Danos, the oil and gas services firm based in Gray, is one of those rare businesses that has managed to grow from modest beginnings into a $1 billion a year company, while remaining firmly in the founding family’s control well into the third generation.
Danos has the even rarer distinction of being run by a triumvirate of brothers under a power-sharing agreement that has kept them from the kind of drama played out among the fictional Roy family in “Succession.”
Here, Eric Danos, the oldest of the three brothers currently in charge, explains how the company is doubling down on the energy business even as it prepares to diversify for future generations. The planning has been very deliberate, he said, and done under the guidance of the Tulane Family Business Center to avoid typical pitfalls that trap family companies.
This interview has been edited for length and clarity.
Let’s start with a bit of history about Danos. You now employ 3,000 across a variety of oil and gas service businesses. How did it all start?
My grandfather, Allen Danos, started the company in 1947 with his brother-in-law, Syrique Curole — they were married to sisters. They started as a boat business, a marine transportation business. My grandfather borrowed $2,000 to buy a small boat, which they used running people and equipment to the oil fields of south Louisiana. They had one customer for a number of years: Gulf Oil, which is now Chevron. Later, customers started asking, “Hey, we not only need boats, but we need men to help us operate these oil fields. Do you think you can do that for us?” And so he started recruiting people in personnel and putting them to work. And then they said, “Hey, we need construction services.” And it went on like that for a number of years. But both founders died relatively early, in their 40s, and so my father, Hank, and his brother Allen, took over and bought out the Curole family interest. They ran it until my uncle retired in the early 2000s and he sold his interest to my dad, who is still chairman of the main company.
How would you describe the business now?
We think of ourselves in two different business units. One is projects, which is construction and maintenance for offshore oil and gas facilities. That can be anything from fabricating and installing, through welding, bolting or connecting modifications, plus a whole lot of ancillary services. The other unit is production services. So, these are the men and women that we fly offshore or bus onshore to operate the facilities. They could be pumpers, mechanics, instrumentation specialists, electricians, all kinds of disciplines.
Tell me about company leadership and how that works now.
The business now is primarily owned by my brothers Paul, Mark and me, and my father still owns a little piece. When he transitioned management to the third generation, there was a time when the three of us were leading the business together as co-CEOs. That worked fine for a time, but we realized eventually that it’s probably not the most efficient use of our time and was a bit confusing for the organization.
So, Paul, who is 46, took over as CEO of our operating company, Danos. Mark, my youngest brother, 44, began to think about what we call the Family Office. That’s a term a lot of people use, and for us it’s really about fourth- generation development and how we pool financial interests and leverage those for the most impact. Then I started to provide leadership to Danos Ventures, which is a holding company we set up for the family’s interests.
So Danos Ventures is the unit that looks at strategy and thinks longer term?
Our future vision is a little bit different than in the past, when we only ever had one operating company and family all worked in it, owned it. Our vision for the future now is that the family will operate more at the holding company level and we aspire to have multiple portfolio companies that family members might work in or operate. Plus, we have others that are led by and maybe partly owned by nonfamily members. We tie all that together under one umbrella, which we call Danos Ventures.
Danos Ventures was set up in February of this year and already has done the kind of transactions you alluded to. These include iCan Technologies, a training tech company spun out of Danos and run by a former employee, David Ducuir, which made waves at the New Orleans Entrepreneur Week this year as a finalist in the pitch competition. Then, in March, you bought Wood’s offshore labor supply interests. Expand a bit on how Ventures will operate as the Danos umbrella holding company.
My job as head of Ventures is to incubate new opportunities as well as any kind of merger and acquisition activity that helps to grow opportunities on behalf of the family’s companies. So, with iCan it came to an inflection point where we thought we could either hold it close and use it as a competitive advantage, or we could offer it to the world. It’s now reached the point where David and iCan is like a child we’ve nurtured. It’s ready to go and raise institutional capital and get the kind of expertise that will nurture it and allow it to grow a lot faster than if it was held within the confines of Danos.
And on mergers and acquisitions, what does buying the Wood’s interests say about how you see the future of the oil and gas industry?
Our view of what we do through Danos Ventures is not diversifying away from oil and gas but diversifying within oil and gas and other forms of energy. We really like the traditional oil and gas business, we think that there’s decades of opportunity to be had there. So, we’re not at all fearful of making investments and continuing to be an oil and gas services company, but at the same time, we’re paying attention to lower carbon energy and alternative sources of energy.
What opportunities in energy do you currently see as most promising?
I think the Permian Basin and Gulf of Mexico are tremendous opportunities. The reason is the Gulf of Mexico has some of the lowest carbon footprint energy anywhere in the world. They’ll continue to see significant investment and opportunity. The Permian Basin has become a super important and significant oil and gas player on the world stage and there’s a lot of investment opportunity there. In alternative energy, we’re watching what happens with solar and we’re doing some work in west Texas and New Mexico in the solar business. Then, there’s lots of really fascinating things in south Louisiana in particular with carbon capture and storage, and maybe hydrogen as a future energy source. There’s also a lot of talk about reducing emissions, methane emissions in particular.