Calgary’s Secure Energy is extracting profits from oil-industry waste.Supplied
Sometimes, a company’s name change tells you a lot about its evolution and the sector it’s in. Secure Energy SES-T is scheduled to hold a shareholder vote on Oct. 29 to rename itself Secure Waste Infrastructure Corp. As president and CEO Allen Gransch, 48, explains, “It better describes what we do with our business.”
The oil patch and extraction technology have changed a lot since Secure was launched in 2007. “We were moving from vertically drilling to horizontally drilling,” Gransch says, “and opening up old areas and new plays.” The need for waste processing in Western Canada was also growing—dealing with things like production water, emulsions, sludge and contaminated soils.
Gransch was a young accountant and auditor who grew up on a farm northeast of Saskatoon, and he was excited by the prospect of joining a startup. He says it allowed him to “experience every part of the business.” Gransch has climbed the ladder, from controller to CFO to president in 2022, and CEO in May.
The company chose to focus not just on oil exploration and production, but on what Gransch calls the whole “value chain”—from exploratory drilling to the eventual abandonment of a well. But early excitement was tempered by the collapse of oil prices in 2014 and 2015. Among the lessons Secure learned during the subsequent downturn was that it should concentrate on clients with stable and recurring production, so Secure’s cash flows would be as steady as possible across all business cycles.
It’s taken a while for Secure to reinvent itself. Among other things, the oil patch went through another scare with the arrival of COVID-19 in early 2020. But as Gransch notes, “the pendulum always swings way too far.”
Since then, Secure has been on the rebound, in large part because of some long-planned strategic initiatives. The biggest was the merger with waste processing peer Tervita Corp. in 2021 (although Ottawa’s Competition Bureau ordered a sale of 29 facilities in 2023, which were bought by Waste Connections Inc.).
Gransch feels that Secure’s structure is now right. About 70% of its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is from waste management, and the rest is from energy infrastructure. And he’s pleased that investors and analysts are evaluating the company relative to waste management rivals, rather than oil field services providers. For one thing, the sector multiples are higher.
Yet, looking at one of those multiples, Secure’s enterprise value to its EBITDA, the company is trading at about 7—less than half the average of its peers. “We’re undervalued,” Gransch says, “and we also have great growth opportunities.”