling services for energy, mining and infrastructure. We take a look at the company and speak to CEO Brett Tredinnick about its services, technology integration and expansion in the mining space.
Historically speaking, Australia has been built around heavy industries.
Mining in particular was an important part of trade, helping to grow early colonial communities across the country, and with abundant mineral resources it has remained a core industry unto the present day.
Yet, it is not just precious metals such as iron and gold that are mined from the Australian earth but also resources that feed into the energy industry. Access to coal and natural gas reserves, two staples of the industry, relies on drilling companies.
“The Australian drilling space is active and exciting, but it still comes with its challenges,” begins Brett Tredinnick, CEO of AJ Lucas Group (AJ Lucas). “Our coal and gas sector is buoyant, particularly metallurgical coal and coal seam gas (CSG), hence we are seeing strong demand for all types of drilling services.
“However, the period between cycles is unpredictable and the global economic drivers are changing rapidly. Who would have predicted COVID-19, the impact it had during the height of the pandemic, and the hangover it is continuing to have on areas such as government policy, trading relationships, supply and skill shortages? Our government climate policies, planning and approval processes and mineral royalty taxes are needed to safeguard certainty for investors and companies alike.”
AJ Lucas is a specialist service provider to the energy, mining and infrastructure sectors, driven by the drilling business and significant investment in multiple shale gas licences in the UK, and is a publicly listed company on the ASX.
The business provides drilling services to the coal and CSG industries for the degasification of coal mines and the recovery and commercialisation of CSG. AJ Lucas offers exploration, production and directional drilling, drilling engineering and steering services, and well servicing.
Headquartered in Brisbane and serviced by a main workshop in Moranbah with support from a satellite facility in the Illawarra, the drilling business is strategically located within the major coal and CSG basins of Queensland and New South Wales (NSW) respectively.
“We currently have a team of around 400 people deployed across our operations, all working towards the mission of being the driller of choice for our customers,” Tredinnick tells us. “Underpinning our technical expertise and experience is the practical knowledge, application and attitude of our people. We have a passion for building relationships and providing solutions; this is the AJ Lucas difference.
“We are committed to becoming the first choice for our customers and our people. We do this by providing a safe and productive workplace where our people feel valued and can achieve their full potential. For our customers, we develop and deliver solutions to exceed their expectations. Our values set the foundation for the way we work and the standards we expect of ourselves.”
MOVING WITH THE TIMES
For Tredinnick, the drilling industry is a familiar one. Tredinnick was appointed as CEO of AJ Lucas in 2020 having previously been the CEO of the drilling division and COO of the group. He has presided over the significant growth, restructuring and strategic initiatives for the Australian operations part of the business in recent years.
Prior to joining AJ Lucas, Tredinnick held various operational and project management roles with Rio Tinto Coal and BHP. He also has qualifications in Metallurgy, an MBA from the University of Queensland, and is a member of the Australian Institute of Company Directors.
“I grew up in Newcastle, NSW, and was surrounded by the coal and steelmaking industries. This provided a backdrop for a seamless transition into these industries following the completion of my education in Metallurgy gained through the BHP graduate programme,” he informs us.
“I was introduced into the mining and drilling industry through a friend, and over the following two decades I have spent my time in a variety of roles within AJ Lucas, leading initiatives that have kept the company’s Australian business safe, profitable, innovative and a leader in its field. The industry has changed a lot over the years, and it continues to do so! There is a lot of technology integration happening at the moment, and we are making use of this to increase efficiency across the business.
“Rotary steerable system (RSS) and bed mapping resistivity (BMR) technology are really exciting areas for us, and the additional data collected is an important value add for our customers so they can increase their understanding of geology in and around the mining horizon. The ability to use our specialist rigs to drill further from one location whilst collecting high-resolution, deep investigation data is a compelling case for us and our customers.
“The challenge has been in communicating the large increase in possible downhole lost in hole cost. These are tools derived from oilfield drilling, but they are expensive, complicated and require a significant investment to operate correctly. I expect that the discussion with our current customers will be an ongoing one as both parties gain experience in using the RSS and BMR tools.”
Technology integration is not the only area of improvement for AJ Lucas. The company has a significant number of ongoing, long-term contracts with the majority of Tier 1 mining companies, and these are a direct result of the consistently strong performance that AJ Lucas delivers.
“These will continue for the foreseeable future and deliver gas drainage, large diameter and exploration drilling,” Tredinnick explains. “Upcoming drilling projects will mostly be similar in nature, with many returning to previous customers who are ready for their next drilling programme, and we will be returning to perform CSG exploration for select customers.”
This kind of expansion directly links to AJ Lucas’ core aims and goals for the coming years. According to Tredinnick, the company is hoping to start and play a key role in underpinning the supply of the UK’s natural gas demand. Natural gas accounts for around 80 percent of the energy source used to heat homes in the UK, and according to the British Geographical Society, AJ Lucas could have approximately 33 Tcf (trillion-cubic-feet) of gas, or 13 years of supply, for all of the UK’s gas needs.
Alongside this, AJ Lucas’ key priorities will be to continue to execute all operations to a high standard of safety and quality, provide high levels of customer service and work with customers to deliver their drilling programmes within the timeframes and budgets they plan for.
For Tredinnick, this kind of expansion, success and growing company potential would not be possible without hard-working and dedicated employees.
“I’m proud of the workforce that we have, many of them have been with us for over 10 years, which speaks volumes about the culture,” he tells us. “Our leaders, both in the field and head office, are enormously experienced and that really helps to deliver the right technical outcomes for our customers whilst maintaining a safe workplace culture.”