Pipeline News - May 2012

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

May 2012

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Canada Post Publication No. 40069240

Volume 4 Issue 12

Research & Development A4 Syncrude Applies U of S Research

B1 Aquistore Project Begins

C4 Regina Soil Expert This two-year old thermal solvent vapour extracƟon model can simulate the condiƟons of a reservoir 500 metres deep, and at SAGD temperatures. It could play a key role in unlocking the secret to exploiƟng Saskatchewan’s oilsands. See story on Page C9.

Photo by Brian Zinchuk

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PIPELINE NEWS May 2012

INSIDE A SECTION 3

IPAC-CO2 Puts Forward Standard For Global ConsideraƟon

8

4

Syncrude To Pour Over U of S Water Research

15 Q&A With Enbridge's Director Of Sustainability

6

Editorial

18 Marwayne ProĮle

IPAC-CO2 Develops ExperƟse For Global ConsumpƟon

B SECTION 1

Aquistore Project Explained

16 Estevan OTS Golf Tourney Planned

4

Aquistore Open House

17 Premier Brad Wall Visits Estevan

6

Get Baseline Studies Done First

20 SaskPower President & CEO on R&D

8

Sask. Taking Lead On CO2 Front

C SECTION 1

Kramer Ltd. Expansions

14 ShiŌing Gears: Does He Play Well With Others

4

Regina Should Have Been Built At SwiŌ Current: Soil Expert

16 SEESS Held In Estevan

9

SRC Models High Temp Reservoir CondiƟons

25 Feds Fast Track Reviews

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

June 2012 Focus Contact your Sales Rep to be a part of the focus edition

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PIPELINE NEWS May 2012

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TOP NEWS

IPAC-CO2 puts forward standard for global consideration

Regina – A made-in-Saskatchewan standard regarding storing carbon the world. dioxide underground is being put forward in the coming months for considerA technical committee chaired by Dr. Rick Chalaturnyk, a geotechnical ation to become a world-wide standard. engineering professor and holder of the Foundation CMG endowed chair in After three years of working on the world’s first standard for the geologic reservoir geomechanics at the University of Alberta in Edmonton, and comstorage of carbon dioxide (CO2), the prised of experts from Canada and independent performance assessthe United States, have been working ment centre’s work on the standard on the document since 2010.

The InternaƟonal Performance Assessment Centre for Geologic is finally coming to fruition. The new IPAC-CO2’s director of research Storage of CO2 is puƫng forward a standard that the whole standard is being prepared for release and project management, Majid world may end up using with regards to pumping carbon diin June, and its completion is going Nasehi, is a member of the technical oxide underground to reduce greenhouse gases in the atmoto be a game-changing event for the committee which met April 3-4 in sphere.

File photo carbon capture and storage (CCS) Calgary. industry.

According to Nasehi, “The pur“We are excited for the launch of pose of the meeting was to incorpothe new standards, but more imporrate comments and feedback from tantly, for the global impact the stanthe public review (on CSA Standards will have on the CCS industry,” dards Public Review System) and to said Dr. Carmen Dybwad, CEO of finalize the document.” the International Performance AsThe public review generated a sessment Centre for Geologic Storgreat deal of interest as evidenced age of CO2 (IPAC-CO2). by the over 500 comments submitted during the review period. When Developed by IPAC-CO2 in collaboration with CSA Group asked about the progress of the (formerly CSA Standards), a leadstandard, Nasehi remarked that “the ing developer of standards, codes and standard is set for a summer launch.” personnel certification programs, the On completion, the new stannew standard will provide essential dard will be submitted to the Standards Council of Canada and ANSI guidelines for government regulators, project developers, and researchers in the United States for bilateral recinvolved with CCS around the globe. ognition making it the world’s first The standard will focus on areas such formally-recognized CCS standard in this area. as: requirements for site selection and characterization, monitoring, mea“We did the seed document and surement and verification, injection have been working with them to get operation, modeling and risk assessit into standard form,” Dybwad said. ment, cessation of injection and site “There will be a Canadian standard closure. this summer.”

“Only once the appropriate stanThe new standard will provide dards and guidelines are established the basis for development of the can real progress be made towards international standards by the Inimplementing CCS on a global ternational Standards Organization scale,” said Dybwad.

(ISO).

Having an established standard Continuing their work in stanmeans less developed nations, like dards and regulations development, Nigeria, can use that standard withIPAC- CO2 is in the planning stages out creating its own. “If we apply the of developing standards for the geologic storage of CO2 associated with the Enhanced Oil Recovery (EOR) same standard, you can rest assured, it will be good.”

The group has already been invited workshops on these standards to Trini- operations.

(See related stories Pages A8 and A11) dad and Tobago, which has the second-highest CO2 emissions per capita in

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PIPELINE NEWS May 2012

BRIEFS Montana Exploration Announces Agreement Montana Exploration Corp. has entered into a farm out and participation agreement with a Denverbased private company that has made a staged commitment of approximately $10 million to earn a 50 per cent interest in 110,000 net acres of the company’s lands in Montana.

Montana’s new partner is supported by significant private equity and adds a team of exploration and production professionals. The objective is to extend the proven Shaunavon oil trend from southern Saskatchewan across the company’s Montana lands. As a result of the farm out and participation agreement, MTZ’s 390,000 (270,000 net) acres in Montana will have significant value.

MTZ has identified multiple oil targets in five play types over a large acreage base offsetting existing production in the Upper and Lower Shaunavon. The participant will make a $6.7 million staged cash payment to MTZ and will pay $1.5 million to shoot 25 square miles of 3D seismic and will commit $2 million towards two initial wells to identify and pursue commercial production in the Upper and Lower Shaunavon.

Briefs courtesy Nickle’s Daily Oil Bulletin

Syncrude to pour over U of S water research

By Geoff Lee Pipeline News Saskatoon – University of Saskatchewan civil engineering professor Lee Barbour will help Syncrude to break new ground in the creation of the first wetland on reclaimed mine land in the Alberta oilsands.

Barbour is heading a $2.6 million research project in partnership with the federal Natural Sciences and Engineering Research Council and Syncrude.

The five-year project will lead to important insights into the performance of Syncrude’s reclaimed mine sites.

The project will focus on two major reclaimed landforms (overburden and tailings sand) but will also extend research into two new areas that are being reclaimed.

This includes a new 17-hectare experimental wetland at the Mildred Lake mine site where the oilsands industry’s first fen pilot project will take place.

The fen will be created on land formerly mined and currently in the process of being reclaimed.

The other study site is Syncrude’s 50-hectare experimental watershed on a lean oilsands dump at the Aurora mine.

“We will determine the magnitude, rate, pathway, and chemistry of groundwater moving through reclaimed oilsands mine landforms,” said Barbour in a project launch news release.

“Our goal is to provide the information needed by oilsands developers like Syncrude so they can create new landscapes that are sustainable and support natural processes.”

Syncrude will invest more than $1.3 million over the five year project called Hydrogeological Characterization of Oil Sands Mine Closure Landforms with $1.3 million provided by NSERC. In addition, Syncrude and the U of S will contribute more than $1 million through in-kind support.

Syncrude will also provide on-site logistical support as well as instrumentation, drilling, sample collection, transportation and data gathering.

Since the project announcement in February, Barbour has been working to put together a 14 member team of students and researchers for summer field work and winter drilling on reclaimed land at Mildred Lake.

“We are in the recruiting stage. We have a couple of students already recruited and we are looking for more,” said Barbour.

“We have also started to map the isotopic signature of sitewide waters.

U of S civil engineering professor Lee Barbour heads a $2.6 million research study on the movement of water through reclaimed oilsands mine sites at Syncrude, to provide criƟcal insights into the performance of reclaimed mining areas.

“We are taking water from across the Mildred Lake mine site – surface water and ground water – and we are starting to characterize the isotopic signature of a number of landforms.

“We believe we can track the distribution of isotopes on these landforms and use that as an indicator of ground water movement.”

Barbour has led multidisciplinary research into the performance of reclamation soil covers at oilsands mine sites for the past 12 years.

His previous research has included some watershed performance studies at Syncrude’s reclaimed South Bison Hills where the primary focus was on the health of reclamation cover.

“The one piece of the puzzle we haven’t pursued is what happens to water that passes through the cover, and then enters the landform and then moves through the landform, and eventually discharges to adjacent surface water receptors in streams or lakes or continues on as groundwater,” he explained.

“What we are trying to do is develop some tools to track the movement of infiltrating water deep through these landforms to evaluate what types of chemical loading might be occurring from these land forms to surface water receptors (lakes and streams) as you move the sites to closure.

“The information will help Syncrude to optimize their sitewide drainage at closure.” ɸ Page A5

Correction

In the April edition of Pipeline News, a typo changed the meaning of a paragraph. On Page A17, in the story about Synergy Human Resources entitled “Go West, young Ontarians!” it read: “While her work includes policy and handbook writing, advice on discipline and termination issues, the growth market she’s not targeting is recruiting people to come to southeast Saskatchewan, particularly for the oilpatch.”

Synergy is most definitely recruiting people for the southeast Saskatchewan oilpatch. The sentence should have read “the growth market she’s now targeting”, and not “the growth market she’s not targeting,” as was printed.

Pipeline News regrets this error and any confusion it may have caused.

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PIPELINE NEWS May 2012 University of Saskatchewan research helped Syncrude create sustainable wetlands into its reclaimed oilsands mine sites.

Syncrude will create the oilsands industry’s Įrst wetland from the ground up on land formerly mined and in the process of being reclaimed in the Mildred Lake area. The former East Mine being reclaimed includes a 50-hectare watershed that contains the Syncrude’s pilot 17-hectare fen research project. The darker area in the foreground is the pilot fen area. Photo submiƩed

This is photo of the established reclaimed area that Syncrude calls South Bison Hills at the Mildred Lake lease. In the photo, the area that is above the dirt road is the reclaimed area. The enƟre reclaimed area in this locaƟon is approximately 1,000 hectares in size.

Photo submiƩed

ɺ Page A4 The water movement data study is key to Syncrude’s quest to build sustainable wetlands into its reclaimed mining areas, overburden dumps and tailings sites.

“The research by the U of S will give us the insight and knowledge on how to incorporate wetlands into the landscapes,” said Syncrude spokesperson Cheryl Robb.

“We want the ecosystems that we reclaim to be part of the surrounding landscapes and to keep growing after we are gone.

“The hydrogeology of landscapes is crucial to their development and making sure they are sustainable. It’s one of the key factors in creating sustainable ecosystems.

“The goal of the research is to study the movement of groundwater and surface water – how much water comes from rain and snow melt and how much groundwater is moving through the reclaimed landforms.

“It’s a key part of making sure your reclamation areas are sustainable.”

Syncrude’s pilot fen will be located in the former East Mine pit that is being reclaimed to forested areas and wetlands including a 50-hectare watershed. That watershed contains the 17-hectare fen research project.

“The fen will be the type of wetland that is groundwater fed,” said Robb. “We are going to be doing more extensive wetlands work.

“We’ve always been interested in the water and the hydrogeology of areas.

“We have more than a decade of history working with U of S. They have been involved in measuring the hydrogeology in the South Bison Hills reclaimed area at Syncrude.

“Essentially, we are tracking every drop of water that runs through the area and that’s been done for a number of years. We also have a few wetlands in that area.”

Barbour said Syncrude has demonstrated they have been able to reclaim their land as it’s mined out, but they need information to understand how well the reclamation is performing and anticipate any challenges with water releases from these sites.

“I don’t think uplands reclamation is as uncertain as it used to be years ago. I think they have the confidence now to do that,” he said.

“Now the question is focusing more on wetlands, and in the

long term, what is going to be the performance of wetlands and drainage systems.”

An associate industrial research “chair” at the U of S will be funded by Syncrude this year and will focus on the geochemistry of mine closure landforms.

“That second chair will focus on characterizing the geochemistry of the landforms while my chair focuses more on the groundwater movement,” said Barbour.

“Most of the water entering the landforms moves down through the overburden dumps and discharges to adjacent wetlands.

“Most of our interest is the movement of water through these uplands knowing there is a high probability they will be discharging water to wetlands that are on the site.

“If you look at the hydrogeological system, groundwater tends to move down into those landforms and then discharges or releases back to the adjacent wetlands.”

Barbour says the project is open-ended and could be extended another five years considering the enormous scale of restoring mined sites to a natural state.

“When you have mined out the lease, you need to start working toward returning the entire mined area back to the equivalent of a natural system,” said Barbour.

“You are looking at integrating and balancing surface water volumes and quality, and groundwater volumes and quality.

“You need to make sure that site is on a trajectory where it’s going to be able to produce an equivalent ecosystem to what was adjacent to it.”

Barbour has more than 30 years of research and industrial experience in geo-environmental engineering.

Syncrude also has approximately nine research chairs funded at the University of Alberta, and is working on a variety of oilsands research projects with universities across Canada and the United States.

“Research has always been a key part of our organization since day one,” said Robb.

“When we were incorporated in 1964, the Alberta government didn’t let us produce oil until 1978 so the company set up a research department in Edmonton.

“We had 14 years to research before start-up to understand oilsands development.”

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BRIEFS Longview drilling in AB and SK

Longview Oil Corp.’s 2012 capital budget is approximately $73 million, which includes the drilling of 25.3 net (34 gross) wells.

Longview has contracted three rigs, two of which will target Alberta prospects with the additional rig targeting the Midale formation in southeast Saskatchewan.

The capital expenditure program also includes analysis of cores that were taken from the Duvernay and Nordegg shale formations on a well that was drilled at Sunset in the fourth quarter of 2011.

Detailed core analysis is expected this summer.

Longview’s 2011 capital program and well workover and reactivation activities were initially delayed due to poor field conditions from severe wet weather during much of the spring and summer. The company was able to start its Alberta capital expenditure program in July with the Saskatchewan program beginning in September. Notwithstanding the delays, the company was able to expedite its efforts and complete the capital expenditure program.

During the third and fourth quarters, the company conducted a number of well workovers and reactivations primarily in southeast Saskatchewan that resulted in higher-than-normal operating costs. In 2011, the company drilled 20.7 net (30 gross) oil wells with a 100 per cent success rate.

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS May 2012

PIPELINE NEWS

EDITORIAL

Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.

Publisher: Brant Kersey - Estevan Ph: 1.306.634.2654 Fax: 1.306.634.3934 Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.461.5599 SOUTHWEST Swift Current 1.306.461.5599 NORTHWEST Geoff Lee - Lloydminster 1.780.875.6685

Associate Advertising Consultants: SOUTHEAST • Estevan 1.306.634.2654 Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw SOUTHWEST • Swift Current 1.306.773.8260 Doug Evjen Stacey Powell NORTHWEST • Lloydminster Randi Mast 1.780.875.6685 MANITOBA • Virden - Dianne Hanson 1.204.748.3931 • Estevan - Cindy Beaulieu 1.306.634.2654 CONTRIBUTORS • Estevan - Nadine Elson To submit a stories or ideas: Pipelines News is always looking for stories or ideas for stories from our readers. To contribute please contact your local contributing reporter.

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Invest heavily in oilÀeld R&D Three years ago, Pipeline News chose to highlight research and development as its monthly focus. This month, we have revisited the topic, which entailed getting re-acquainted with many of the players we first spoke to in 2009.

Three years later, our eyes are still being opened wide. What’s striking is how much research is being done in this province in oil and gas, as well as power generation.

SaskPower could be considered the biggest researcher by far, in that they are investing $1.24 billion into the Boundary Dam carbon capture project. While this is considered commercialization of a known entity, in practice, it’s still a learning curve. Lessons taken from the Unit 3 project will be incorporated into subsequent units in later years, with an expectation that the costs will come down substantially.

The province has an absolute gem in the Petroleum Technology Research Centre, which works hand-in-glove with the University of Regina (as well as several other universities). The research being conducted by the PTRC and U of R has a very direct impact on the energy business. In the STEPS program, there are several dozen projects going on at any given time, with focuses on areas ranging from waterflooding to SAGD. Currently underway near Estevan is the $22 million Aquistore project, which will see carbon dioxide from the Boundary Dam project injected deep down into the Deadwood formation, three kilometres west, and over three kilometres below the power station.

Two years ago, the Saskatchewan Research Council commissioned its second large-scale model which replicates conditions in an oil reservoir 500 metres deep. The new one is capable of simulating SAGD temperatures. The irony is that half its initial cost was

paid for by Oilsands Quest, and yet that company has not been able to capitalize on its investment and is struggling to stay afloat.

It speaks volumes, however, to the importance of research in developing our oil resources. So far no one, including Oilsands Quest, has commercially developed Saskatchewan’s oilsands. It’s not going to happen until a lot more research is done, likely with that very simulator.

For many years, Saskatchewan governments have talked about the promise of increased recovery rates from heavy oil. Those rates are still currently in the single digits. It was with this purpose in mind the PTRC was formed, and a lot of its work is focused on that area.

Think for a minute of what impact a breakthrough could have on this province, with such enormous oil in place as we have with heavy oil. Five years ago, North Dakota was only producing 90,000 barrels of oil a day. Reuters just reported that number is now 558,000 bpd, an increase of 12,000 bpd in one month alone. North Dakota has a 3.1 per cent unemployment rate. That hockey stick graph of rising production is purely because a new approach was taken to develop a resource that was long known to exist, but had been uneconomic to exploit.

If one of the research projects underway now suddenly “cracks the nut” on heavy oil production, we could be heading the same direction, instead of simply maintaining our current level of production over the last decade.

If anything, Saskatchewan should re-double its research efforts through the PTRC. If it resulted in doubling the heavy oil production in this province, the return on investment would be in well into the billions for provincial coffers. That would be money well spent.

PIPELINE NEWS May 2012

A7

OPINION From the Top of The Pile

By Brian Zinchuk

A Tweeted debate on energy policy “We are seeing the end of the oil industry. People are starting to realize enough is enough.”

So tweeted my friend Jim, who lives in the greater Toronto area. Jim used to be the sports reporter in North Battleford when I chased courts and cops there. He now does layout work with the Canadian Press. He was obviously frustrated with a recent fillup at the gas station.

I couldn’t let that one stand, however, so I responded, “As the editor of Pipeline News, I highly doubt that.”

Jim said, “In order to have an industry, you need people to purchase oil and gas for their vehicles. Going up to $1.40 2nite #ripoff.”

I responded, “And when 7 billion people start walking en masse in all weather, and we no longer need semis, you will be right. Not before.

“Best line I saw in the National Post today: the world isn’t going to switch to biofuels and solar power _overnight_.”

He countered, “Think about it Zinchuk. What is your threshold before you say enough is enough? $1,50, $2, $3, $5, $7 a litre?”

“Western civilization cannot survive without oil. Period. They cannot move, clothe themselves, or produce goods without it,” I tweeted back. “I live in rural Saskatchewan. My job has me travel all over the region. There is no public transit to speak of.

Threshold?”

“I agree, but why then do oil and gas companies nickel and dime their only customers. One day it's $1.20 a litre the next $1.25,” Jim said. “There is going to become a price for a litre of gas that even you say what the hell am I paying this for?”

“I am more worried about oil prices plummeting to $37/bbl. like they did in 2009 after hitting $147 in July 08,” I said.

Jim tweeted, “I may not drive as much as you, but I have to drive to get to work as well and $1.40 a litre is bloody ridiculous.”

“Oil is what is keeping Canada afloat in this economy. Not Ontario manufacturing. Alberta and Saskatchewan oil is paying Ontario equalization,” I said.

Jim replied, “I agree, my whole argument is when are we going to stand up and say the hell with these oil companies and their ridiculous prices.

“And don't get me started on premier step dad.

I don't have enough hours in a day to go into the Liberals today.”

I presented a route for him to take. “Simple solution: Nationalize all oil production – provide it to the public for around $0.25 per litre, just like Saudi Arabia.”

“Now you are talking. See, I knew I would eventually get you to come around and see things a little clearer. Ha ha ha,” Jim said.

“And in the same breath, take away all human

rights, like women going out in public without a male family member,” I continued.

“Now you are just being ridiculous. If the world runs on oil, you have to admit there needs to be some regulation,” he retorted. “So the consumer doesn't get screwed.

Look at the taxes we pay and look at the state of our roads. #pathetic.”

“There was plenty of regulation and price controls ... in the Soviet Union. That went well, you think?” I said.

“Not at first, but things are starting to come around. Short term pain for long term gain,” he said.

Somewhere around this point, we both had run out of witty things to say. But I guess we’ve proven it is possible to have a somewhat meaningful discourse on energy policy, 140 characters at a time. Personally, however, I think I’ll stick to columns and in-person debates.

Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net. If you really want to follow his few and sporadic tweets, you can follow @ BrianZinchuk. You will likely never learn anything of importance, but it will make him feel good to have a follower that’s not a bot.

Lee Side of Lloyd

By Geoff Lee

PR makeover on tap for oilsands This year is shaping up to be the year of environmental performance monitoring of the oilsands industry in Alberta with several public and industry-based groups tackling the lead air, water, land and tailings issues.

The year began with news of the Canada-Alberta implementation plan for integrated environmental monitoring in the oilsands region.

As partners, the federal and Alberta government aim to implement a single government-led monitoring system based on sound science and provide transparency regarding the environment performance of the industry.

The Canadian Association of Petroleum Producers (CAPP) also has an ongoing Responsible Canadian Energy program.

That program represents the collective goal of Canada’s oil and gas industry to measure its own performance and demonstrate progress with an annual report card on environment concerns – including the oil sands.

In March, a 12-member industry group called Canada’s Oil Sands Innovation Alliance (COSIA) was formed to accelerate the pace of environmental performance of the oilsands.

The mission of COSIA is to identify, develop and

apply solutions-oriented innovation around the most pressing environmental challenges of the oilsands.

What each of these groups has in common is a public relations goal to shape public opinion in favour of the oilsands industry by effective means.

The overriding PR message that industry and government want to project is best stated by CAPP on its website: Canada’s oilsands industry will provide a secure source of energy, reduce its impact on the environment and provide economic benefits to society while developing this globally significant resource.

The least believable part of this mission statement is environment performance which these new groups and alliances recognize and aim to tackle head-on.

Monitoring and improving the environmental performance of the oilsands will help to counter recent successful campaigns by international environmentalists and politicians that paint all oil produced from bitumen in the Fort McMurray area as dirty oil.

The perception of poor environmental performance proved to be a costly one for industry in November 2011 when the U.S. government based its decision not to issue a permit for the construction of the Keystone XL pipeline on environment concerns.

President Obama did accept however, that the pipeline that would carry crude from Alberta’s oilsands to the U.S. Gulf Coast would provide Americans with a secure source of energy and generate economic benefits and jobs for U.S. workers.

The oil and gas industry in Canada clearly underestimated the importance and power of environmental performance in the equation of benefits from the development of the oilsands infrastructure.

These new government and industry alliances are hoping to correct the imbalance to meet public expectations of environmental performance.

The task of improving environmental performance will also lead to new investment in research and development in new technologies aimed at reducing greenhouse gas emissions, reducing the use of fresh water and reclaiming more land disturbed from the mining of bitumen.

This, in term, will help to strengthen the idea that spending money to improve environmental performance is also good for the economy and job creation.

It will also help the industry to meet the demand from its stakeholders and the public to access credible information about the oil and gas industry in Canada.

Tracking and reporting environmental performance will help the industry to demonstrate its progress while taking a collaborative approach to solutions.

The message is getting out. Transparency of the oil and gas industry’s social and environment performance is just as important to the industry as it is to Canadians and international customers and consumers.

PIPELINE NEWS INVITES OPPOSING VIEW POINTS. EDITORIALS AND LETTERS TO THE EDITOR ARE WELCOME. Email to: brian.zinchuk@sasktel.net

A8

PIPELINE NEWS May 2012

IPAC-CO2 develops expertise for global consumption

By Brian Zinchuk Pipeline News

Quality assurance expert Eric Ringler (right) monitored all work on the Kerr property to ensure it adhered to the peer reviewed quality assurance and work plan. He was there in June of 2011.

Photo by Jon Gillies/IPAC-CO2

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Regina – In a world where greenhouse gases will be captured and stored underground, someone needs to provide the expertise on a global scale to make sure it’s being done right. In recent years, the Regina-based International Performance Assessment Centre for Geologic Storage of CO2 has been positioning itself to be that expert resource.

The organization is in the process of submitting a standard for consideration by the International Standards Organization (ISO) (see related story Page A3)

and has created an inventory of potential carbon sinks for Saskatchewan (see related story Page A11). They’ve also jumped at the chance to provide an independent assessment of an alleged, but eventually unproven, geologic carbon dioxide leak south of Weyburn.

It’s been a busy few years for IPAC-CO2.

Carmen Dybwad, CEO of IPAC-CO2, has spent more than a few years working on carbon dioxide storage. “I’ve been doing carbon dioxide capture and storage for over 20 years,” she said, noting initially it was biological, not geological storage, as she worked with the Shand Greenhouse.

“I’ve gone underground,” she said.

That background provides some context for Dybwad. “Twenty years ago, we heard, ‘We can’t do this without a price for carbon.’”

That has remained a common refrain.

“The price for carbon is, in essence, a tax, and governments are loathe to do it,” she said.

Carbon capture and storage projects are, in many cases, foundering, with stagnation in Europe and only one of four projects the Alberta government had backed for funding under its $2 billion CO2 initiative (Shell’s Quest project) making any headway. ɸ Page A9 Troy Illingworth Cell: (780) 808-3183 Tim Sharp Cell: (780) 871-1276

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Dr. Carmen Dybwad is CEO of the InternaƟonal Performance Assessment Centre for Geologic Storage of CO2.

Photo by Brian Zinchuk

ɺ Page A8 Quest would capture more than one million tonnes of CO2 per year from Shell’s Scotford Upgrader, located near Fort Saskatchewan, Alberta. This is the equivalent to taking 175,000 cars off the road.

The lack of progress for other initiatives goes back to the lack of a price for carbon, and the need for such a price to act as an imperative for development.

Shell has been one of the major partners with IPAC-CO2 from the beginning, partnering with the government of Saskatchewan in setting up the organization. Dybwad said, “It was very much in Shell’s interest to have a group set up to do third party characterization and review. It speaks volumes. It’s so important we get this right, a really good, viable, safe storage for greenhouse gas emissions.”

The first tranche of funding ends a year from now, but Dybwad said, “We believe we will continue to be funded by the government.”

Another source of income is a fee-for-service for third party assessments.

“It is incredibly important for Saskatchewan as a whole to carve out its niche in the CCS role,” Dybwad said.

But there are some advances on the horizon. The United Kingdom has put another billion pounds into CCS development, Dybwad said. The Chinese are looking at a similar path as well.

“They looked like they were not interested, but they always went to meetings,” she said. Now Dybwad expects numerous commercial-scale projects from the Chinese.

Saskatchewan, through its SaskPower Boundary Dam project meant to capture carbon dioxide from a coal-fired power plant, the Aquistore storage project, plus a recently announced research project at the Shand Power Station, has a fully integrated system in the works.

Investigation In January 2011, Cameron and Jane Kerr, owners of a farm just a few kilometres from the Cenovus plant near Goodwater, went to the media alleging CO2 was leaking from the Weyburn CO2 miscible flood program that surrounds their farm. IPAC-CO2 leapt into action, announcing they would conduct an independent study into the allegations. That 180-page study was released Dec. 11, 2011, and determined carbon dioxide is not leaking on the Kerr farm from deep underground. ɸ Page A10

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PIPELINE NEWS May 2012

CO2 trunk line envisioned Éş Page A9 “Most of what we’ve been doing is capacity building,â€? Dybwad said. The Kerr investigation was part of that. “We’re advocates for CCS, but not apologists for it. We believe it is safe and permanent. Had we gone through the Kerr investigation and found it was anthropogenic (man-made) CO2, that would have been a shock, but then you would have to ďŹ nd out what broke along the way that caused it to happen.â€?

In that manner, Dybwad likens IPAC-CO2’s investigative role to that of the Transportation Safety Board of Canada, which analyzes airplane crashes to determine strategies for reducing the likelihood of similar incidents occurring again. “The worst thing would have been trying to cover it up,� she said. “At the end of the day, there was no anthropogenic CO2.�

Joe Ralko, who handles communications for IPAC-CO2, noted there was global interest in the Kerr investigation. He said there were calls from virtually every continent, and items written in all sorts of languages. They were con-

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Al Bjornson (leĹŒ), owner of Border City Drilling in Estevan, worked with IPAC-CO2’s invesĆ&#x;gaĆ&#x;on to drill the monitoring and test wells on the Kerr property.

Photo by Jon Gillies/IPAC-CO2

tacted by numerous blogs and several wire services they had never even heard of before.

IPAC-CO2 was a ďŹ nalist for the prestigious Gold Quill awards from the International Association of Business Communicators (IABC) for its communications work on the Kerr investigation.

It was a learning experience for everyone, Dybwad said. “Industry learned over and over, you need a third party group to provide reassurance. The public deserves to see.�

Other projects Another project IPAC-CO2 has been working on is creating an inventory of carbon dioxide sources and sinks, and matching a corresponding pipeline size for Saskatchewan. This is similar in concept to Alberta’s proposed carbon dioxide trunk line. “That’s exactly what we would like to see. We’re thinking of the whole province,� Dybwad said.

With regards to the Aquistore project that the Petroleum Technology Research Centres is doing in conjunction with SaskPower as part of the Boundary Dam carbon capture project, Dybwad said, “It’s really what we were set up to do.�

IPAC-CO2’s role with Aquistore, if any, has not yet been determined. It is not part of the project team, and could end up working for either the proponent, SaskPower, or on behalf of the provincial government through the Ministry of Energy and Resources. “We’re more like a certiďŹ cation body,â€? she said, adding IPAC-CO2 is negotiating its role with the project. “I suspect it will probably be with the proponent,â€? she said.

In Saskatchewan, where SaskPower is owned by the provincial government, it’s a case of six of one, a half dozen of the other.

IPAC-CO2 is currently involved with a “carbon commons� knowledge exchange, where more than 600 individuals, mostly Canadian research scientists, can discuss ideas in a “seeker-solver� format.

The organization has also been conducting annual surveys, particularly in Saskatchewan, to determine public knowledge and attitudes towards carbon capture and storage.

Role IPAC-CO2’s ďŹ rst oversight role is to take a look at the geological storage plan. Have they considered all the elements and risk? How will it be monitored?

What will go on in the subsurface? What about subsurface trespass? Have they done community engagement? Is there a licence to operated?

These are just some of the considerations the group can advise on. “Then the project managers will hire people to do the monitoring,� Dybwad said.

IPAC-CO2 does a ďŹ nal assessment, providing a panel of experts. “A standard tells you what to do, not how to do it. We’re technology neutral.

It’s goal-oriented, not prescriptive.�

While there is a lot of talk of green energy sources supplanting greenhouse gas emitting technologies, the fact remains the world still depends on fossil fuels, according to Dybwad. Correspondingly, ways to limit those greenhouse gases are a key consideration going forward. “This is going to be the only game in town going forward. We’re going to keep using fossil fuels. That’s just a matter of fact,� Dybwad said.

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A11

IPAC-CO2 completes Àrst ever SK inventory

IPAC-CO2 has created an inventory of potenƟal sinks, or storage places, for carbon dioxide in Saskatchewan. They include depleted oil and gas reservoirs, deep saline aquifers, coal beds and salt caverns as well as injecƟon for enhanced oil recovery (EOR). This Įle photo shows a carbon dioxide injecƟon well for Apache, north of Midale.

Regina – A team of scientists at IPAC-CO2 Research Inc. has compiled the first ever report that estimates carbon dioxide (CO2) storage capacity for all of the potential storage locations in Saskatchewan.

“The identification and analysis of the potential sinks for geological storage of CO2 will not only contribute towards the development of integrated carbon capture and storage (CCS) infrastructure, it will also help to meet climate change mitigations objectives by reducing CO2 emissions through developing practical applications for geological storage of CO2,” explained Carmen Dybwad, CEO of IPAC-CO2.

“Among the Canadian provinces, Saskatchewan is the fourth largest producer of greenhouse gases, which make us responsible for finding ways to reduce these emissions without affecting our booming economy of the last years. CCS is a very important way to do it.”

Saskatchewan is the second largest oil producing province in Canada, contributing approximately 20 per cent to the total Canadian oil production.

This provides vast potential for the application of CO2 through enhanced oil recovery because significant amounts of the injected CO2 can be stored within the oil reservoirs.

Saskatchewan also has several deep saline aquifers and deep unmineable coal beds which are considered potential CO2 storage sinks.

“This is the first comprehensive inventory in Saskatchewan, and a great example of the kind of work IPAC-CO2 can do elsewhere in the world,” Dybwad said.

“As a result of the experience and expertise that we developed, we have started a similar project for residual oil zones (ROZs) in Saskatchewan.”

Majid Nasehi, IPAC-CO2’s senior project manager, and Mohammad Derakhshanfar, research engineer, presented the results of the detailed analysis to an international conference in Calgary.

Storage of carbon dioxide in underground formations is considered a major tool to reduce greenhouse gas emissions and mitigate climate change. The potential sinks for geological storage of CO2 include storage in depleted oil and gas reservoirs, deep saline aquifers, coal beds and salt caverns as well as injection for enhanced oil recovery (EOR).

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PIPELINE NEWS May 2012

Tempco builds new top drive

By Geoff Lee Nisku, Alta. – Tempco Drilling Limited hopes to gain ground on the competition with the construction of their third top drive drilling rig at their Nisku manufacturing shop.

Rig 8 will be a Range 3 rig capable of connecting a joint and a half of pipe for faster drilling speed.

“A Range 3 with a top drive is probably the best model you can build for its size – it keeps the rig size down,” said manager Eric Lang.

“Depth capacity is a lot greater with a Range 3. You’ve got more capacity derrick-wise and pump-wide – and just the capability of what a top drive gives you.”

“We wouldn’t be doing a lot of work if we didn’t have these top drive rigs.

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Tempco Įeld supervisor Geoī Clouter, leŌ, checks the coding list of parts for the new top drive top rig with manager Eric Lang.

“You can drill vertical horizontal and directional wells with a top drive. If you are in an area, they are going to use you rather than bring another rig in.

“Guys like Allstar (Energy Ltd.) – they don’t really want to use any other kind of rig.”

Tempco’s first top drive, a retrofit known as Rig 6, will be drilling 50 horizontal wells this season for Allstar and Renegade Petroleum in the Kindersley area.

“Kindersley has been good and it sounds like it’s going to stay that way for hopefully a couple of more years,” said Lang.

Rig 7, the company’s second top drive that went into service last summer, is currently drilling in the Coronation area and will shift to Provost where Rig 8 is bound when it rolls out of the shop in June.

“We picked up work in the Provost area with a new company called Black Shire (Energy). They’re out of Calgary and they have a few dollars they want to spend on horizontal wells,” said Lang.

“The work out there warranted having more rigs of the same size. Rig 8 will be identical to the other two. Everything is interchangeable. We kept them similar so we don’t have a training issue.

“It’s very simple to learn. Once crews go to a top drive, they don’t want to go back to a conventional.”

Safety and efficiency are two of the main selling points for a top drive that replaces the traditional kelly or rotary table .

“The safety factor is a big thing,” said Lang. “The pipe is still rotating, but you don’t have to rack the kelly back. There’s less tubular handling on the rig floor and less connection time fitting pipe together.”

The Range 3 top drive can connect 45-foot joint stands compared to 31 feet for a range two.

“There are conventional Range 3 rigs as well, but the top drive just makes it that much quicker,” said Lang.

“It’s essentially a joint and a half every time you pick up and when you are tripping too. “ Lang estimates that drilling a typical 1,500 to 1,600 metre horizontal well in the Kindersley area with a top drive rig is about 28 hours faster than a conventional rig.

“Speed comes doing fewer connections, and you’ve got a little more control.

It’s more efficient all the way around,” said Lang. ɸ Page A13

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A13

ɺ Page A12 porarily taken back to Lloydminster during breakup to do a project for Hawk “Even for the shallow stuff, the top drive has a lot of advantages.

Exploration.

“It’s the advantage that you can keep pumping longer and rotate both ways A second conventional rig will also be dispatched in late April to the coming in and out of the hole. There is less chance of getting stuck in the hole, Stockholm area south of Yorkton to drill potash cores – and open new doors especially on horizontal wells.” for Tempco.

A top drive is also preferable for chal“That will be a new pickle for us,” said lenging extended reach and directional Lang. “I would like to get a little more into wells. that potash coring.

Tempco buys the top drive components “The drilling is basically the same. They from Warrior in Calgary and builds the rigs are vertical wells – larger bore wells. They do in-house with input from field supervisors lots of coring to see what the formations are and crews who lend a hand with the fabrilike. cation and assembly during spring breakup.

“I would really like to get into that side “Some of the stuff we want to change a little more. They will be ready to go by the for the better and figure out how we are end of April and get a couple of wells drilled.” going to adapt it to the other rigs and make Lang is also looking ahead to two more it safer for the guys to rig up and tear out,” years of winter drilling for ConnocoPhillips said Lang. near Conklin, Alta. following their first sucPlans are in the works for another cessful winter of work with three rigs at the top drive rig next year to keep pace with Surmont oil sands project, 60 miles south of record horizontal oil drilling, particularly in Fort McMurray.

Saskatchewan, where more than 5,000 well “We were there for 75 days. This was our licences were issued in 2011. first run for Connoco,” said Lang.

“We will probably retire a rig and build “We got invited back for the next two another top drive,” said Lang. “It gives you winters. We guaranteed them three more rigs a lot more flexibility to the wells that you for the next two winters. are drilling.”

“It’s the same program with 75 days Tempco expects to be drilling four of work per rig. We are looking forward to or five more wells for Allstar at the Red working for them,” he said.

Rig hand Tom Borys grids a propane tank holder.

Pheasant Reserve this year, along with Tempco received a safety award from some conventional drilling in the Edam area.

Connoco in April for zero incidents and zero time lost at Surmont.

“It’s just starting to pick up now. Road bans are going off on the 15th in “They are the largest oil company in the world. It’s a good feather in your Kindersley,” said Lang during an April 13 tour at the Nisku shop. cap when you can pull off a good safe working season with them,” said Lang.

“We’ve already got calls in the last couple of days – the guys want to get “They are a good bunch of people to work with. They really work with you going down there as well as in the Edam area. and walk the talk.”

“There were no bans up there, so we are just waiting on locations. The Two Tempco rig managers and five drillers were presented with safety Provost area won’t get going until the end of April when we get some bans off awards for two years of operating without incidents during the Canadian Assothere. ciation of Drilling Contractors Safety Award Banquet in Calgary on April 14.

“The guys are all gung-ho to go.”

Tempco was also a gold sponsor at the 2012 safety award banquet for land Tempco has more drilling to do in Virden, Man. with Rig 3 that was tembased drillers.

A14

PIPELINE NEWS May 2012

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PIPELINE NEWS May 2012

A15

Northern Gateway a proving ground

By Geoff Lee Enbridge Inc. recently launched the new Enbridge Centre for Corporate Sustainability in a partnership with the University of Calgary’s Haskayne School of Business.

The ECCS will focus research on the so-called triple bottom line in business to make decisions and policies that balance economics with social and environmental factors. The ECCS will also host a series of Enbridge Seminars in Action on the science of corporate sustainability.

We asked Paul Hunt, an ECCS advisory board member and Enbridge’s director of sustainability and social responsibility, to explain corporate sustainability and the type of research to be conducted at ECCS that will have an impact on the way energy companies do business.

Hunt also answered questions on how Enbridge is practicing corporate sustainability during the ongoing National Energy Board hearing process for its proposed Northern Gateway pipeline project.

The proposed 1,777 kilometre pipeline aims to carry oil from Bruderheim, Alta. to a port facility in Kitimat, B.C. to access energy markets in Asia.

PN: Is corporate sustainability something that is new?

Hunt: No, not really. I think it’s the goal of every company to stay in business indefinitely to grow and prosper.

It’s just been in the past 25 years or so that companies have explicitly recognized that in addition to being good financially, they have also got to perform well environmentally and socially in the communities in which they operate.

Another common term companies are using

Enbridge has commiƩed $2.25 million over 10 years toward a new Enbridge Centre for Corporate Sustainability at the University of Calgary’s Haskayne School of Business. Paul Hunt is Enbridge’s director of sustainability and social responsibility and member of the ECCS advisory board.

Photo submiƩed

these days is the triple bottom line, reflecting those three areas.

PN: Why is corporate sustainability called a science?

Hunt: Sustainability and corporate social responsibility are really the interface between social and ecological consequences of business activities.

The key disciplines that are involved are ecology or environmental sciences and the social sciences.

The ecological front includes the sub-disciplines of environmental management, earth sciences, environmental sciences, conservation, biology and environmental engineering.

From the social sciences side, I think the relevant areas are business administration, economics, geography, law, political science and sociology – and of course, communication which is extremely important.

Many or most of those disciplines have the word science incorporated into them.

PN: What research subjects at ECCS might affect your operations?

Hunt: It is difficult to say at this early stage.

The centre was only announced on March 27. There is both an internal academic advisory board and an external advisory board.

Those two groups have not yet met. It will be the outcome of those meetings which I think will set the course for the areas that are going to be researched.

The focus is the interface where business meets the environment and communities. I believe triple bottom line decision making will be an overarching theme of the research.

PN: Is this the way companies will have to do business in the future?

Hunt: Absolutely. I think that many leading companies are demonstrating this sort of proactive approach but there is always room for improvement.

Many sustainability practitioners will say that sustainability is a journey rather than a destination.

The work of the ECCS will help provide direction for companies going forward. ɸ Page A16

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Earn and maintain social license to operate ɺ Page A15 PN: What do you hope to accomplish with the Enbridge Seminars in Action?

Hunt: There seminars are going to be held about four times a year, bringing together influential researchers and practitioners and other industry experts to discuss leading edge research on corporate sustainability.

PN: What is the value of corporate sustainability to companies such as Enbridge?

Hunt: All companies have to earn and maintain their social

licence to operate. With respect to Enbridge we are a linear company as opposed to a conventional business with just a few neighbours surrounding their facility.

We have facilities that basically traverse the continent. We have therefore, literally millions of neighbours, so it’s very important for us to consult and be responsive to concerns and queries so that we can earn and maintain our licence to operate in their areas.

PN: How does Enbridge practise corporate sustainability with

the proposed Northern Gateway pipeline project?

Hunt: Sustainability has those three keys areas I mentioned earlier: economics, social and environmental factors.

Consideration of those three factors is inherent in every undertaking that Enbridge has. We pride ourselves on going above and beyond what’s required as a minimum by law.

With respect to our proposed Northern Gateway project, I can think of several examples of corporate

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The first I think has to be route selection. We will avoid environmentally and geo-technically sensitive areas where possible.

We are engaging with all the communities along the proposed right-of-way and that includes First Nation communities.

The intent is to have stakeholders benefit from the project.

With respect to First Nations, we have offered them a stake in the Gateway pipeline, and to date some 40 per cent of Aboriginal groups along the proposed route have signed on to an equity agreement.

We are obviously

hoping for that number to increase.

PN: Will corporate sustainability help Enbridge gain project approval from the National Energy Board?

Hunt: Yes, and hopefully demonstrate that we are we going above and beyond what they require. They certainly don’t require equity agreements, but we feel it’s an important enough project to warrant that.

PN: Can corporate sustainability help to speed up the approval process for major energy projects?

Hunt: It certainly won’t slow it down and can only help the process if a company considers the economic, environmental and social effects of their project in their decision making.

This activity facilitates the identification or risks as well as opportunities, that when addressed, can result in win-win outcomes for the company and the communities involved.

PN: Does Enbridge conduct a lot of a social networking on the Internet for the Northern Gateway project?

Hunt: This is a growing medium now, and if companies don’t utilize that form of communication, I think they are missing out on a significant segment of the population and stakeholders.

If a company is not telling its story, then it’s going to told someone else. Often that will result in a less than flattering narrative.

Stay in tune with media and communication developments.

PN: Do you think corporate sustainability

can limit opposition to the Northern Gateway project?

Hunt: There has so far been what is termed informal hearings in the communities along the proposed right-of- way, some of which have had opposition and critics attend.

Enbridge has a good performance record with respect to sustainability and being a good corporate citizen.

When presented with honest and factual information, I think that people can make informed, reasoned decisions.

PN: Can smallsized companies afford to practise corporate sustainability?

Hunt: If they don’t, I don’t think they are going to be around long.

They will not earn and maintain their social licence to operate.

You don’t get your social licence by just going to government ministries and making an application or simply paying a fee. It requires far more today than just meeting minimum standards.

The term corporate citizen, I think, is indicative that companies now are really part of the communities in which they operate, and as such, they have to behave like any other citizen – responsibly and contributing to that community.

Without local community support, projects are going to have a tough time and may not get off the ground. There is an interesting quote I came across recently: “Government gives us permits to operate whereas society gives us permission to operate.”

PIPELINE NEWS May 2012

A17

Enbridge funds biz research centre at U of C future, we are thrilled to contribute to this important practitioners of corporate sustainability drawn from

By Geoff Lee initiative,” Daniel said. across North America.

Calgary – Enbridge Inc. and the University of The ECCS will also sponsor two annual sustainThe new independent centre will draw on more Calgary will research ways to redefine corporate than 60 years of research and practice related to the ability awards, recognizing student achievements in sustainability ranging from just fostering goodwill areas related to sustainability and the advancement of science of corporate sustainability. in communities to making decisions that consider The ECCS will advance the science and practice the triple bottom line. environmental, social and economic factors. of achieving the triple bottom line in business and in One award will be granted for research or acaThe so-called triple bottom line research will policy taking into account environbe conducted at the Enbridge Centre mental, social and economic factors. for Corporate Sustainability established “This first-of-its-kind centre is March 27 at the U of C’s Haskayne a ground-breaking initiative for the School of Business in downtown Calgary.

University of Calgary and EnEnbridge has committed $2.25 milbridge,” said University of Calgary lion over 10 years to the ECCS, which president Elizabeth Cannon in the will enable graduate student and faculty ECCS launch news release. research, fund post-doctoral fellows, and “The Enbridge Centre for Corsupport the Enbridge Research in Action porate Sustainability showcases the Seminars. power of collaboration in fuelling The seminars will be held at least innovation. four times a year and will bring together “We are tremendously grateinfluential researchers, practitioners, and ful to be working with Enbridge to industry experts to discuss and dissemisupport research that will be widely nate leading-edge sustainability research shared, helping businesses develop in Canada and abroad. and implement sustainable practices Enbridge CEO Pat Daniel said the international scope and focus on sustain- Enbridge Inc. is partnering with University of Calgary’s Haskayne School of Business across many disciplines.”

Cannon noted the long-term able resource development set the ECCS to create a new Enbridge Centre for Corporate Sustainability. Pictured at the launch apart and drew Enbridge to the project. are, from leŌ: Pat Daniel, president, CEO, Enbridge; Dr. Elizabeth Cannon, president, objectives of the ECCS align with “We’re proud to partner with the University of Calgary and Dr. Leonard Waverman, dean, Haskayne School of Business. the Haskayne School of Business’ Photo submiƩed goal to become an internationally University of Calgary’s Haskayne School Enbridge has commiƩed $2.25 million over 10 years to the ECCS. recognized centre of excellence of Business,” said Daniel. for academic integrity, impartial “The ECCS will provide a foundaresearch and community engagement in areas that demic achievement by a graduate student based in a tion for new business practices and decision making define Alberta; namely, ethical leadership, entrepreuniversity in Canada or the United States. processes needed to develop natural resources in a neurship and energy.

The second award will be granted for commuresponsible and sustainable manner.

The ECC will also collaborate with Central nity-level achievement by an undergraduate student “In addition to important research, the ECCS Michigan University and other organizations to enwill also be an incubator for the future business lead- from a Canadian or U.S. university. sure the research and initiatives have an international ECCS activities will be guided by an external ers. scope.

“As a company focused on building a sustainable advisory board comprising leading scholars and

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A18

PIPELINE NEWS May 2012

NuWave technology raises bar on abandonments

By Geoff Lee Marwayne, Alta. – T&T Oilfield Services near Marwayne, Alberta has developed a new well abandonment technology and a new company that makes the process of cutting and capping wellbores safer, quicker and better for the environment.

The new cut and cap technology is operated

by NuWave Industries Inc. and replaces the old method of excavating a wide, deep bell hole around a wellhead into order to cut and remove it at the required depth.

“There is a very big market for it. It’s just a matter of time before all the oil companies jump on board,” said Sandy Cumby, manager of NuWave.

“Our goal is to grow. There are thousands upon thousands of abandoned wells.”

NuWave has already equipped three mobile service units for the field with a fourth unit on the way.

NuWave’s technology consists of a special tool connected to portable abrasive water jet cutting system that is lowered into the wellbore to cut through the casing string internally.

The cold cutting system also eliminates the need for potentially dangerous welding or sparking tools.

T&T Oilfield was abandoning wells the old way by digging them up, until they were challenged by a client to find a more cost-effective method that would be safer for crews and the environment.

Company co-owner Tim Sharp came up with idea with fellow partner Troy Illingworth and

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Troy Illingworth is building another shop for fabricaƟon this month similar to his vehicle shop in the background.

T&T OilĮeld, founded by Illingworth and Tim Sharp, will mark its 10th year of business in June. The company is in expansion phase with the development of a new cut and cap well abandonment technology operated by a new business enƟty called NuWave Industries Inc.

Cumby quickly jumping onboard to research tools and equipment.

“We spent a lot of money to get the most costeffective and user-friendly tool,” said Illingworth.

“We have a special tool made with a patent pending.

“The company was developed by us and the tool was developed by us. We had it built in the States.

We shipped samples down there, tried it and it worked, and brought the tool up here.

“We’ve got it so we basically wear out just one thing. Other companies with products similar to ours will wear out six to seven parts.

“It’s a new invention that we’ve being doing for a year and a half and we are really pushing it hard,” Illingworth said.

“There is a high demand. For every well a company drills, if there are so many that are dead and have to be dismantled then abandoned, they have to get rid of a portion of their abandoned wells to drill new.

“We have rigged up three trucks. It’s working out quite well. We are getting more and more work all the time because no one else does this.

“We have done abandonments for several companies including CNRL, Husky and Cenovus. We just spent the winter in Rainbow Lake and we cut 150 wells,” he said.

The process starts by removing the top of the wellhead and hydrovacing around the wellhead and casing to set up for the cutting unit.

The cutting unit is lowered into the wellhead and cuts through the casing and conductor barrel internally.

The cut wellhead assembly is pulled out of the ground with a backhoe, and a compression fit assembly is used to provide a vented cap for the casing string, with no welding required below ground.

The small hole left behind is backfilled with soil.

The entire process takes approximately two hours to complete and eliminates the need to truck and replace contaminated soil. ɸ Page A19

EURODRIVE

Sandy Cumby is the manager of a new secondary company called NuWave Industries Inc., created by T&T OilĮeld. NuWave is markeƟng and deploying a new cut and cap abandonment technology that is safer for workers and the environment than tradiƟonal abandonment processes.

PIPELINE NEWS May 2012 Éş Page A18 “Most of the wells we cut take 15 minutes to cut and then we are done cutting,â€? said Illingworth. “You are not disturbing the soil and you have no issues with cave-ins.â€?

The cutting material is a harmless mixture of water and 50 grit sand that enables the NuWave tool to cut through steel and concrete with a high pressure pumping system contained in the mobile units. “We can cut from 4.5 inch all the way out to a 36 inch full of concrete – three types of steel in it – and a 36 inch drum all of them full of concrete. We can cut it all.�

Cumby recently introduced NuWave’s cut and cap abandonment technology at the Canadian Land Reclamation Association conference in Calgary to an audience of environmentalists that jumped from 30 to 120 once the word got out. “They loved it. They had never seen anything

like it. They were all very impressed,� said Cumby. “We’ve had a lot of good feedback from those guys.�

Some oil companies are relying on NuWave for abandonments in southern Alberta where prairie leases are close to environmentally sensitive grassland. “They don’t want to disturb it. It’s amazing,� said Illingworth. “Cenovus hosted a demo on it. They were digging it up just like we used to do. “Now, they like our idea and they are promoting it in-house.

Husky absolutely loves it.�

NuWave may expand to other locations

in the near future depending on the demand for work.

NuWave is the latest expansion growth phase for T&T OilďŹ eld that is celebrating its10th year of business in June.

Illingworth and Sharp, who founded the company, are both welders by trade who apprenticed locally. “We wanted to start a company that treated employees dierently,â€?

Illingworth said. “That’s our goal. We have a lot of long term people. We don’t have a high turnover. “The only turnover we have is on the labour side of it. But even the labour we try to apprentice as many as we

can and get guys ahead in life.

T&T has grown to approximately 50 employees and specializes in facility construction, spill response and abandonments. “We like to build

plants for water disposals and sites like that.

We’ve got pipeďŹ tters, welders and gas ďŹ tters, crew trucks and picker trucks,â€? said Illingworth.

Their business card notes they also provide BobCat and backhoe

A19

services and quality control welding in Alberta and Saskatchewan.

The company began construction in April on a new 60 by 100 ft. shop in their 5.5 acre yard. “We need areas in the winter time for welders to go and fab and do all their pressure testing inside a controlled environment,� said Illingworth.

The tradiĆ&#x;onal way of abandoning a well requires digging a wide, deep hole that a welder would jump into to cut oÄŤ the wellhead.

In addiĆ&#x;on, the excavated soil has to be cleaned and replaced at great expense.

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PIPELINE NEWS May 2012

Community spirit raising Marwayne’s proÀle

Rebecca Oakes, who works as a community development oĸcer for Marwayne, is excited by the strong community spirit of the village that has come together to plan for future growth from the oil and gas and agricultural sectors.

Major projects on the go this summer are the Įrst phase of a downtown revitalizaƟon project and the grand opening of the new Agri-Plex community hall and village oĸce. More and more young families are making Marwayne their home.

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Story and photos by Geoff Lee Marwayne, Alta. – No man is an island. That expression rings true in the Village of Marwayne, Alberta where all 612 residents benefit from the work of volunteer groups that move the community forward.

Tangible results of local community spirit in action include the ongoing construction of a new $3.2 million Marwayne Agri-Plex project featuring a new 400-seat community hall and redeveloped campground in the parking lot area.

The project includes renovations to the lobby of the Marwayne Arena with all of the work and fundraising being led by the Marwayne Agri-Plex Task Force.

The task force of volunteer groups is planning a June 22 grand opening of the community hall that will also house the new village office and the local agricultural society.

Entertainment will be provided by Danny Hooper, a well-known Alberta country singer and motivational speaker.

Tickets to the gala grand opening go on sale following Marwayne’s first professional bull riding event and fundraiser at the Marwayne Arena on April 27.

Details of these community events are posted on the Village’s new website designed with the goal of attracting and retaining new businesses and families to the area.

This summer, construction will also begin on the first phase of a revitalization plan driven by the need to replace old water and sewer lines on Centre Street in the downtown business core.

Helping to lead the charge on these strategic projects is community development officer, Rebecca Oakes, who is tasked with helping local non-profit groups and service organizations cut through red tape. ɸ Page A21

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PIPELINE NEWS May 2012 ɺ Page A20 “In small communities, business, municipal government and non profits – if they don’t work together and get all of the arrows moving in the same direction, they will work against each other,” said Oakes who fills a consulting role for the village.

“To take on a new community hall, a Centre St. project, or a new website, or even the new arena addition – that’s at least $500,000 – you need some supports underneath you. That’s what this position is about.”

The new Agri-Plex project is touted by Oakes as a being a major economic driver that is designed to serve as a community hub.

“The people planning that hall didn’t just think about a building, they thought about the impact and all the services it would house to meet those services,” she said.

“It started with a community needs assessment study and a feasibility study and asking how do we maintain our infrastructure because small towns are really struggling with that?

“We have raised $2.9 million of that money. That’s a huge testament of support.”

The project fits Marwayne’s strategic priorities to plan for growth and change led by growth in the agriculture and oil and gas industries along the busy Highway 897 oilfield corridor between Lloydminster and Cold Lake.

Marwayne’s population soared 17.5 per cent during the past five years according to the latest figures – more than double the rate of similar sized communities in Alberta.

“That obviously means we are doing something right,” said Mayor Jenelle Saskiw.

“For the most part, it’s oil and gas industry. What we are finding is we are the nice little community where the husband can go off to work and the wife can stay at home with the family and be a stay-at-home mom.

“We have a fantastic school; we have a great recreation program, and a strong hockey community – that’s attractive to a lot of families.”

Marwayne minor hockey teams have won five provincial titles in the past three years including two this year.

Community development and strategic planning are keys to keeping up with growth especially from the oil and gas industry in the region according to Saskiw.

“We are expecting a major boom, and with that, we are being progressive and anticipating some more growth in Marwayne.

A21

We have to be prepared. It’s better to be proactive than reactive,” she said.

“What we are doing is realizing that, as a small village, we have to be progressive and keep up with the pace of the province. We can’t stay stagnant, otherwise we will die just like a lot of other small communities.

“We are a very young community. The majority of our population is under the age of 45. That’s unheard of for a small community. We are young; we are vibrant. We are forward thinking,” added Saskiw.

Saskiw is counting downs the days to the grand opening of the community hall and moving the village office into the new complex located at the south end of Marwayne.

“We cannot wait. I look at it as a real stake in our community. It’s someplace we can play, celebrate and mourn. Every community needs that centrepiece that is going to draw everyone for a common purpose,” she said. ɸ Page A22

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PIPELINE NEWS May 2012

A lot of potential yet to be uncovered Éş Page A21 â&#x20AC;&#x153;That hall was built by volunteer work. It was a dream a few people had about four or ďŹ ve years ago. For it to come to life on complete community spirit â&#x20AC;&#x201C; thatâ&#x20AC;&#x2122;s amazing.â&#x20AC;?

Planning engineers employed by Genivar have issued 2D renderings of the overall downtown revitalization plan designed to attract new retail, commercial and industrial growth.

The highlights of Phase 1 include boulevards with green space, wider sidewalks, new light standards, parallel parking and renderings for aďŹ&#x20AC;ordable upgrades to storefronts.

The village is working with Community Futures to assist main street businesses to access funding to make improvements to their building exteriors. â&#x20AC;&#x153;We have also done a historical inventory and gotten certain buildings on historical registers which means more grant opportunities for those business

owners,â&#x20AC;? said Oakes. â&#x20AC;&#x153;The water and sewer upgrade has put this on a priority.â&#x20AC;?

Marwayne is also negotiating to purchase new land for industrial lots following the sale of its existing ďŹ ve acre parcel of land for industrial development. â&#x20AC;&#x153;We would like to build an industrial area in Marwayne,â&#x20AC;? said Saskiw. â&#x20AC;&#x153;It would be a perfect location being on the corridor between Lloydminster and Cold Lake. We are trying to attract oil and gas service companies. Thatâ&#x20AC;&#x2122;s what the basis of this area is all about.â&#x20AC;?

Marwayne currently has 16 serviced residential lots for sale in its Diamond Estates subdivision with separate sections for single detached homes and RTMs. The village is also trying to promote the potential for commercial development near the intersection of Highways 897 and 45 with oilďŹ eld traďŹ&#x192;c counts on the rise. â&#x20AC;&#x153;Our last traďŹ&#x192;c study saw a signiďŹ cant increase. The ratio of trucks to cars was about three to one,â&#x20AC;? said Saskiw. â&#x20AC;&#x153;You always dream of the future. I see that traďŹ&#x192;c and think it would be great to have a hotel or motel built along this stretch of the highway. â&#x20AC;&#x153;There is really no place for a lot of the truckers to stop. I think we have a lot of potential yet to be uncovered,â&#x20AC;? she said.

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PIPELINE NEWS May 2012

A23

Birdies, bogeys, barrels of laugh in store Lloydminster – The 7th annual PWM Steel Petroleum Golf Classic in is coming up fast.

This year’s event, to be played May 25 at the 18-hole Rolling Green Fairways in Lloydminster, promises to be another one of those unforgettable sporting moments for the 156 oilfield women who have registered to play.

This wildly popular event is billed as day of camaraderie and networking and an opportunity to help raise $25,000 for the Lloydminster Sexual Assault Centre.

Ladies of the Patch committee chair Debbie Horbach says the event is sold out but she is hoping to squeeze a few more teams onto the course as her phone keeps ringing.

“We are full and we have a waiting list. We are just in the process of talking to the golf course to see if we can get some more teams out there because we’ve got so many girls,” she said.

The call is also out for door prizes and sponsorships that the committee has little trouble rounding up each year as the reputation of charity sponsorship grows.

“Not only do we support the Sexual Assault Centre, but it’s a day of fun and networking for all the women who work in the patch. That’s one of the reasons why we get so much support,” said Horbach.

Over the six previous years, the tournament has raised more $125,000 for Sexual Assault Centre.

“The oilpatch is very supportive. You have to remember this is the only event of its kind that is geared toward the female element of the oilfield,” added Horbach.

“I think the oil companies and the service companies appreciate the fact that there is something out there for the ladies of the patch to do.”

Platinum, gold, silver and bronze sponsorships are for sale with more information and comments found on Facebook by searching Lloydminster Ladies of the Patch Golf Tourney.

This is the first year organizers have used the social networking site that includes links to the registration form and player comments.

“It’s been quite good. It’s a quick and easy way to get information,” said Horbach who was fresh from a two week golf vacation in Phoenix when contacted on April 4.

Horbach is hoping this year’s PWM tournament with be played under the same warm Arizona-style weather conditions that greeted players in 2011.

Rolling Greens reports they have redesigned the second and 12th hole tee boxes and planted more than 100 trees last fall with another 100 to be planted in 2012.

The putting green is also being revamped, but won’t open for play until June.

This year will mark the second in a row the PWM tournament has been played at Rolling Green where red carpet treatment from management has brought them back.

“The service out there was terrific. The meal was good. They just treated us very well,” said Horbach.

Rolling Green is located at the Highway 16 turnoff to Range Road 13, one mile west of 75th Avenue in Lloydminster.

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A24

PIPELINE NEWS May 2012

Riverhill keeps oilÀeld work close to home Marwayne, Alta.

– Doug Ford never ventures far from his home near Marwayne for work and he’s home for dinner. That’s the way he likes it for his 25 employees too.

Ford is the owner of Riverhill Enterprises Ltd., an oilfield pressure welding business that he has operated at a nearby acreage southwest of Marwayne for the past 35 years.

“Most of our business is right here,” said Ford. “Most of the guys are home every night.

“Usually the guys will go out to the facilities and see what they have to fix up or do, and take their measurements, and order their materials and then come back to the shop.

“They prefab it and get it ready to be installed, and go through that cycle again.”

The Riverhill business footprint takes up five acres with numerous workshops, vehicle sheds and outdoor storage of oilfield equipment in the yard.

“We do oilfield con-

struction and maintenance with Alberta and Saskatchewan quality controls for pressure piping in the batteries and facilities and that kind of stuff,” said Ford.

“We do welding and pressure testing. We are welding schedule 40, 80, 160 piping dimensions – anything from two- inch to 12-inch diameter.”

In the welding and pressure shop, piping is X-rayed, pressure tested with water, and sent to Christie Corrosion Control or Global Fu-

Riverhill Enterprises owner Doug Ford holds up a Ňange spool that has been welded, X-rayed, and pressure tested along with the root grinded. The part will be sent to Wainwright for coaƟng and installed with other parts to replace exisƟng lines in a facility or baƩery.

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“The pressure tests range from 427 lb. up to 1,100 or 2,220 lb. depending on what series they need to have,” explained Ford.

“They get pressure tested and are recorded on a chart to have the documentation to go with the piping.”

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Riverhill also has a fleet of picker trucks including one five-ton, three seven-ton and three 30-ton vehicles along with three oneton cranes equipped on F-550 crew trucks.

“Picker trucks are the basis of what goes on. Almost everything big and heavy has to get installed somehow,” said Ford.

Riverhill does most of its work close to home for a core of about eight oil companies with CNRL as their best customer.

CNRL stores some of their gas shacks in the yard.

“They don’t get to use them that much anymore because they are not doing that type of work anymore,” said Ford.

“They’re here if they ever get a chance to use them. There is a lot of oil activity in the area.

Gas is pretty minimal.

“We also store a bunch of tanks and gas shacks and a bunch of pipeline for the CNRL guys so they have extra pipe for road bores and road crossings.

“There gets to be quite an accumulation of stuff, especially if someone knows we can prefab it here before we have to take it out to the field. We can store it here then work on it, then take it out to the field.”

Riverhill also does a lot of oilfield construction and maintenance work in the area for Newalta.

Ford said what sets his company apart from others are his employees in a competitive job market.

“The biggest thing we’ve got for us is that we’ve got some employees who have been here for just about as long as I have been,” he said. ɸ Page A25

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PIPELINE NEWS May 2012

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ɺ Page A24 “It’s good to have them around. They treat me good. That’s the best part.”

Riverhill employs journeymen welders, pipefitters, crews and journeyman crane operators.

One of the company’s newest employees is Tanner Sayer, a welding apprentice, who just completed his second year of schooling at Lakeland College in Vermilion.

“I do pipe racks, help journeymen welders, get sent out on jobs and help the electricians a lot with struts and whatnot and help them with fire tubes,” said Sayer.

“I enjoy it very much so. There were 16 people in my class and the first year and third year were full too.”

Ford confirms Sayer is working out well and recalled his own youthful beginnings in the oilfield in Fort McMurray where he worked from 1969 to 1977 doing construction and maintenance for Suncor and Syncrude.

He saved enough money to buy a welding truck and land to start his Riverhill oilfield company.

“I managed to pay for all my stuff before I moved out of there. That was a bonus for me,” he said.

“I have been back quite a few times. I have never worked there, but I have gone back to visit and stuff. It was an interesting place. I would have gladly stayed there if I could have. It was an interesting time to be there.

Ford laments that so many rules and regulations have taken the fun out of the business today.

“Other than that it’s about the same. There’s a pretty severe set of stuff that has to be followed,” he said.

As for retirement, the 63 year-old said, “If If I can get someone to do what I am doing, I will certainly go do something else.”

Ford has plans for his 29 year old son Brady who operates the 30-ton crane to eventually take over the helm of the business.

“I would hope my son will have a crack at it if he wants to,” he said.

“It will be one of these things. We will give him a try.

“He’s interested – if he we can get him going in the right direction,” he joked.

Riverhill welding apprenƟce Tanner Sayer cuts members for a pipe rack outside the Riverhill Enterprises welding and pressure tesƟng shop near Marwayne.

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PIPELINE NEWS May 2012

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Devon Safety Expo to follow NAOSH Lloydminster – Worker safety will be the focus in communities across Western Canada including Lloydminster as North American Occupational Health and Safety week is celebrated May 6 to May 12.

NAOSH Week is led by the Canadian Society of Safety Engineering and community partners such as the Lloydminster Construction Association and the Lloydminster Regional Safety Committee.

This year’s theme “Making It Work” will be a feature message as occupational safety and health professionals gather to celebrate the launch of NAOSH Week and reaffirm their commitment to health and safety.

The City of Lloydminster will help mark the occasion with a Day of Mourning and flag lowering

at city hall on April 27 to honour workers who were killed or injured on the job.

There were 123 Alberta worker deaths in 2011.

The City will officially proclaim NAOSH Week during a signing ceremony on May 7.

The Lakeland Regional Safety Committee will help to promote safety in the workplace, at home and in the community during a free fire extinguisher training program on May 8 at the Lloydminster Communiplex.

The training sessions will be led by the Lloydminster Fire Department chief and will include discounts for recharging fire extinguishers.

Companies are also invited to purchase a sponsorship to support NAOSH activities aimed at promoting the importance of preventing injury and

illness in the workplace and raising understanding and awareness of safety and health issues.

In a related safety matter, the Lloydminster Exhibition Grounds will host a Devon Safety Expo on June 2 to promote family and community safety.

More than 30 interactive displays featuring camping, water, fire, chemical and workplace safety will be set up at the Wild Rose Pavilion. The displays are targeted to families. There is no admission charge.

The event will include both indoor and outdoor activities, door prizes and a barbecue lunch from noon to 2 p.m.

The Devon Canada Expo will be held in partnership with the Lloydminster Construction Association and the Lloydminster Regional Safety Committee.

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PIPELINE NEWS May 2012

No April fool land sales with drilling surge Regina – Flush with land and awash in oil.

That’s a familiar story for the oil and gas industry in Saskatchewan retold in the April sale of Crown petroleum and natural gas rights that generated a modest $16.4 million.

Energy and Resources Minister Bill Boyd said it best in his post-sale conclusion that companies are focusing more on drilling on their current depositions this year than acquiring large parcels

of exploration land.

“Our land sale revenues have been fairly consistent over the past five sales, averaging $20 million a sale,” Boyd said.

“This sale continues a trend we've seen of companies concentrating on working their considerable existing dispositions and adding to their land inventories in the recent sales.

“Last year was our second-best for both oil production and oil well drilling, and more than

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5,000 oil well licences were issued in 2011.

“With drilling ahead of last year's pace, 2012 is shaping up to be an excellent year for activity in our oilpatch and these new acquisitions by industry will only increase that activity.”

April’s sale included 173 lease parcels that brought in $16.3 million in bonus bids and one petroleum and natural gas exploration licence that sold for $160,500.

The April sale, the second of the year, brings year-to-date land sales revenue to just over $45 million.

The Weyburn-Estevan area received the most bids with sales of $11.5 million. The Lloydminster area was next at $2.2 million, followed by the Swift Current area at $1.4 million and the Kindersley-Kerrobert area at $1.3 million.

The highest price for a single parcel was $1.6 million. Federated

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Co-operatives Limited acquired this 259-hectare lease parcel northeast of Carlyle.

The highest price on a per-hectare basis was $12,159. Scott Land & Lease Ltd. bid $196,860 for a 16-hectare lease parcel northwest of Edam.

The next sale of Crown petroleum and natural gas dispositions will be held on June 4, 2012. Oil sands exploratory permits will also be offered in the June sale.

Weyburn-Estevan area The top purchaser of acreage in this area was Federated Cooperatives Limited, that spent $2.4 million to acquire six lease parcels.

The top price paid for a single lease in this area was $1.6 million by Federated Co-operatives Limited for a 259 hectare parcel situated four kilometres east of the Fremantle Lower Watrous Pool, four kilometres northeast of Carlyle.

This is the highest dollar per hectare in this area at $6,249/hectare.

The top price paid for a single licence was $160,512 by Standard Land Company Inc. for a 2,331 hectare block

located 13-kilometres north of the Ceylon Bakken Sand Oil Pool, 20-kilometres northwest of Radville.

Lloydminster area The top purchaser of acreage in this area was Zeal Energy Inc., spending $753,000 to acquire three lease parcels.

The top price paid for a single lease in this area was $451,000, paid

by Zeal Energy Inc. for a 64.75 hectare parcel situated within the Edam West Mannville Sands Oil Pools, 33 kilometres northeast of Maidstone.

The highest dollar per hectare in this area was received from Scott Land & Lease Ltd. that paid $12,159/hectare for a 16.19 hectare parcel located within the Mervin East Waseca Sand Oil Pool, 15-kilometres southeast of Turtleford.

Swift Current area The top purchaser of acreage in this area was Lexterra Land Ltd., acquiring eight lease parcels for $721,511.

The highest price paid for a single lease in this area was $311,577

by Lexterra Land Ltd. for a 259 hectare parcel situated adjacent to the

Java North Cantuar Sand Oil Pool, 8-kilometres west of Swift Current.

The highest dollar per hectare in this area was received from Husky Oil Operations Limited and Taqa North Ltd. who paid 50/50 at $1,538/hectare for a 65.15 hectare parcel located within the Java Cantuar Sand Oil Pool, 13-kilometres west of Swift Current.

Kindersley-Kerrobert area The highest purchaser of acreage in this area was Standard Land Company, acquiring one lease parcel for $615,356.

The top price paid for a single lease in this area was $615,356, paid by Standard Land Company Inc. for a 259 hectare parcel situated adjacent to the Plato North Viking Oil Pool, 8-kilometres northeast of Eston.

The highest dollar per hectare in this area was received from 592624 Alberta Ltd. that paid $3,809/hectare for a 16.19 hectare parcel located within the Luseland Bakken Sand Oil Pool, 25- kilometres northwest of Kerrobert.

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PIPELINE NEWS May 2012

Hull dangles media and paparazzi

Lloydminster – NHL Hall of Fame player Brett Hull was the talk of the town in Lloydminster on April 18. He and former NHL player Kelly Chase entertained a predominantly oil and gas crowd during the Allan Cup luncheon and fundraiser at the Lloydminster Exhibition Grounds.

The Pipeline News fired a few quick questions at Hull before he was mobbed by private paparazzi seeking personal photos with him and the Stanley Cup. PN: Are you excited about coming here today?

Hull: Absolutely, it’s a great cause. The Allan Cup is a great tradition in Canada – all the people that support it – it’s a great day.

PN: If you didn’t play in the NHL, would you like to have played in the Allan Cup? Hull: I would be in the Allan Cup if I didn’t play.

PN: A lot of guys who play in the Allan Cup are supported by oil companies. What do you think about that?

I think it’s great. I lived in Dallas and oil and gas is huge down there so it’s great that they support the Allan Cup and the players.

PN: When you played for the Calgary Flames, did you do a lot of events for oil companies?

Hull: No, I wasn’t in Calgary long enough to do anything!

Pipeline News sales representaƟve Randi Mast posed with NHL Hall of Fame player BreƩ Hull and the Stanley Cup (beside the Allan Cup not shown) during the Allan Cup luncheon on April 18 in Lloydminster.

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PIPELINE NEWS May 2012

Logan to go Àshing for revenue in 2012 Calgary – Logan International Inc. expects its fishing tools business will continue to get a lot of bites from customers in 2012.

The Logan Oil Tools fishing division is proving to be one of Logan’s strongest businesses following the release of its fourth quarter and 2011 corporate results on March 30.

“Our fourth quarter provided a mixture of good news and disappointing news,” said David Barr, president and chief executive officer.

“Our fishing tool business continued to exceed our expectations; order flow, backlog and revenue all point to strong industry fundamentals and excellent execution by the management.”

On the downside, the company experienced disappointing operating results in the fourth quarter from its Logan Completions Systems business due to technical problems.

“We learned that certain well conditions require modifications to the MultiStim tool and installation procedures and we were distracted from our day-to-day ‘non-MultiStim’ business,” said Barr.

“We have since replaced certain members of the senior management team; we have strengthened the MultiStim product and field installation procedures and we have re-emphasized our conventional completions day-to-day business.

“However, we do not expect a meaningful financial turnaround until our third quarter,” Barr said.

Logan made a profit of US$ 1.6 million from operations in the fourth quarter with $37.3 million in revenue compared to a $2.1 million profit and $31.8 million in revenue in the fourth quarter of 2010.

The company reported total revenues of US$135.5 million in 2011 compared to $108.6 million for 2010.

Logan completed the acquisition of Kline Oilfield Equipment and Lloydminster-based Scope Production Development in the fourth quarter.

“Each generated positive returns relative to our expectations for the quarter,” said Barr.

“Dennis Tool made progress both in the introduction of its radial bearing product line and in its pursuit of new international customers.”

Looking ahead, Barr said he expects the Logan Oil Tools business to remain strong in 2012 and he anticipates the company’s PDC insert business (Dennis Tool) to recover along with projected “solid operating results” for Logan’s new Kline Oilfield and Scope Production acquisitions.

The company also completed the acquisition of Okotoks-based Xtend Energy Service Inc. on March 1.

Xtend has developed a proprietary tool that enhances horizontal drilling effectiveness by introducing a variable frequency into the drill string that is designed to mitigate the effects of well-bore friction.

Xtend introduced the tool into the Canadian market in 2004 and has experienced solid customer acceptance and growth according to Barr.

“I believe the acquisition of Xtend adds to our reputation of being a leading worldwide supplier of downhole products and services and expands our presence into the drilling segment of the industry,” said Barr.

Xtend introduced its tools in the Eagle Ford shale in South Texas during the first quarter of 2012 and anticipates strong growth in the U.S. market.

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B-SECTION May 2012

Bur a s ep y e yin d o s uc a g CO2 an go

By Brian Zinchuk Estevan – While carbon capture and storage is considered one of the leading strategies to reduce greenhouse gas emissions, one of the fundamental questions behind CCS is where do you put the carbon dioxide once you’ve captured it?

It can be used for enhanced oil recovery, as evidenced by the successful WeyburnMidale project, but depleted oil reservoirs aren’t nearly as prevalent as the number of large carbon emitters.

An alternative strategy in geologic storage is to pump the CO2 into deep saline aquifers.

Thus, the Petroleum Technology Research Centre’s Aquistore project was born.

As the $1.24 billion Boundary Dam carbon capture project rises south of Estevan, Aquistore’s work has begun in earnest.

Field work began in February. An open house explaining the project was held at the Saskatchewan Energy Training Institute on April 11. (See related story page ???)

Plan B The original plan was to have Aquistore done just outside of Regina, using carbon dioxide captured from the Consumers Co-operative Refinery complex. The project even appeared on a Discovery Science Channel

This is an arƟst’s rendering of the straƟgraphic column under which Aquistore will operate. At the very top is the Boundary Dam Power staƟon. At the very, very boƩom, is where the CO2 will go.

Graphic submiƩed

program called Innovation Nation, with the refinery cited as the source.

However, regulations that would have spurred a carbon capture facility at the refinery have been slow in coming. “We had time constraints, and we had to have a CO2 supply confirmed,” explained Dr. Malcolm Wilson, CEO of the

PTRC. “We transferred this project to where the CO2 would be.”

Wilson was a member of the Intergovernmental Panel on Climate Change that won Nobel Peace-Prize in 2007.

The geology is similar to that which would have been used at Regina, but it’s approximately 1,000

metres deeper. It’s also the same formation Shell is using for its Quest carbon capture and storage project in Alberta.

For over a decade at Weyburn and Midale, carbon dioxide has been used for enhanced oil recovery (EOR). That gas has been captured at the Dakota Gasification plant near Beulah,

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North Dakota, and been pipelined to the Weyburn and Midale fields, operated by Cenovus and Apache, respectively. The PTRC has provided the scientific study for the project, and is in the process of finalizing its best practices manual derived from that research.

As a miscible flood, the carbon dioxide

washes the oil from the rock, dramatically improving oil recovery factors in the otherwise depleted oilfield. Once the oil recovery phase is complete, the CO2 used will remain underground, storing it, hopefully for eternity.

As a strategy for getting CO2 out of the atmosphere and into the ground, the concept works. But writ large on a global scale, there’s a problem, according to Wilson.

There’s a lot more CO2 generated than there are depleted oil reservoirs to put it in.

“There is not enough EOR potential to use all that CO2.

We have to be ready to store it as well,” he said.

There are also times where, even if used in EOR, the recipient may not be able to receive all of its intended CO2. The injection end may not be fully up to capacity yet, or other issues, like maintenance, may require a curtailing or shut down of the CO2 flow to the oilfield.

So what does a facility that’s capturing all this CO2 do with the surplus? They need someplace else to put it, like Aquistore.

“It’s the lifeboat,” Wilson said. “It makes sense to have that lifeboat.” ɸ Page B2

B2

PIPELINE NEWS May 2012

$22 million research project underway near Estevan

A seismic worker lays out cables and geophones for the Aquistore project, west of Boundary Dam Power StaƟon. The triangular device on the cable behind him is a geophone.

Photo submiƩed

ɺ Page B1 He sees similar injection wells as a standard feature for large carbon capture projects. The CO2 generator, in this case, SaskPower, would be reluctant to turn off their capture plant, so excess CO2 can be sent into the Aquistore injection well instead.

The injection well Aquistore will use will be able to take approximately 80 per cent of the 3,000 tonne per day output of the Boundary Dam Unit 3 carbon capture facility. As for the remaining 20 per cent, they may have to dial back the plant somewhat if necessary.

Seismic baseline Before any drilling begins, it was important to establish a baseline 3-D seismic survey. This took place in February and March. The survey included a mix of techniques, using dynamite charges for some of the survey, and vibroseis trucks for the rest. The outlying areas were done with a typical temporary array, but closer to the wellsite, a permanent three-dimensional array had been installed.

Other environmental monitoring, specifically surface and subsurface water, will also take place this year. (See related story page ???)

Where it’s going The Aquistore injection well will be approximately three kilometres due west of the Boundary Dam Power Station, on reclaimed coal mine land owned

by SaskPower.

The CO2 captured at Boundary Dam going into the Aquistore injection well is destined for the lowest two formations in the stratigraphic column – the Deadwood and Winnipeg sands. Above them is the Icebox shale, which Wilson described as a “really impermeable formation.”

“We talk of a storage complex. The bottom is the Precambrian. The top is the Icebox.”

Estimates indicate they have approximately 140 to 150 metres from the basement to the Icebox.

Three 18-metre cores are planned, with one covering the transition from the Icebox to the Winnipeg, and two more in the Deadwood.

Well design Injector wells are rather common, be it for water or even CO2 in the Weyburn and Midale fields. But the Aquistore injector will be a hole unto its own. ɸ Page B3

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PIPELINE NEWS May 2012

B3

Numerous sensors part of research package

A permanent network of geophones placed on SaskPower land will allow for regular monitoring of the Aquistore project.

Photo submiƩed

ɺ Page B2 “It’s a research project. We’re going to go for overkill on this well. We’re going to do the Cadillac version to make sure it will work, and work well.

First of all, they are going right to the “basement” with it, the Precambrian bedrock upon which the sedimentary column sits. That makes for a well about 3,400 metres straight down.

Secondly, the well is a lot bigger than most. It will be full-bore, right to the bottom, with 7-5/8 inch casing, again, right to the bottom. Wilson said they would be using “good quality casing,” and CO2 resistance cement. Inside will be 4-1/2 inch tubing.

What really makes this well special is the sensor package. There will be sensors installed along the outside of the casing. They will measure pressure and temperature, and be connected with fibre optic lines strapped to the outside.

But for all the impressive equipment going on this well underground, it will be nearly indistinguishable from other wells on the surface.

The injection well is anticipated to take 45 to 60 days to drill. The hope is for drilling to start June 1.

A second monitoring well will be drilled nearby, offset approximately 75 to 100 metres to the northeast. That’s the expected direction of carbon dioxide in the reservoir. Its purpose is to monitor the project.

Also going to right to the Precambrian basement, this second well will be equipped with two fluid sampling tubes, one in the target formation, and one above.

Seismic sensors will be placed along the length of the well. Combined with the installation of a the permanent surface array, the well sensors will allow for seismic data collection in all three axis for a true three-dimensional picture.

Next steps “We currently have $22 million, which takes us through to the end of 2012,” Wilson said.

The bulk of the project’s money will be spent this year, doing the initial seismic work and environmental studies, and drilling the injection and monitoring wells.

“That takes us to the injectivity test,” Wilson said. They will truck in 1,000 tonnes of CO2, approximately one-third of the daily output of the plant, and inject it into the well.

Then the project will be largely in a holding pattern until the capture plant begins producing CO2 in earnest. It’s scheduled to be operation in the second quarter of 2014. “My guess is the pipeline from the plant will be built next year,” he said.

A new era begins in the sharing of oil and gas business information

The Petroleum Registry is now live!

Saskatchewan is modernizing its oil and gas business processes, making it easier for companies to share important information on their operations with the government and with partners in the industry.

We’re part of the Petroleum Registry, an organization that supports Canada’s upstream oil and gas industry. The registry is now “live” in our province, and companies can enter their oil and gas infrastructure, volumetric, valuation and royalty-related information online.

It’s a great new way of doing business, and a great new way to support an oil and gas industry that’s thriving, not only here but across the West.

If your company is in the oil and gas business, these are your contacts for more information: • Registry Service Desk 1-800-992-1144 petroleumregistry.energy@gov.ab.ca www.petroleumregistry.gov.ab.ca

• Ministry of Energy and Resources Support 1-855-219-9373 SERSupport@gov.sk.ca www.er.gov.sk.ca

B4

PIPELINE NEWS May 2012

Public gets its Àrst look at Aquistore research project

Above: The auditorium of the Saskatchewan Energy Training InsƟtute proved to be an excellent seƫng for the Aquistore open house on April 11.

Doug Nixon, associate manager of the Boundary 3 Carbon Capture Project, spoke to the Estevan Chamber of Commerce luncheon on April 11.

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Story and photos by Brian Zinchuk Estevan – On April 11, the Petroleum Technology Research Centre held an open house at the new Saskatchewan Energy Training Institute, highlighting the new Aquistore project for the public.

It was a full court press, with booths from PTRC, Schlumberger and SaskPower ringing the glass-walled auditorium.

“We’ve got half the PTRC staff here plus most of our technical advisers, plus our main sub-contractor, Schlumberger,” said Dr. Malcom Wilson, CEO of the PTRC. The open house followed an Estevan Chamber of Commerce luncheon that featured Wilson and SaskPower’s Doug Nixon, associate manager of the Boundary 3 Carbon Capture Project, as the speakers.

According to Wilson, it’s very important to have a discourse with the public. “One of the things that’s been a problem with storage projects through the world is inadequate local learning,” he said.

The goal is to have no surprises for the community, and no surprises for the land owners.

“We’ve seen a fairly positive reaction to this approach. It’s important the community is aware what we’re doing.”

Ray Frehlick was one of the people who attended the open house, at the personal invitation of Wilson. Frehlick, through his varied companies over the years, has an intimate knowledge of the processes going on with Aquistore. He also knows the value of holding open houses. ɸ Page B5

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B5

Doug Nixon of SaskPower, leŌ, Malcolm Wilson of the PTRC, and MP Ed Komarnicki met during the open house for the new Aquistore project. Komarnicki noted the Government of Canada, through Natural Resources Canada, has invested $9 million under its ecoEnergy Technology IniƟaƟve and $5 million through Sustainable Development Technology Canada (SDTC) for a total of $14 million dollars to the Aquistore Project.

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Ray Frehlick, leŌ, heard from Aquistore project manager Kyle Worth, right, on how the project will work.

ɺ Page B4 Frehlick used to be the chairman and largest shareholder of Plains Environmental, which several years ago established at oilfield waste storage cavern just south of Melville in a former SaskEnergy cavern.

“When we built that facility in Melville, we held open houses for a month, and we’ve never had a complaint,” he said.

“If you didn’t have open houses, the general public would be whiny.

“What they’re doing is a tremendous idea. It will be eyed around the world.

Estevan and the PTRC are eyed around the world.

“I think it’s an excellent idea, because they’re going to store CO2 in the Winnipeg sands, close to 3,300 metres deep. It’s a formation that can take all sorts of gas. There’s no way the gas will come to the surface,” he said.

Frehlick pointed out that potash mines use the same formation to dispose of brine.

He noted there are so many formations between those sands and the surface, including the prairie evaporite, that CO2 will stay where it’s put. The prairie evaporite is where Plains Environmental has its storage cavern.

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PIPELINE NEWS May 2012

Get the baseline studies done Ă&#x20AC;rst, U of A hydro geologist stresses Â&#x201E; By Brian Zinchuk Estevan â&#x20AC;&#x201C; There are some times when an ounce of prevention is really worth a pound of cure.

In the early days of the WeyburnMidale CO2 project, University of Alberta Professor Ben Rostron, of the Department of Earth and Atmospheric Sciences, insisted environmental testing be done ďŹ rst to provide a baseline data set. Rostron was one of

the many scientists working with the Petroleum Technology Research Centre (PTRC) monitoring the project.

That insistence would pay oďŹ&#x20AC; over a decade down the road, when Cameron and James Kerr of Goodwater got a lawyer and went public in January 2011 with concerns about what they thought was possible CO2 leaking from underground and onto their farm. Rostron found himself

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digging for those old reports to clarify just what, if anything was going on at the Kerr farm. The conclusion: nothing was going on.

Now as one of the science advisers on the PTRCâ&#x20AC;&#x2122;s Aquistore project south of Estevan, Rostron is gearing up for a busy summer doing similar baseline work. One student working under him is going to be spending a lot of time getting samples taken and monitoring in place. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m a member of the science and engineering research committee,â&#x20AC;?

Rostron said. His group is charged with working on the drilling, operations and monitoring of the project. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re the science behind the research of the project.â&#x20AC;?

Rostron is also president of Isobrine Solutions, an Edmonton-based company that focuses on the analysis of isotopes to identify what geological formations water comes from. The company is a spin-oďŹ&#x20AC; of the research he and others have done over the years, and has been reported on in previous editions of Pipeline News. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m a hydrogeologist. We need to understand the chemistry of the water, and which way it ďŹ&#x201A;ows,â&#x20AC;? he said of the water in the Deadwood formation where the CO2 is destined. â&#x20AC;&#x153;We

can show thereâ&#x20AC;&#x2122;s no communication between the water in the reservoir and the surface water.

The monitoring regime will include keeping an eye on ponds and dugouts, drinking water, and shallow farm water supplies.

A series of several dozen shallow monitoring wells will also be installed at the surface in a pattern that is dense near the injection well, and more spread out the further you move away from it. Part of that pattern will be on land disturbed by surface mining, and the remainder will be on undisturbed land.

During an open house held in Estevan on April 11, Rostron met the farmer whose land is right across the road from the injection well. They will seek permission to sample the farmerâ&#x20AC;&#x2122;s wells on a periodic basis.

Vertical proďŹ les will be measured as well, in clusters of wells close together, but at varying depths.

The monitoring wells are quite small, just an inch across, with a sealed metal slug that contains a variety of sensors. The void between the plastic well casing and the wall of the hole will be ďŹ lled with bentonite clay and cement. ɸ Page B7

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Dr. Ben Rostron holds up a sensor that will go into a shallow well to monitor water parameters.

Photo by Brian Zinchuk

ɺ Page B6 “We’ll have a weather station measuring humidity, wind, rainfall,” Rostron said.

Rostron’s experience in monitoring geologic CO2 storage goes back to the start of the Weyburn-Midale project, which is operated by Cenovus and Apache respectively. “I was involved with the Weyburn project for 12 years, the most recent seven years as a theme leader,” he said, adding he was one of the

authors of the PTRC’s response to the Kerr allegations.

It was good to have baseline monitoring “in your pocket,” he said.

Initially groundwater sample monitoring was done twice a year, but that was scaled back over the years.

“You want to make sure the public is satisfied you’re looking after their interests. If anything happens, you can tell them what’s going on,” Rostron said.

“I spent the last

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year travelling to a lot of places, talking about the Kerr event. I spoke at major conferences saying the data didn’t support [their allegations].

So with a new project underway, the intention is to get it right, right off the bat.

“We have to have this baseline data set before we start injecting CO2,” Rostron stressed.

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PIPELINE NEWS May 2012

Saskatchewan taking the lead on CO2 front

The Petroleum Technology Research Centre is spearheading Saskatchewan’s eīorts on enhanced oil recovery.

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Story and photos by Brian Zinchuk Regina – Through the lack of action by other players in the carbon capture and storage field, Saskatchewan is gaining a substantial lead, according to the Dr. Malcolm Wilson, CEO of the Petroleum Technology Research Centre.

That was just one of the items Wilson noted in a sweeping interview with Pipeline News at the PRTC offices on the University of Regina campus on March 30. For years, Wilson has been Saskatchewan’s point man on enhanced oil recovery and carbon dioxide strategies. He was one of the founders of the PTRC and the International Test Centre for CO2 Capture. In recent years he ran the U of R Office of Energy and Environment before returning to the PTRC in the position of CEO in 2011. In 2007, Wilson was one of the members of the Intergovernmental Panel on Climate Change that was honoured, along with U.S. Vice President Al Gore, with the Nobel Peace Prize.

Weyburn-Midale After over a decade doing scientific research monitoring the International Energy Agency Greenhouse Gas Programme (IEA-GHG) Weyburn-Midale CO2 Monitoring and Storage Project, it’s time to write the book, literally, on what was learned.

“We’re looking at putting out our best practice manual in the summer,” said Wilson. “It’s really what you might call a generic document – what we learned, and how to apply it to other projects. We think this is what people will be looking for.”

These best practices can be applied around the world, i.e. a storage project in Argentina might look to the Weyburn-Midale project.

“This is not a how-to for EOR (enhanced oil recovery). This is a how-to for monitoring the integrity of geological storage of CO2,” he said.

The enhanced oil recovery techniques are proprietary to the operators, Cenovus and Apache.

“They understand how to optimize what they are doing in the reservoir.

That’s not our role. We’re looking at monitoring the subsurface,” Wilson said.

Three-dimensional geophysical (e.g. seismic) surveys were used. When done over time for the same area, it’s called 4D, with the fourth dimension being time.

“Four-D really is our best method for watching the CO2 grow in the reservoir,” Wilson said. “It’s also our best early warning system. If we fully understand what’s happening in the reservoir, then we know how accurately we can measure leakage, should it occur.

“The fundamental recommendation is to perform a baseline survey – understand what is there before you start monitoring. As we monitor over time, we’re looking for changes. ɸ Page B9

PIPELINE NEWS May 2012 Dr. Malcolm Wilson spoke to the Estevan Chamber of Commerce luncheon on April 11 as part of an open house on the new Aquistore project.

Éş Page B8 â&#x20AC;&#x153;Ideally, most of the results are null results. At surface, we donâ&#x20AC;&#x2122;t expect to see any changes. But that doesnâ&#x20AC;&#x2122;t mean we donâ&#x20AC;&#x2122;t monitor for them.â&#x20AC;?

Asked if the research was complete, he laughed and said, â&#x20AC;&#x153;Never ask a researcher if research is complete. It never is.â&#x20AC;?

One of the things PTRC is looking at is the end of the life cycle for such projects â&#x20AC;&#x201C; what happens when oil recovery eďŹ&#x20AC;orts are over and itâ&#x20AC;&#x2122;s time to essentially button up and abandon the ďŹ eld. â&#x20AC;&#x153;What is most interesting to the researcher is least interesting to industry,â&#x20AC;?

Wilson said. â&#x20AC;&#x153;How do we go through abandonment, sealing them oďŹ&#x20AC;? This is very much policy-driven research. In Alberta, the province has agreed to accept liability for CO2 after a period of time. â&#x20AC;&#x153;You design your project, inject for 40 years, demonstrate to government things are predictable, and risks are low. Then you transfer to a public authority.

That CO2 will be there indeďŹ nitely. Companies frankly donâ&#x20AC;&#x2122;t hang around that long.â&#x20AC;?

Drawing a curve on a whiteboard, Wilson pointed to the trailing tail end of the curve, after the oil recovery is complete. â&#x20AC;&#x153;We call this our risk curve. Itâ&#x20AC;&#x2122;s actually our learning curve. The question is the time period, perhaps 10 to 15 years after the last injection point. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s an irony in all this. Iâ&#x20AC;&#x2122;m sitting there with a bunch of people, all a similar age, looking at a project with 50 years injection and a 60 year timeline. â&#x20AC;&#x153;It is interesting to say, â&#x20AC;&#x2DC;What do we expect to happen 30 years out, 40 years out, 50 years out,â&#x20AC;&#x2122; knowing damned well, ha! Itâ&#x20AC;&#x2122;s not going to be my problem. )RU KRXU HPHUJHQF\ VHUYLFH FDOO

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â&#x20AC;&#x153;Unless we start doing that work now, nothing gets started. Companies want assurances when investing several billion dollars, the processes are in place for ďŹ nishing that. â&#x20AC;&#x153;What does that abandonment look like? Does the current standard work?

Iâ&#x20AC;&#x2122;m thinking the current standards will work, but is that right?â&#x20AC;?

The science on that front needs to be done, he noted, adding there are a lot of abandoned wells at Weyburn. â&#x20AC;&#x153;Because we have so much understanding at Weyburn, itâ&#x20AC;&#x2122;s a good place to try it.â&#x20AC;?

One study by Halliburton injected a polymer, then cemented behind it to create an isolation barrier on an abandoned well. â&#x20AC;&#x153;Is that necessary?â&#x20AC;? Wilson asked. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t know. Is it overkill? It could very well be. Weyburn has always been about getting the good science behind the questions people are going to ask.â&#x20AC;? â&#x20AC;&#x153;In the ďŹ rst phase, we had 22 research organizations in six countries, probably over 80 projects and well over 100 researchers.â&#x20AC;?

That initial phase was from 2000 to 2004. There was a lull of several years, then a second phase from 2008 to 2012. The British Geological Survey and the University of Rome have been heavily involved with the project. The Italians, for instance, have a lot of experience with volcanic carbon dioxide leaks, right in the middle of Rome. ɸ Page B10

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PIPELINE NEWS May 2012

CCS in Europe seen as a 'shipwreck' ɺ Page B9 Boundary Dam and Shand SaskPower is working on a commercial scale capture project at Boundary Dam Power Station. On Mar. 20, SaskPower and Hitachi announced a second project – a joint carbon capture research project at the Shand Power Station.

The University of Regina has an existing capture test facility at Boundary Dam. At the moment it’s not operational, but it’s functional, hooked into units 5 and 6.

“You don’t want to test anything on Boundary Dam (Unit 3). You want to be pretty sure it’s going to work,” Wilson said, hence the necessity of the new Shand research facility.

He noted the United States has recently put forward that once a facility reaches 45 years, the expectation is you close it or retro-fit it with capture equipment.

Lignite coal, used in Saskatchewan, generally produces 1,000 to 1,100 kilograms of CO2 per megawatt-hour. Lesser quality coal, such as lignite, produces more carbon dioxide than other forms of coal, the result of burning more coal to produce the same amount of energy.

In Europe, using cold water from the North Sea for cooling and high quality coal, it’s possible to run at carbon dioxide efficiencies much higher than what SaskPower can do with its coal sources.

The PTRC is a major participant with SaskPower on the Boundary Dam project, working on the Aquistore carbon dioxide injection well project to provide geological storage of CO2 that does not end up in depleted oilfields. (See related story page B1).

“We’re looking at the whole picture, from capture, right through to storage and utilization.

Dark tunnel Between Boundary Dam, Shand and Aquistore, SaskPower is a leader in the CCS field right now, Wilson said. “In the CCS world, it’s a pretty dark tunnel right now. There’s one light at the end, and that’s SaskPower. It’s building a commercial CO2 capture on a coal-fired power plant.

“The much-touted European program has collapsed completely,” Wilson said.

Of 12 CO2 capture projects to be in place by approximately 2020, Wilson said, “Every project, virtually, has fallen off the table. Out of the current batch still on the table is one in the Rotterdam area. There are a couple of others that are

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picking up some momentum.

“One of my colleagues in Europe describes CCS in Europe is a shipwreck, and I think he’s right. SaskPower’s now at least 18 months ahead of anyone else.

That lead is going to increase until somebody else starts to build these things.”

“Europe’s not there and the U.S. is puttering along. I have not heard a peep out of Enhance,” he said, referring to the proposed carbon dioxide pipeline running through Alberta.

The Shell Quest program seems to be going ahead smoothly, however. “Give full credit to Shell on that job. They have done an outstanding job. Everything is in place,” he said.

Other projects The PTRC has $2.5 million in funding from the federal government, with approximately $5 million in matching money from the province and industry funding to conduct research into enhanced oil recovery.

“We’re spending quite a few million with the Saskatchewan Research Council, University of Regina and University of Calgary. We have other projects with the University of Saskatchewan and University of Alberta, as well as a small project with Dalhousie. I’m hoping we’ll put all the pieces together and have a project at SIAST in Saskatoon,” Wilson said.

That’s just the PTRC’s research projects, a large number of which are administered through its Centre of Excellence called STEPS (Sustainable Technologies for Energy Production Systems). Most of them are focused on heavy oil enhanced oil recovery, but there is also work to be done on the Bakken to increase recovery factors.

Over and above that, $22 million is slated for the Aquistore project (see related stories Page B1, B4 B6) PTRC’s JIVE ( Joint Implementation of Vapour Extraction) project in northwest Saskatchewan is now done. Wilson called it a mixed success. Its basic finding was that yes, you can use solvents and certain types of solvents in a field environment, but not all fields.

“We are seeing Husky continuing to use that process, so we can consider that one to be a success.

“It’s SAGD, but with a solvent instead of steam. You pump in a solvent, it reduces viscosity, it flows to the production well. The key is getting your solvent back.

“It’s reservoir specific. In some reservoirs, it works. In some it doesn’t,” said Wilson.

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PIPELINE NEWS May 2012 Erik Nickel, STEPS senior project manager

STEPS funds dozens of research projects emerging technologies and water management.

“We combine with oil companies through memberships in the STEPS network,” Nickel said.

Six companies are members right now, including Husky, Devon, CNRL, Cenovus, BP Alaska, and a tiny junior from Weyburn – Openfield Resources. Membership rates are adjustable with company size, and members get access to reports on potentially how to best run secondary oil recovery.

“Our goal is to be relevant to the giant companies and the small producers as well,” he said.

“We’re trying to bring in more light-oil focused companies.”

By Brian Zinchuk Regina – While projects like Weyburn-Midale and Aquistore may get all the glory, the Petroleum Technology Research Centre in Regina actually is a participant in several dozen of research projects at any given time. A large number of those are under a program known as STEPS, or Sustainable Technologies for Energy Production Systems.

“It’s a program designed to assist in enhanced oil recovery,” explained Erik Nickel, senior project manager with STEPS. “In heavy oil, we’re recovering approximately six per cent of initial oil in place. We’re trying to increase that significantly.

“Doubling that would be nice. Going from six to 10 or 12 per cent would mean a massive shift for the province. We’re sort of running out of drilling locations,” he said, referring to the heavy oil area of the province.

The PTRC was founded, in part, to focus on improving heavy oil recovery. But it doesn’t end there. “We’ve now moved to light oil as well,” Nickel said.

STEPS is funded provincially and federally, and is one of a number of business-led national centres of excellence.

“We use that funding to build research at the Saskatchewan Research Council, University of Regina, and University of Calgary,” he said.

The University of Alberta and University of Saskatchewan have smaller projects on the go as well.

At the U of R, STEPS is involved with industrial systems, chemistry, geology, and petroleum engineering.

“There’s 40 to 50 projects on the go at any given time,” Nickel said. “We divide them into research themes.”

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Specifically, the PTRC is speaking with some Bakken players, as well as a lot of other companies.

“We’re trying to get more and more into light and tight oil,” Nickel said. That includes a focus on the Bakken, Shaunavon and Viking plays. Some things to look at include the geomechanics and characterizations of fracture propagation and low salinity waterflooding.

“A thrust of our new projects is our water program – treating produced water to reduce salinity, purification through the removal of oil and biologicals. This is for use in low salinity waterfloods or more practical disposal,” he said.

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PIPELINE NEWS May 2012

Tiny sensors to traverse wormholes Regina – In the world of Star Trek, the Borg assimilate other beings by injecting microscopic nanoprobes into their bloodstream.

These intelligent probes travel through the victim’s bloodstream, talk to each other, and eventually turn the victim into a Borg; a half-living, half robot being.

In many ways, a project the Petroleum

Technology Research Centre in Regina is working on is very similar to those Borg probes of science fiction. The PTRC intends to pump tiny sensors into heavy oil wells, having them communicate with one another, and then communicate their findings to the surface.

In Pipeline News’ lead story last month, we reported on the signing

of an agreement between the PTRC and Dutchbased INCAS³ Now we’re able to explain a little more about what that agreement entails.

One of the challenges for Saskatchewan has been finding ways to increase the low recovery rates of heavy oil wells.

There’s an awful lot of heavy oil in Saskatchewan, but recovery factors, decades on, are still

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via these wormholes.

“What do they look like? Can we find ways to collapse these things?

Until we understand what we have there, no model is right or wrong.

Can we put sensors downhole and image it, i.e. micro-sonic logging?”

Wilson said INCAS³’s expertise is in taking the concept to reality.

“What does the sensor look like? We know our size limitations. We’re looking at something maybe half a centimetre in diameter

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in the single digits.

“When you hit eight per cent recovery, you run out of energy in the reservoir,” said Dr. Malcolm Wilson, CEO of the PTRC. The creation of wormholes in heavy oil reservoirs occurs as sand is produced out of the well, creating voids in the formation. “These wormholes allow for the rapid transmission of water,” Wilson said.

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and one centimetre long that contains a battery, clock and accelerometer,” Wilson said.

Such technology is commonplace in today’s cellphones. But a cellphone has a hard time getting a signal out of a metal building. These sensors need to transmit through solid ground, 400 metres deep.

“Can we pump these things and retrieve them intact?” Wilson said.

“Can we get them to communicate with each other? Do we pump them in with tails?

“If the wormhole is a dead end, we need to know that.

“The exciting part is we think we may have found a way to image what is going on down there.”

Application may be remarkably easy, according to Wilson. “In simple terms, you take a handful of simple probes, throw them down a well, they transmit information, and we never retrieve them.”

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PIPELINE NEWS May 2012

Stephen Onda has been in the Įlm business in Saskatchewan for 27 years.

He’s producing a documentary on rebuilding a D10 dozer at Kramer Ltd.

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Robert Pytlyck, leŌ, and Zaul McLellan, are camera operators on the documentary.

Film crew documents D10 rebuild

By Brian Zinchuk Regina – What does it looks like when a D10 dozer is stripped right to the frame and rebuilt?

Watch City Television this fall to find out.

Stephen Onda is the long-time producer and director who has been filming the process as part of a Saskatchewan-produced documentary series.

The show will be called On Site, and the production company is Built Bigger Productions.

“This is the first order. Our broadcaster is telling us it will be in the September schedule,” Onda told Pipeline News between a shoot at Kramer Ltd’s Regina service centre and another shoot downtown.

“We’re a tight little five person team, taking the view onto large industrial sites.”

Besides A and B cameras, they also have numerous small cameras positioned for time lapse photography in the shop.

Onda said it takes a lot to get people to feel comfortable being taped, but if you spend the time with them, they loosen up.

It’s also difficult to get access to complicated and interesting locations. They sent out 78 proposals, and got responses from only one-third. Twothirds of those responses were, as Onda put it, “No way in hell.”

“Our film crew is trained to work on industrial sites. We understand safety workflow,” he noted.

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“This order gives us six episodes. Here at Kramer, we’re looking at the big adventure of a Kramer Classic Rebuild. They take anything and everything that can come off the equipment, replace it and rebuild it. Electrical, hydraulics, engine, transmission

– they’ll re-machine anything that doesn’t meet specs. It will be like new,” Onda explained.

Mining is high on the list, with the crew covering a gold exploration site. ɸ Page B14

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PIPELINE NEWS May 2012

Support of the arts needed ɺ Page B13 “We’re following K3 and the construction of the largest headframe of its kind in the world, 375 feet tall,” Onda said.

Another episode will focus on PTI Ltd., a specialized producer of electrical transformers.

In Regina, the crew is following the erection of a tower crane for a condominium under construction, as well as the first steps of that project.

The SaskPower Boundary Dam carbon capture project will also be documented.

In March, the provincial budget cut the film tax credit for such productions.

“It’s going to hurt us,” Onda said. “It’s definitely going to damage our in-

dustry. I’ve been doing this for 27 years. Then, there were less than 20 techs. It’s been built to over 1,000 skilled techs, world class.”

Onda said he personally used $8 million of the tax credit funding over 20 years. “In that period, I brought in $68 million in production. It’s a pump primer,” he said in reference to leveraging fresh money. ɸ Page B15

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PIPELINE NEWS May 2012

B15

Robert Pytlyck lines up his camera on the frame of a D10 dozer.

Gibson Welding Ltd. Oilfield Trucking & Rentals

861-1280 861-1280 Jason 861-2567 John

John ɺ Page B14 Asked about his thoughts on the film tax credit elimination, general manager Tim Kramer said, “We’re a huge supporter of the arts.

“The problem with society is everybody thinks the arts should be free, but they can’t be. Somebody’s got to support the arts. It’s not like a baseball club, or hockey or soccer. You do those things as a young man or young woman. The, arts, not so much.

So when you get into the corporate world, you tend to support sports.

“Well, I did sports, but with my mom and dad, they’re very arts driven. We really care for the arts, so it’s really hard to be critical. Somebody’s got to support them.

“Arts don’t get enough play. When corporations look at their philanthropic work, don’t discount the arts. If we don’t do it, the government’s going to do it, and it’s much more expensive.”

The Kramer IMAX Theatre in Regina was named after the family and their support.

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PIPELINE NEWS May 2012

Overcoming challenges, Estevan OTS golf tourney a go with new two course format Estevan – Last year, the Estevan Oilfield Technical Society’s annual golf tournament was cancelled, likely because nobody golfs from a boat. The Estevan Woodlawn Golf Course was almost entirely flooded last spring, and substantial damage was done to the back nine.

This year the OTS will take an innovative approach, using two golf courses to accommodate the tournament, which takes place June 1-3.

According to new OTS president Brett Campbell, they will use the Hidden Valley Golf & RV Resort course as the front nine, and then Woodlawn’s functional holes, its front nine, as the back nine for the tournament. Players will tee off at Hidden Valley, then be shuttled to Woodlawn to complete their round.

Golf cart rentals will be included with registration for the Hidden Valley

portion, but players are on their own at Woodlawn. Many already have carts at the facility, according to Campbell, and there will be rentals available for those who do not.

Due to the logistics in this operation, only 144 players will be able to take in 36 holes of golf. The rest will be limited to 18 holes. That 144 will be determined on a first-come, first-served basis.

The steak and lobster barbecue will take place on the Saturday night at the Estevan Curling Rink.

Registration may be done online at www.estevanots.com or in hard copy via registration forms that will be in circulation around town. In a change from previous years, hard copy registrations this year may be dropped off at Watson Land Services.

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PIPELINE NEWS May 2012

B17

Premier Brad Wall speaks to civic oĸcials aŌer his speech in Estevan on March 28.

Strong interest in purchasing CO2: Premier Estevan – While speaking at the Estevan Chamber of Commerce annual general meeting on March 28, Premier Brad Wall touch on energy issues in both his speech and comments to the media.

“SaskPower’s been a major player in this community.

As a result of clean coal at Boundary Dam and at Shand, Wall said the area will grow exponentially over the next several years.

“Clean coal – if there was an oxymoron, that sounded like it,” he joked, but went on to add that the Boundary Dam project is the largest project of its type in the world.

“If the world’s going to continue to use coal, it’s going to be interested in what’s happening here,” Wall forecast.”

As for the CO2 that is captured by the plant, he told reporters, “The CO2 is a game changer. You’re going to see a lineup purchase that CO2 in this area. Well, not a lineup, maybe, but the interest is high and strong, and it will be a whole new revenue

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stream that helps SaskPower on these projects.”

The March provincial budget forecast oil at $100.50 per barrel, and KCL at $464 per tonne, based on a on-par exchange rate between the Canadian and American dollars. On those assumptions, oil will bring in $1.6 billion to provincial coffers Asked if that high price was sustainable, or that it could trigger a recession similar to what was seen

in 2008, Wall said, “Our officials are pretty confident, and I think we know intuitively it’s not going to trigger the inflationary jackpot we got ourselves in. Let’s not forget the Lehman brothers incident was not caused by oil, but by a near Ponzi-scheme.”

“That’s why we budget cautiously. That’s why we have $700 million in the growth and security fund, and why we made some tough decisions in the budget to make it balanced,” Wall said.

Estevan Office: Phone: (306) 634-2681 Fax: (306) 636-7227

B18

PIPELINE NEWS May 2012

PIPELINE NEWS May 2012

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B20

PIPELINE NEWS May 2012

New tech. key to keeping lights on

The new building on the leŌ is the carbon capture unit being built at Boundary Dam Power StaƟon.

Photo courtesy the Petroleum Technology Research Centre.

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By Brian Zinchuk Regina – For power utilities, much of their business focuses around long established technologies – coalfired power plants, hydro-electric dams and the like. Even nuclear power plants have been around for over half a century, and wind turbines dotted landscapes for a century. But in the new world where controlling greenhouse gas emissions is becoming a paramount consideration, SaskPower is spending $1.24 billion on commercializing what is essentially a new technology – the large scale capture of post-combustion carbon dioxide.

To that end, the Crown utility is not only embarking on a new process with its Boundary Dam carbon capture project, it will also be conducting related research at its nearby Shand Power Station.

“We already have some worldleading research at Poplar River,” said SaskPower president and CEO Robert Watson. “Companies from around the world test their products on our Poplar River facilities on other contaminants – mercury, SOx, NO x and nitrous oxide. We’ve had that active for quite a while.

“Now at Boundary Dam, we are building one of the world’s first fullproduction, post-combustion carbon capture systems.

Part of that is the development by Hitachi of a new turbine for what’s called the power island.

The second element is the postcombustion capture system, which is an amine technology.

“The stripper, the tall unit that sticks out the top, literally is a chemical process similar to a shaken can of pop,” Watson said. “It shakes the CO2 out of the flue gas, and the amine technology makes it heavier, so it drops.”

“We hope to capture 90 per cent of the (CO2) emissions out of that facility. With that you automatically collect SO x and NOx out of the air.

Asked why SaskPower is proceeding with this project, Watson said, “The reasons are quite simple, frankly. We sit on, in the province of Saskatchewan, arguably a 300 year supply of coal. We know where it is.

We know how to get it. We can get it safely. We can return the ground to almost as good as new, and we do.

“It’s a known supply and a known risk. Therefore, the idea of cleaning it up rather than abandoning it, is paramount.

“We’re fully aware in the future we need to be a good environmental citizen and clean the air. That’s why we’re very interested in the carbon capture technology.” ɸ Page B21

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PIPELINE NEWS May 2012

Robert Watson is the president and CEO of SaskPower.

ɺ Page B20 The other element of the business is CO2 works well for enhanced oil recovery.

Additionally, the project is near deep aquifers where CO2 can be stored.

“We’re in a great spot in the world not only to capture CO2, but to use it for economic benefit and to store it safely. Weyburn’s proven that,” Watson said, referring to the Weyburn-Midale enhanced oil recovery project which uses CO2 in a miscible flood.

The federal government is coming out with regulations which will require old coal plants, 45 to 50 years in age, to either shut down or burn cleaner; as clean as natural gas.

“Boundary Dam 3 will perform much better. We’ll be down to around 190 tonnes per gigawatt-hour, whereas gas equivalency is approximately 450 to 500 tonnes per gigawatt-hour. We’ve got room to manoeuvre there, too.”

The plan is to complete the carbon capture for Unit 3 in the spring of 2014, and run it for at least two years and test the technology and financial model. The actual storage of CO2 will also be tested, through both the Aquistore project, which has federal assistance, and through sales of CO2 to oil companies.

“We have several interested parties for buying the CO2.”

Watson wouldn’t say when the successful bidder would be announced, other than it could be in the not-too-distant future.

“They’d have to build a pipeline, or several pipelines, to transport the CO2.

It’s different than a gas or oil pipeline, of course,” he said, adding the infrastructure needs to be put in place to make use of the CO2.

“We’re going to deliver liquefied CO2 at our gate.”

“The research side of it is, quite frankly, this is the first full-production facility of its kind ever built. You can design and engineer, it, but putting the parts together and having it work, is a learning curve for everyone.

“The next time we come around, we’re pretty darned sure we can do it with

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better economics on the construction.”

That means expected improvements from SNC-Lavalin on its construction, Shell on its amine process, Hitachi with its turbine, and SaskPower, being the project manager. A decision on how to move forward with the next units likely will not be made until 2020.

“Our full intention is to keep the coal-burning fleet in the portfolio,” he said.

The Crown corporation wants to monetize the knowledge developed in this project.

“We want to make sure if there is intellectual property rights that come out of this, we have a way of gaining value out of that,” Watson said.

“Couple that with the test facility at Shand, and SaskPower will learn a significant amount about carbon capture technology.”

Shand test facility On March 20, SaskPower and Hitachi announced they are partnering to construct a $60-million carbon capture test facility (CCTF) at SaskPower’s Shand Power Station in southeastern Saskatchewan. The CCTF will allow international developers to fully evaluate performance of their systems to capture carbon dioxide emissions from coal-fired thermal power plants.

“We’re really excited. This is a real opportunity,” he said.

SaskPower and Hitachi will each contribute approximately $30 million to the CCTF, with SaskPower acting as owner/operator. Construction will begin in late 2012 or early 2013, with a scheduled completion date of summer 2014.

Hitachi will supply their skilled process development team, as well as core process equipment from their Saskatoon manufacturing facility.

“We want it built by 2015, for sure,” Watson said.

Hitachi’s proprietary amine technology will be the first technology tested at the CCTF. SaskPower expects to evaluate a number of current and emerging carbon capture technologies over the life of the facility. The CCTF has been built to accommodate a wide range of test configurations, ensuring it remain a viable facility for many years.

Hitachi gets the rights for the first year of testing their technology, Watson said.

After Hitachi has completed their work, other companies wanting to use the test facility will be able to do so, for a fee.

“We fully expect to recoup the cost of the unit by allowing companies to test their technology,” Watson said.

He noted that later in April, SaskPower officials were going to Japan to see a supercritical plant Hitachi was working on. Noting the limited options for hydro power for SaskPower, he said, “The idea of another coal plant 20 years from now is not far-fetched.”

B22

PIPELINE NEWS May 2012

Surge doubles production Calgary – As the result of successful drilling at its light oil plays, Surge Energy Inc. nearly doubled production in 2011.

Production increased by 97 per cent

to an average of 5,960 bbl. of oil equivalent per day from an average of 3,026 boepd during 2010. Fourth quarter production averaged 7,514 boepd, an increase of 88 per cent from an

average of 4,005 boepd in the fourth quarter of 2010.

Per unit operating costs were up two per cent for the year to $15.58 per boe from $15.25 per boe in 2010,

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while fourth quarter costs were nearly flat at $14.92 per boe ($14.87 per boe the previous year). Operating expenses were affected by wet conditions in Waskeda and Windfall, said Surge. Start-up costs in the first quarter of 2011 and the impact of shut-in production in the second quarter negatively affected per unit expenses in the area. Operating expenses for the full year also were affected by higher operating expenses in areas acquired in the third quarter.

Surge said it continues to focus on efficiencies within existing operations and expects operating expenses per boe to decline throughout 2012 with a forecast reduction in combined operating and transpor-

tation costs to less than $13.50 per boe.

Capital spending was down 10 per cent in 2011 to $175.01 million from $195.21 million in 2010. Drilling and completions were the largest single item at $89.68 million and there were $24.91 million in acquisitions.

Surge drilled 38 (35.36 net) wells in 2011 with a 100 per cent success rate. The 2011 drilling activity included eight horizontal, multi-frac development oil wells at Valhalla, five horizontal multi-frac oil wells at Windfall, 14 horizontal multi-frac oil wells at Waskada, four horizontal and two vertical development oil wells at Silver and Sounding Lakes, and two exploratory wells at Sounding Lake and Goose River. Surge also drilled two vertical injection wells at Silver and one vertical water disposal well at Waskada.

In addition to drilling operations in 2011, Surge successfully added drilling locations and increased its working interest at each of its core operating areas of Valhalla South, Wind-

fall, Sounding Lake and within the Williston Basin.

During the fourth quarter, Surge drilled 15 wells. Only eight of the 15 wells drilled were producing at quarter end with the remaining seven wells to be completed and brought on production during the first quarter of 2012.

Surge commenced drilling operations at Waskada in southwest Manitoba during the fourth quarter of 2010 and has drilled 21 horizontal multi-frac wells for a 100 per cent success rate to date. Of the 21 wells, two were drilled and completed in the fourth quarter of 2011 and three were completed during the first quarter of 2012. All wells are tied into the company’s new central gathering system, oil battery and water disposal facility. The design of these new facilities and infrastructure should accommodate production rates of 1,500 bpd of oil and will increase 2012 netbacks by significantly reducing operating costs, third party fluid processing and water disposal. ɸ Page B23

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PIPELINE NEWS May 2012 Éş Page B22 The three wells drilled and completed during the ďŹ rst quarter of 2012 at Waskada have started production and will add signiďŹ cantly to second quarter production. Surge has an additional nine wells budgeted for the remainder of the year.

In addition, Surge is continuing its work on the waterďŹ&#x201A;ood secondary recovery plan for the SpearďŹ sh. It plans to implement a waterďŹ&#x201A;ood pilot during the ďŹ rst quarter of 2013. Surge currently has 106 (93 net) undrilled locations in Waskada.

In North Dakota, Surge participated in two (0.4 net) non-operated wells during the fourth quarter of 2011. The company expects to participate in an additional six to eight gross non-operated wells during

2012 and plans to start drilling its 100 per cent operated wells during the third quarter.

During the ďŹ rst quarter of 2012, Surge is also participating in a 14.2-square-mile 3D seismic program in North Dakota, which will aid in the execution of the 2012 SpearďŹ sh horizontal well drilling program.

In southeast Alberta (Lloyd/Cummings), Surge drilled and completed two 100 per cent WI unfractured horizontal wells at Silver Lake and drilled one (100 per cent WI) horizontal, multi-frac well at Sounding Lake. The two wells at Silver Lake were on production during December 2011.

The well at Sounding Lake was completed in January 2012 and was on production during February.

Surge has 12 wells budgeted in southeast Alberta for this year.

Surge Energy Inc. obtained a Toronto Stock Exchange (TSX) listing in the fourth quarter and began trading on the TSX under the symbol SGY.

B23

During the ďŹ rst quarter of 2012 at Sounding Lake, Surge successfully drilled and placed on production two additional, horizontal multi-frac wells (100 per cent WI) and one unfractured horizontal well, also 100 per cent WI. Surge has continued to optimize two waterďŹ&#x201A;ood schemes in the Silver Lake area by adding two additional water injection wells in both the Cummings and Lloydminster oil pools. A minor expansion of the battery at Silver Lake was also completed to increase water handling capacity.

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CO2 capture technology commercialization so far eludes ITC Dr. Paitoon TonƟwachwuthikul is co-founder and lead researcher of the InternaƟonal Test Centre for CO2 Capture and dean of the Faculty of Engineering and Applied Science with the University of Regina.

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Regina - With global carbon capture projects on hold or slow in coming to fruition, the International Test Centre for CO2 Capture at the University of Regina is still waiting to see its work put to commercial use.

“We are restructur-

ing at the moment,” said Dr. Paitoon Tontiwachwuthikul, co-founder of the ITC and dean of the Faculty of Engineering and Applied Science with the University of Regina. ITC is located on the U of R campus.

The heart of the ITC is a pilot plant to run lab experiment on various carbon capture technologies. Several columns can have post-

combustion flue gas run into them, one at a time, simulating the output of a power plant. The flue gas comes from a power plant powered by a natural gas microturbine generator/steam boiler. This may not be a coal-fired plant, but it does the job. The power plant produces steam to turn the turbine, and puts out 32 kilowatts of energy. ɸ Page B25

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PIPELINE NEWS May 2012

Process engineer Don Gelowitz monitored the carbon dioxide capture pilot plant at the InternaƟonal Test Centre for CO2 Capture.

File photo

ɺ Page B24 It produces one tonne of carbon dioxide a day, just a tiny sliver of a fraction of what a fullscale power plant puts out.

The processes used to capture CO2 use amine-based technology. Tests are done using the aforementioned columns. The column acts as a separator. The aqueous fluid enters the top of the column, filtering downward. The exhaust gas enters the bottom, flowing upward, through the fluid.

The carbon dioxide dissolves into the liquid in the separator, forming a solution with the carbon dioxide, which is now in liquid form.

This liquid exits at the bottom of the separator, passes through a heat exchanger, and then enters at the top of the regenerator.

The regenerator uses steam from the power plant to boil off the carbon dioxide from the liquid. The liquid is then reused, after passing through the heat exchanger again. The carbon dioxide is then piped off as a gas.

A condenser cools it down and knocks off much of the water for reuse.

After going through this process, what’s left coming out as effluent is oxygen, nitrogen, and a small

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SaskPower and Hitachi have recently reached an agreement to develop a substantially larger test facility at the Shand Power Station. Hitachi will run it for a year, then it will be open to other parties, according to SaskPower. ɸ Page B26

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PIPELINE NEWS May 2012

Fundamental research on CO2 capture technology

University of Regina Professor Raphael Idem explains how exhaust gases Ňow up through the separator, with the liquid Ňowing down capturing the carbon dioxide.

File photo

FOR SALE

ɺ Page B25 “We will work with SaskPower on technical support and staff,” Tontiwachwuthikul said. We will work with international organizations and other universities around the world. The ITC has a team of 10 professors working in the area, as well as 25 to 50 of students. Some students are a result of partnerships in China and Thailand.

“We do fundamental research from the beginning. We’ve discovered a few things that we think can be used in the real working world, but we have to find a user. We have engineering knowledge that we can use to help train operators, or provide an expert opinion on.

“It would be nice to commercialize our technology, but it’s not our only function,” he said.

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PIPELINE NEWS May 2012

B27

Summer is on the horizon

During spring breakup, the rigs come home to roost, as evidenced by the CanElson Drilling yard at Carlyle over Easter.

Photo by Brian Zinchuk

Quattro buys producing Sask Àeld Quattro Exploration And Production Ltd. has entered into an arm’s-length agreement with an Alberta-based oil and gas exploration and production company to acquire 100 per cent of three producing, conventional oil and gas fields in southern Saskatchewan for $1.5 million.

The acquisition is expected to close on or before May 31 and will be funded through a mix of equity and debt.

The fields are currently producing 68 bbl. of oil per day and more than 60 boepd of oil and gas production is shut in awaiting remediation.

“Through the acquisition, Quattro is acquiring low-decline, high quality oil assets with a substantial land base and two underutilized, first-rate processing facilities,” the company said in a release.

The majority of the assets are operated and very high working interest. The area has been underdeveloped and contains 3D seismic over the majority of the existing developed lands. Quattro also has identified additional oil targets on these lands.

“We are very pleased,” Leonard Van Betuw, president of Quattro, said in a release. “This acquisition is projected to result in the company generating positive cash flow in 2012. In addition these producing properties and facilities in combination with its current exploration efforts underway represent a significant foundation for additional material growth in 2012.”

The property is 120 miles from the company’s current region of exploration in the Williston Basin.

The production was acquired for $22,059 per flowing bbl., or $6.95 per boe of proven reserves.

Quattro said 19,040 net acres were acquired – 1,920 acres developed and 17,120 acres undeveloped.

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B28

PIPELINE NEWS May 2012

OTS: A HIT The Estevan Oilfield Technical Society’s 53rd annual Oilmen’s Bonspiel took place March 22 to 25. Forty-eight rinks took part. The A-event went to Brent Gedak Welding, while the B-event was taken

by Polycore. Epping Energy claimed the C-event.

Spearing Service Ltd. and Southern Corrosion took the D1- and D2-events respectively.

Photos by Brian Zinchuk

Above: The Brent Gedak Welding team of lead Jaret Mosley, second Brad Orsted, third Jesse Rosengren, and skip Brent Gedak came out as the champions of the bonspiel.

Curling is not known as a quiet sport, as evidenced here by Michael Mainil.

Big Sky Drilling, operating out of Oxbow, Saskatchewan, has the largest rig Áeet in Saskatchewan.

Big Sky Drilling specializes in oil and natural gas drilling in Southeast Saskatchewan and Southwest Manitoba.

Pete Moen releases his rock.

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PIPELINE NEWS May 2012

B29

Chris Istace watches the acƟon.

Jeī Mosley’s Southern Corrosion team took the D2 Ɵtle.

Kyle Arsenault, leŌ, and DusƟn Seeman sweep for Peak Energy Services’ team.

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PIPELINE NEWS May 2012

F&L Concrete Services moves into new home

Norm Fichter runs F&L Concrete Services. This is the inside of their new shop.

The new shop is 80 by 200 feet.

Estevan – With substantial growth over the past five years, it was time for Estevan’s F&L Concrete Services to expand.

Last December the company moved to its new shop, a few blocks to the southwest of its old location on the west of Estevan.

“We started in April, and moved in just before Christmas,” said Norm Fichter, who runs the family operation. Sons Chris are also involved, and his wife Audrey has spent many years as a part of the business, too.

The new facility is on 11 acres, which provides substantially more room for their rental equipment and aggregates.

The new building is 80 by 200 feet, with offices in the front and cold storage above them. The seven-bay shop area has heated floors and a wash

bay. The shop is used to pour pre-cast concrete, such as barricades used to protect wellheads.

“My old guy’s getting too old,” Fichter said of their former home. “My other building’s all leased.

In Fichter’s words, they handle “anything that’s concrete related.

“We supply some of our own concrete, but not all of it.”

The company has two mix-on-site trucks.

Often it finds itself working with other suppliers in town.

“For the concrete work, it’s about 40 percent oilpatch related,” Fichter said. The remainder is residential, commercial, industrial and farmrelated.

Over the years F&L has diversified into equipment rentals, which helps during the winter

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months when the concrete business slows down.

They have a three zoom-booms, four scissor lifts, six boom lifts, four skid-steers, an excavator, a mini-excavator, gen sets, light towers and trash pumps, to name a few. The company also has five office trailers of the type often used by service rig consultants.

“We have a variety of concrete products,” added Tracey Solcan, who handles rentals. That includes power screeds, tampers, and a variety of power tools.

The company was started in 1984.

“I started placing and finishing – shop floors, driveways and garage floors,” Fichter said.

Since then F&L has grown to the point where 14 people are now working for it.

“My biggest growth has been over the last five years,” Fichter said. “It pretty much all relates to the oil activity.”

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PIPELINE NEWS May 2012

B31

Hard at work University of Regina petroleum engineering graduate students listen to one of their own make a presentaƟon on April 10. Photo by Brian Zinchuk

Saskatchewan head count swells in 2011 Regina. – If you moved to Saskatchewan in 2011 or were born here that year, please raise your hand or baby finger for helping to boost the provincial population by 17,064 to an all-time high of 1,062,612.

That’s the biggest one year increase since 1953, when the population grew by 18,000 according to new population estimates by Statistics Canada in March.

Saskatchewan’s 2011 growth rate of 1.62 per cent was the secondhighest in Canada, behind only Alberta.

Saskatchewan also had the second-highest rate of net interprovincial migration (people moving in minus people moving out) with net interprovincial in-migration of 1,181 in 2011.

In fact, Saskatchewan and Al-

berta were the only two provinces in Canada with net interprovincial in-migration in 2011, as each of the other eight provinces experienced a net loss of people to other provinces.

“This speaks to the strength of our economy and illustrates a clear shift in the economic fortunes of our country to Western Canada and to Saskatchewan,” said Premier Brad Wall.

“Saskatchewan is now a ‘have’ province with a vibrant economy and a growing population. That’s a big change from just a few short years ago.”

Net international immigration increased Saskatchewan’s population by 10,660 in 2011, while the natural increase (births minus deaths) accounted for 5,223 more people.

“A growing population presents

both opportunities and challenges for our province, but it sure beats the

challenges of a declining population,” Wall said.

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B32

PIPELINE NEWS May 2012

Cranes can sƟll be seen at the Consumers Co-operaƟve Regina ReĮnery, where a major expansion has been underway for several years.

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Palliser’s salt water disposal ups production Calgary – Palliser Oil and Gas Corporation was on a production tear in 2011 with the focus on heavy oil in the Lloydminster area.

In fact, the Calgary-based company set record production levels in the fourth quarter of 2011 – its 11th consecutive quarter of production gains.

The company exited the year with production of 2,150 barrels of oil equivalent per day (98 per cent heavy oil), more than doubling production of 1,025 boepd in December 2010.

Production during the year averaged 1,375 boepd, representing an increase of 116 per cent from 637 boepd in 2010.

The company’s capital program for 2011 amounted to $44 million, including the Manitou Lake property acquisition in the heavy oil area near Lloydminster. ɸ Page B33

DUSTIN DUNCAN, MLA Weyburn - Big Muddy 35-5th Street NE, Weyburn, SK S4H 0Y9 (Tel) 842-4810 (Fax) 842-4811 (Toll Free) 1-877-842-4810 www.dduncan.ca

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PIPELINE NEWS May 2012

B33

22 wells drilled by Palliser in 2011 Éş Page B32 Palliserâ&#x20AC;&#x2122;s capital spending activity was focused on drilling new wells, reactivating old wells and building, building a salt water disposal and infrastructure. This will reduce operating costs, as well as generate revenue opportunities to handle third-party trucked salt water for a fee.

In 2011, the company drilled 22 wells, resulting in 18 wells being completed for heavy oil production and four salt water disposal wells for a 95 per cent success rate.

One well was cased as a future salt water disposal well.

In addition, they reactivated eight wells and increased their heavy oil acreage by 77 per cent and added numerous high quality prospects for future growth. â&#x20AC;&#x153;The past year was a very important one for Palliser, as we made great strides in the development of our high-volume lift methodology, employing this technology on numerous prospects within the greater Lloydminster area,â&#x20AC;? the company said.

Last year saw the company transition from the test phase to the production phase of high-volume lift by commissioning its operated saltwater disposal facilities employing its new high-volume lift development.

With the development of the new high volume lift â&#x20AC;&#x2DC;PODâ&#x20AC;&#x2122; concept, new wells will

begin production via pipeline into a Palliserowned facility, eliminating the cost associated with salt water trucking and disposal.

The company reports they continued to expand their salt water disposal infrastructure into the ďŹ rst quarter of 2012.

They also have completed two well conversions to salt water disposal, built one salt water disposal facility and tied in nine producing wells in 2012.

At Edam, a new salt water disposal well was tied into one of the existing salt water disposal facilities commissioned in the fourth quarter 2011, resulting in a doubling of the disposal capacity of that facility and allowing six producing wells to be tied in.

At Lloydminster, Palliser built a new salt water disposal facility, added one salt water disposal well and pipelined three wells into that facility.

This new Lloyd salt water disposal facility was expected to be commissioned and brought into service in April.

Palliser expects all its high water rate wells to be tied in directly to Palliser-operated salt water facilities by the second quarter of 2012.

The company expects to see operating costs continue to drop through 2012 and average approximately $23 barrels of oil equivalent for the year.

Palliser has bud-

geted ďŹ rst quarter 2012 production volumes to be below their December 2011 exit, although still well ahead of the 2011 fourth quarter average production of 1,657 boepd.

As the company tied in existing producing wells to the salt water disposal facilities during the ďŹ rst quarter of 2012, production from several wells was temporarily shut in while ďŹ eld modiďŹ cations were made.

Palliser estimates ďŹ rst quarter average production to be approximately 1,800 boepd. The company reports they are on track to meet 2012 average daily estimates of 2,250 â&#x20AC;&#x201C; 2,350 boepd and exit production average of 2,600 â&#x20AC;&#x201C; 2,800 boepd in December with a 98 per cent oil weighting.

With the new salt water disposal infrastructure in place, Palliser expects to see operating costs below $25/ barrel of oil equivalent in the second quarter.

Currently, Palliser has a total of six salt water disposal facilities and eight salt water disposal wells, with a total of 30 producing heavy oil wells tied in to these facilities.

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PIPELINE NEWS May 2012

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Fairborne lightens debt load with asset sale Calgary – Fairborne Energy Ltd. has reduced its debt load with the sale of assets in the Greater Sinclair area of Saskatchewan and Manitoba for $80 million.

The sale announced April 16 is in keeping with the company’s strategic review process started in March with an eye to enhancing value to shareholders.

The recent sale to a private oil and gas company includes approximately 700 barrels of oil per day excluding approximately 100 bpd of oil production in the Kingsford area of southeast Saskatchewan.

The transaction will have a retroactive date of March 1 and is scheduled to close in May subject to standard industry closing conditions.

The company’s current production, prior to the sale, is 15,300 barrels of oil equivalent per day with an additional 1,000 boepd shut-in at Wild River due to low natural gas prices.

Reserves attributed to the Greater Sinclair

assets on proved basis are 1.6 million barrels and on a proved plus probable (2P) basis are 3.1 million bbls according to assessment conducted by GLJ Petroleum Consultants Ltd. effective Dec. 31, 2011.

Transaction metrics are $48.87 per barrel on a proved reserve basis, $25.46 per barrel on 2P reserve basis and $114,286 on a flowing barrel basis.

The sale reduces net debt from Dec. 31 by 31 per cent and is based on the April 13 closing price of the company’s shares of $1.84.

Combined with its Clive divestiture announced on Jan. 31, which is expected to close near the end of the second quarter of 2012, the company anticipates net debt to be approximately $140 million.

The effect of the two dispositions will be integrated into Fairborne’s annual borrowing base review process, which is currently underway by Fairborne’s bank syndicate.

In an operational update, the company’s second Cardium horizontal at Harlech

(75 per cent working interest) has been on production for 30 days and has produced at an average rate of 1,000 boepd which includes 165 barrels per day of condensate and 85 bbl. per day of NGLs. The well has had a very strong production profile and is currently producing at 925 boepd.

Fairborne has identified a Cardium horizontal drilling inventory on its existing Harlech land base of 300 net wells (three wells per section spacing) on this regionally-extensive and consistent sandstone reservoir trend.

Using current natural gas and condensate prices, production from the Cardium well has a netback of approximately $24 per barrel of oil equivalent and had cumulative operating income of $720,000 in its first 30 days of production.

Drilling, completion and facilities costs are forecast to be approximately $7 million per well. The company currently plans to drill two additional horizontal Cardium wells in the second half of 2012.

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B36

PIPELINE NEWS May 2012

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PIPELINE NEWS

C-SECTION May 2012

Tim Kramer is general manager of Kramer Ltd.

Kramer Ltd. building new Battleford location Story & photos by Brian Zinchuk Regina – Several years ago, Kramer Ltd. bought an existing farm equipment dealership in North Battleford, establishing a presence in the Battlefords. Now growth in the region has got Saskatchewan’s Caterpillar dealer building a new, much larger location across the river in Battleford.

The move comes as part of an ongoing wave of expansions for Kramer in recent years. There was an enlargement of the Regina facility and doubling the location in Swift Current. Estevan’s location is in the process of roughly doubling in size. Battlefords is new greenfield construction.

“We’re re-investing in our infrastructure to take care of our customers, that’s what we’re doing,” said Tim Kramer, general manager.

“Agricultural has been a big push, but every time we expand for agricultural, the heavy construction people take over, the truck people take over, the lift people take over, the energy people take over,” he laughed. “It’s a wonderful problem.”

In Estevan, mining, oil and gas, and agriculture are all drivers. In Swift Current, it has been oil and gas and agricultural.

Estevan is expected to be done this summer. “I like perfect floors, so we have to wait until it’s perfectly dry,” he said.

Regarding Battleford, it’s all sectors that are behind the new facility. “Customers have recognized we’re trying to help them, and they’re rewarding us by bringing their stuff in, whether its ag, oil and gas, or construction.

“You’ve got Site Energy there. You’re going to see more and more coming from Lloyd. It’s moving in that direction,” Kramer said. “There are people setting up because they’re anticipating oil, but it’s a better place to set up because it’s easier to get access to it.

“You can get workers and infrastructure.”

Asked why Battleford instead of North Battleford, Kramer said the Town of Battleford was very aggressive in its pursuit of Kramer. “They were interested in my business.”

Battleford Mayor Chris Odishaw had long been promoting a “Gasoline Alley” along Highway 16 leading into Battleford from the west. Kramer ltd. will now be the anchor tenant and developer.

“We’re not a land developer. Now I am because we had no choice. They’ve been very helpful.

“It will be in excess of 40,000 square-feet. I have 153 acres. I’ll live on 25-30 like we normally do.

“We’re getting the infrastructure put in place now, the roads and the water.

The sewers we will put in down the road.

“We have a growth group that meets quarterly. We hash out where the lowhanging fruit is and where the long-term fruit is going to be. We try to cost it out, what makes sense, and we have to match it to our cash flows.” ɸ Page C2

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PIPELINE NEWS May 2012

Mining looms large on Kramer’s horizon

You can see how the expansion wraps around the original Kramer building at Estevan, nearly doubling its size. Ledcor is the contractor.

ɺ Page C1 The oil and gas industry is going “terrific” for Kramer Ltd. The Bakken play is the hottest action, but the other plays, like Shaunavon, are consistent.

“Everybody’s focused on the Bakken.

Weyburn and Estevan is where we’re getting the most activity.

Keystone XL Major pipelines like Enbridge’s Alberta Clipper project in 20082009 have been a key portion of the Kramer business, with the company supplying the bulk of rental heavy equipment to the contractors on the Canadian portion of that job.

Asked where Kramer was left when Keystone XL stalled, he said, “It’s just temporary.”

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“Our position is Keystone is going to go.

We suspect the Canadian portion might go this year. We’re hoping it goes this year. They have no choice.

“What’s wonderful is that with all this Obama situation, that’s going to drive the (Northern) Gateway, which is much more exciting.”

“We’re a major supplier of pipeline equipment in Canada.

We’re not going after the customers. They’re coming after us. They want us because of our infrastructure and commitment to they’re industry."

While he acknowledges Northern Gateway will be several years down the road, Kramer said, “It’s moved up on the radar, and that’s wonderful. How much more money can we get out of the Asian market for our oil, as compared to what we’re discounting for the United States?

“They’ll find some compromise. They need the oil down there, and we have the excess capacity. I would think they might be a little bit nervous, the fact that Mr. Harper, God bless his soul, is willing to do the Gateway line and send this to Asia.”

Asked if they had a bunch of equipment lined up, ready to go for Keystone, he said, “Yes we did, and we moved it out. We’ve refreshed.

“As soon as they pull the trigger, we’ll be there to help them.”

Kramer expects there will be two spreads on the Canadian portion of that line.

Mining Mining is critical

for Kramer. Caterpillar has recently acquired mining equipment giant Bucyrus. The Caterpillar website notes, “We have no plans to eliminate Bucyrus products. One of the key drivers of the acquisition was a Caterpillar goal to offer more products to the mining industry. This acquisition gives Caterpillar the broadest line of surface and underground mining equipment in the world. Because there is very little overlap in their product lines, plans are to keep all Bucyrus products as part of the Cat equipment lineup.”

That, in turn, has substantial implications for Kramer, in a province where new potash mines are being announced on a regular basis and Bucyrus had an established presence in coal mining.

“They’re drilling near my cottage. If you can’t find potash in Saskatchewan, you’re not trying very hard,” Kramer said.

“Bucyrus makes underground equipment. There’s product in Saskatchewan already.

Caterpillar is making deliveries of Bucyrus product as we speak with Agrium and some of the other mines. It’s causing us to generate a mining division.”

“Overall, it will be very strategic to us,” he said.

At Estevan and Coronach, the draglines are Bucyrus. Asked if Kramer would end up servicing them, he said, “I certainly hope so. We’ll end up being responsible for the product.”

That changeover may occur later this year. ɸ Page C3

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C3

Several of these excavators were intended to go to work on the Keystone XL pipeline project. Most of the iron intended for that project has been redeployed.

A worker Ɵes rebar for part of the warehouse expansion at the Estevan Kramer Ltd. facility.

ɺ Page C2 Labour Saskatchewan business people accompanied Premier Brad Wall on a recent labour-seeking mission to Ireland. Kramer’s been to the Emerald Isle too, but a little bit earlier.

“We didn’t go with the entourage. We went a month before. We’re always on the road,” he said.

They’ve found quite a few people, but he said, “We’re never going to meet our needs. That’s just not going to happen. We are working with SIAST. I’ve asked them to generate double digit potentials for us a year.

More than 10 but less than 20 a year.

I don’t think, the way we’re going, SI-

AST can produce enough to meet our needs. But with home-grown product, the ‘stick factor’ is much better.”

Technicians are by far the hardest to come by, but partspeople are also high on the list.

Agriculture “We’re seeing an influx of foreign dollars buying extremely large farms and going corporate. They’re looking for a single source supplier to provide all their needs, virtually a system.

That’s something Kramer and our suppliers are good at – full systems.”

Kramer thinks the overall impact of the changes to the Canadian Wheat Board are still being absorbed.

New truck to arrive soon

licence.”

It’s vertical integration, Kramer said, adding that it had been upsetting for drivers and the dealership when Caterpillar stopped selling engines for on-highway trucks to other companies a few years ago.

“Volvo wanted their engines in their chassis. Mac did the same thing.

Freightliner did the same thing with Mercedes, and Paccar has done it with their own engine. There’s no one to sell to,” Kramer said.

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PIPELINE NEWS May 2012

Regina should have been built at Swift Current: Soil expert

This is not your normal lab bench top scienƟĮc instrument. Associate Professor Dr. Shahid Azam, right along with his post-doctoral fellow Dr. Mavinakere Raghunandan, standing beside meso-scale odometer test system, show how the University of Regina has dramaƟcally scaled up its research capabiliƟes for soil properƟes tesƟng.

Regina – When Regina was chosen as the seat of government for the North-West Territories, the man doing the choosing just happened to own a lot of land on the site. But what Territorial Lieutenant-Governor Edgar Dewdney may not have known is that the site he chose was on some of the worst soil in the province on which to build.

That’s a point that’s been the research focus of University of Regina associate professor and professional engineer Dr. Shahid Azam, with the Faculty of Engineering and Applied Science.

“I believe Regina should be at Swift Current – closer to the Rockies, better weather, and better soil,” Azam said with a smile.

The clay soil on which Regina is built is commonly known as “Regina gumbo.” Its physical properties provide an explanation behind why the City of Regina spends about $2 million each year repairing water pipes, why SaskEnergy has been combatting natural gas pipeline leaks, and why cracked basements are a common occurrence in the Queen City.

“In Regina, we have the worst – soil that swells and shrinks,” said

Azam.

Regina clay will expand up to 35 per cent when taken from a totally dry state to a fully saturated state – an incredible amount, according to Azam.

“That’s huge,” he said, noting three per cent is a lot.

Water, in comparison, expands 12 per cent when it freezes.

That 35 per cent expansion is a recently discovered figure, and one that could have a profound impact on future building in and around the city.

“Anything you construct in the city would be impacted by the clay,” Azam said.

A map showing this soil type reveals Regina sits smack dab in the heart of the region with this soil type.

Azam explained that the first three metres in depth is the most greatly affected. The top three metres has the most interaction with the atmosphere and is affected the most by seasonal weather variations.

Deeper than that, and the weight of the soil above it acts to counter the swelling action. As a result, piling to more solid soil are a way to combat shifting in the future. ɸ Page C5

PIPELINE NEWS May 2012

C5

Dr. Shahid Azam shows the grooves in the top plate for the meso-scale odometer test system, used for weƫng of large soil samples.

Lab instructor Peter GuƟw shows students a de-watering pressure vessel. GuƟw was instrumental in designing the showpiece of the lab, the meso-scale odometer test system.

Photo submiƩed

ɺ Page C4 The clay has very low permeability.

As water infiltrates the clay, it swells. When water leaves the soil, it shrinks. This can cause underground pipes to go up and down, causing repetitive strains over the years until they eventually fail. Azam pointed out the City of Regina has 1205 kilometres of water supply pipes alone, never mind other utilities. However, since sewer pipes are generally below that three meter depth, they are less affected.

“The main problem is not only due to clay, but the material of the pipe – asbestos cement,” he said, adding approximately 70 per cent of Regina’s water mains are built of that material. Age, material, climate and soil are all issues for the water mains.

In mid-March, SaskEnergy began its 2012 enhanced safety and pipeline integrity program, performing system upgrades. A press release noted,

“The 2012 program will continue to focus on areas with soil conditions prone to ground shifting when excessive moisture is present – including portions of south Regina, as well as the communities of Leader and Prelate. The program will involve a combination of visual inspection of pipeline, and upgrades to natural gas service lines and other underground and above-ground pipeline facilities.”

Azam would like to work with SaskEnergy, looking into their problems.

Good to be on flat land Azam does not recommend building on a slope on Regina clay, noting “Slopes on Regina clay are not stable.

“They are stable if dry,” he added, with the caveat that it’s impossible to remain dry due to snowmelt and rainfall.

“We are lucky we are on a flat surface.”

Azam is quite familiar with the slope failure concept, since he was doing his PhD in Edmonton when several houses infamously slid down the North Saskatchewan River valley.

He pointed out there are currently lawsuits regarding several residences northwest of Regina near the Deer Valley Golf Course, where slopes were an issue.

In work for Saskatchewan Highways, they found that to combat movement in the clay for embankments, new work should have about 30 centimetres of sand on the top. That’s seen as sufficient to remove the effects of swelling in the embankment.

“This layer will help drain the water,” Azam said. “As long as we isolate the soil from the water, it helps.”

Specialized laboratory In doing their research, Azam, and his associates, laboratory instructor Peter Gutiw and postdoctoral fellow Dr. Mavinakere Eshwaraiah Raghunandan, have several specialized tools. While a typical soil test might be done on a lab bench, their principal testing instrument is scaled up 100 times.

It’s a hulking, heavily built frame with a massive air cylinder capable of putting out 55 tons of force.

All that power is exerted on a thick, circular plate with grooves in the bottom. It looks like a manhole cover.

This plate then goes into a machined cylinder with an opening 60 centimetres across. The vessel is 16 centimetres deep. Into this press, known as a meso-scale odometer test system, goes the samples of soil to be tested. ɸ Page C6

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PIPELINE NEWS May 2012

Research reveals startling fact about Regina clay ɺ Page C5 Sitting in to one corner of the lab is a wrapped sample of soil, a very special sample. Retrieved from a depth of 1.5 metres, this meso-scale sample of undisturbed Regina clay cost several thousand dollars to retrieve. The fact that it is a solid piece, not broken up by the digging process, is key.

“The pipes are in this soil, not loose soil. That is just dirt. This is a high quality sample,” Azam said.

Before the pressure is applied, several instruments are inserted into the sample to measure several soil properties during testing. Sensors of this size would be impossible to use in a bench test.

“We are trying to expel the water from the

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sample, a process called consolidation,” Azam said.

Professional engineer Pete Gutiw, an engineering instructor who played a large part in designing the device, said, “It equates a more representative sample, rather than a tiny puck.”

The meso-scale odometer test system was set up in 2007. The initial design had a hydraulic ram, but it was found that hydraulics would not hold the sustained load for many days at a time, so it was redesigned to use a pneumatic system. The air compressor can occasionally be heard kicking in to maintain pressure.

“He made it practical,” Azam said of Gutiw’s design. “This is a $300,000 facility, funded by the Canadian Foundation for Innovation Leaders Opportunity Fund, as well as the provincial government.”

“There’s a few in the world,” Gutiw said. “You can actually put instrumentation in it.”

On the bench one finds several small but heavily built pressure vessels meant to force water out of small puck-shaped soil samples the size of an Oreo cookie.

Another instrument is a tri-axial cell. Once a cylindrical sample seven centimetres across is loaded into it, the sample is filled with water. A membrane around the sample separates the soil from the water, but allows pressure to be exerted on it. .

In the back corner of the lab is an instrument which applies a sheer force onto a sample, measuring at what point the soil will separate. ɸ Page C7

Small pucks of soil samples can be found inside this pressure vessel tesƟng instrument.

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PIPELINE NEWS May 2012 ɺ Page C6 Field testing In the field, the researchers are using sensors to monitor soil movement under pavement and in a park near the university. The research has been going on for three years. There’s 20 metres of instrumentation in the array, which had to be installed with minimal disturbance. It would be not good to insert the sensors into a hole dug up and backfilled with loose soil.

C7

“Special tools were designed to insert these sensors,” Azam said.

Parameters being measured include water content, soil suction, total earth pressure, soil temperature, and soil movement. Water freezing in the soil creates “ice lenses,” a subject of interest.

They’ve measured surface movement of up to 40 millimetres.

“That’s huge. Even a centimetre is enough to cause a problem,” Azam said.

“Usually water mains break in the fall when the soil is dry,” he said. “It is because of the localized effects that result in wavy pipes. That is where you see the problem.”

Catering For All Occasions Insert: This is what oilsands tailings look like, when dried. There is sƟll residual bitumen in them.

LeŌ: It took 60 days for the oilsands tailings to dry. Dr. Shahid Azam is an environmental systems engineering professor with the University of Regina.

A look at mine tailings Mine tailings, such as those in the Athabasca oilsands, are the bane of all miners. One of the areas of research Dr. Shahid Azam is dewatering oilsands tailings.

In their lab you can find several buckets of oilsands tailings.

A bench centrifuge spinning at 3,000 G, or 3,000 times the force of gravity, can remove the water from the tailings. However, it is not possible to apply such centrifugal forces in the field. Azam noted 100

G are more realistic.

One area of research is the addition of polymers to the tailings, improving their capability of shedding water.

In a basin full of dried, pancake-like tailing can be seen. It took 60 days for them to take that shape, and the tailing had to be in a thin lift to dry. The problem, Azam said, is the suspended particles in the tailings slurry do not want to settle. But on a gentle slope, it may be possible to pour out

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PIPELINE NEWS May 2012

SaskEnergy 2012 enhanced safety and pipeline integrity program begins

Masters presentaĆ&#x;on

Ali Abedini makes a presentaĆ&#x;on to follow graduate students in the University of Regina petroleum engineering program on April 10.

Photo by Brian Zinchuk

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Regina â&#x20AC;&#x201C; A mild winter has allowed SaskEnergy to begin its 2012 enhanced safety and pipeline integrity program several weeks ahead of schedule. Initial system upgrade work began in early April in the Hillsdale neighbourhood, with more crews to be added to the project in the following weeks, once spring thaw is complete.

The 2012 program will continue to focus on areas with soil conditions prone to ground shifting when excessive moisture is present â&#x20AC;&#x201C; including portions of south Regina, as well as the communities of Leader and Prelate.

The program will involve a combination of visual inspection of pipelines, and upgrades to natural gas service lines and other underground and aboveground pipeline facilities. â&#x20AC;&#x153;The safety of our customers remains SaskEnergyâ&#x20AC;&#x2122;s top priority and weâ&#x20AC;&#x2122;re investing more time and money in safety initiatives to meet system challenges, such as those created by changing soil conditions,â&#x20AC;? said Dean Reeve, executive vice president, SaskEnergy. â&#x20AC;&#x153;For 2012, we will spend $40 million on our enhanced safety program. Weâ&#x20AC;&#x2122;ve committed to this higher level of funding for at least the next ďŹ ve years.â&#x20AC;?

Last year, 2,200 natural gas service connections had system upgrade work conducted, with 1,300 of these in the Regina neighbourhoods of Whitmore Park, Hillsdale and Douglas Park. Another 500 services were upgraded in other Regina neighbourhoods, 300 in the communities of Cabri and Kyle, and 100 in other parts of the province. â&#x20AC;&#x153;Another important part of the enhanced safety program is SaskEnergyâ&#x20AC;&#x2122;s leak survey work which has continued throughout the winter months, targeting areas in Regina that had previously been impacted by the high levels of soil moisture and ground shifting caused by extreme conditions in 2011. This enhanced work will continue throughout the spring.â&#x20AC;? Reeve said.

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Sask. Research Council models high temp reservoir conditions

This solvent vapour extracƟon model has been used for several years to test heavy oil recovery strategies.

By Brian Zinchuk Regina – Several years ago, the Saskatchewan Research Council built and put into commission a specialized model designed to mimic the pressures and conditions of an oil reservoir at depth.

While this special piece of research equipment could do just that, it was limited in its ability to test high-temperature conditions, such as those encountered in steamassisted gravity drainage (SAGD) operations. So two years ago, the SRC completed its second model, and cranked up the heat.

“It’s an extension of what we had before,” explained Brian Kristoff, the senior manager for enhanced oil recovery (EOR) for the SRC. The initial unit, the solvent vapour extraction (SVX) model, was

designed to test solventbased extraction at reservoir temperatures of 15 to 30 degree Celsius and pressures at approximately 500 to 600 metres in depth. It was used extensively for the Petroleum Technology Research Centre’s JIVE project. JIVE looked into solvent-based extraction in the heavy oil areas of Saskatchewan, particularly in the Edam area.

“We found as long as the viscosity of the oil wasn’t too high, it had some potential,” Kristoff said.

The new model is physically the same size, but provides extended temperature range.

“The key to heavy oil is viscosity reduction,” he said. That can be achieved through heat, or dilution with a solvent.

The new model is

known as the TSVX model, which stands for thermal solvent vapour extraction. It can study parameters and larger effects in reservoirs that other methods can’t. It’s capable of operating in the range of temperatures seen in SAGD. The TSVX model replicates reservoir conditions at approximately 500 m.

“As far as we know, these two laboratories have the largest physical models of their type in the world,” Kristoff said. ɸ Page C10

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PIPELINE NEWS May 2012

One of the largest models in the world

The Russians make some very large cores, as seen in the centre here.

ɺ Page C9 A major part of the impetus for the new model was to figure out how to commercialize Saskatchewan’s oilsands, which, to date, has not happened.

“This model was partially funded by Oilsands Quest,” Kristoff said.

They put in $1 million for the project, half its initial cost, but then promptly started running into financial problems of their own and were unable to actually capitalize on its usage for their research.

Over the last year, the company has been doing its best simply to stay afloat, selling off assets and the like.

“They’re struggling, no doubt,” Kristoff said.

Some of the challenges in developing oilsands are that the shallow reservoirs also limit the amount of pressure, steam and temperature one can use for in situ extraction. You have to operate at lower pressure. Lower temperature means less reduction in viscosity, and thus lower flow rates.

“There is some concern about the integrity of the cap rock, not only here, but in some reservoirs in Alberta,” Kristoff said.

The facility is seeing substantial use for investigation of oilsands on the Alberta side of the border.

And while it was conceived with heavy oil and oilsands in mind, it has not been limited to that.

“It was designed for extra heavy bitumen and steam-solvent type extraction. Less than half of our work has been in that. The rest is in other applications,” he said.

“Because it is a large pressure vessel and fairly adaptable, we are using it for other work,” Kristoff said. That includes other unconventional resources and processes, and heavier oil. Some protocols are tests of new processes, while others are twists on hybrids. ɸ Page C11

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PIPELINE NEWS May 2012

C11

ɺ Page C10 The pressure vessel features thick walls and a large lid. The SVX model is horizontal and uses water in it to provide pressure, while the TSVX model is vertical and uses an oil for its pressureexerting medium. It also is substantially insulated to deal with SAGD temperatures. In each a series of thermocouples links the model inside to computerized instrumentation outside.

“We can run the system up to 250 C. For just steam, we can go closer to 300 C,” Kristoff said.

“We can go from pure solvents to SAGD – pure steam, and any combination in between.

He added SAGD operations typically use 220 to 280 C. Fine glass beads are used to simulate the formation. “The porosity is fixed when you pack it, close to reservoir conditions. The permeability is, too,” Kristoff said.

Asked why they don’t simply use produced sand that comes up from the wells, he responded that what gets produced isn’t actually representative of the reservoir. It’s usually the fine material that comes up.

Using a known entity like glass beads also assists in controlling the parameters of the tests. ɸ Page C13

Brian Kristoī is the the senior manager for enhanced oil recovery (EOR) for the Saskatchewan Research Council.

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PIPELINE NEWS May 2012

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Russians take advantage of Saskatchewan lab

oilsands,” Kristoff said.

“A lot of work we do is through PTRC via the STEPS program. We do some single client projects, about half of our work, and it’s not just using this model. We have two models and core displacement equipment,” Kristoff said.

“The University (of Regina) is

C13

a big part of STEPS. Our work is separate of that. Theirs is more basic.

Our focus is more applied. We’re closely linked to the field application side.”

Some of that work is done with core samples. The models, however, are three orders of magnitude larger than a core holder.

This two-year old thermal solvent vapour extracƟon model can simulate the condiƟons of a reservoir 500 metres deep, and at SAGD temperatures. It could play a key role in unlocking the secret of exploiƟng Saskatchewan’s oilsands.

ɺ Page C11 It can take four to six weeks to run a test, and sometimes longer.

While running a test in the lab can be useful, some companies are foregoing that and simply running field tests directly. Kristoff explained “If you know what you want to do already, you may just try it. If it doesn’t run, you may not know why. Of the many SAGD properties, some are exceptional, some are good, and some are marginal. Oil companies exploit the best first and then move to the marginal.

“With mining, you know exactly what you will get. In situ is a lot less.

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are quite satisfied. It’s 95 to 98 per cent for surface mining.”

Half of Canada’s oilsands are too deep to mine, but too shallow for SAGD, he said.

One interesting piece of work is large diameter core displacement testing for Russian giant Luk Oil. The 10 centimetre diameter, one metre long core samples are the largest Kristoff is aware of that have had core displacement testing done.

The model units are booked until the third quarter of this year.

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PIPELINE NEWS May 2012

Shifting Gears

One Woman’s Perspective on Life, Liberty and the Pursuit of Land Locations

By Nadine Elson We needed another driver. The boss and I, with some help from my husband, Bruce, had been the only drivers since I had started in January of that year. It was now 11 months later, and the business had grown.

The boss soon hired Buddy. Buddy did not have a commercial driver’s licence but had experience in the oil patch having worked as a swamper, a labourer who helps the driver of oilfield trucks by securing loads and doing the grunt work. The boss began to train him by taking him along on day trips.

The boss had some misgivings about Buddy’s work history, but felt reassured with his experience as a swamper. My husband was not

Does he “play well with others?” so sure as there had been an incident which distinctly showed Buddy’s lack of good judgment. I had no opinion as I had only met him once and only briefly.

I changed my mind the day we worked together. “I know it is not my business,” I told the boss by phone later that afternoon, referring to the hot shot business. “But neither you nor I will have to worry about the business for long if he continues to work because you won’t have any business,” I said dramatically.

What had happened to change my mind?

That day the boss had dispatched me on a very unusual job, a kind of rescue mission.

Another hot shot company had been loaded with 40 joints of tubing. The length of the tubing, nearly as long as the trailer, was 30 feet.

The driver had proceeded out of town when the trailer suspension broke. He was unable to take the tubing further on to the lease, so had turned around and started back. The consultant for the oil company had called us to meet the driver at the transport company so they could reload the

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tubing onto my trailer using their forklift.

I was hooking on the trailer when I was notified of a change in the plan. The driver could not drive any further and had pulled into a power tong business next to the highway. “What am I to do now?” I asked the boss. He replied that the tubing would have to be unloaded by hand.

“By hand?” I squeaked. “Did you say 40 joints of tubing unloaded by hand?” They had used a forklift to load the joints on the trailer initially.

The boss told me to drive my trailer as close to the other trailer as I could without exchanging paint. He thought that we could possibly roll the tubing from one trailer to the other. He would dispatch Buddy to help.

When I got to the power tong business, I saw where the other driver had parked. Driving around the building with my trailer in tow, I saw something incredible! There, parked under the eaves close to the overhead bay doors, was a skid steer – a mini forklift.

I parked the truck and trailer, and ran around to the shop. I explained the problem to the man in charge. Within minutes, we had the skid steer, a driver for it and all the shop hands helping to unload and reload the trailers.

That should have been the end of the story.

However, Buddy had arrived to help. His swamper background came in handy for the arrangement of the tubing on my trailer. But he started to become agitated at how the skid steer operator was loading the tubing. He had lost sight of the fact that this was a power tong business not a tubing loading business, and the machine being used was a skid steer not a large fork lift. His disgust was evident as he gestured with angry arm movements and the skid steer operator in turn got mad. ɸ Page C15

PIPELINE NEWS May 2012

C15

Kindergarten report card may be the key to hiring ɺ Page C14 I hadn’t cared how the tubing was loaded just so long as I could strap it down. But in a flash, I realized that I was in real danger of loading the rest of the tubing by hand if the guy with the skid steer got really mad and left. I ran over and told him that I was the one that was driving the truck/trailer and that I really, really appreciated the help that they were giving me. I then told Buddy to go sit in his truck! The rest of the tubing was reloaded without incident.

Later that afternoon, recounting the day’s events to the boss, I thought of how hard we had been working to establish good working relationships with consultants in the patch and with the shops in the service sector.

“You know,” I told the boss, “you’re not in the trucking business.

You’re in the relationship business. You’re building those relationships by supplying trucking services, so the people you hire should be helping you build relationships not tear them down. From what I saw today, Buddy will hinder, not help you.”

To get a position in the oil patch, we often need to prove we have CPR, First Aid, and H2S courses along with a valid driver’s licence. Perhaps bosses should be asking to see a copy of the applicant’s kindergarten transcript to see if he or she “plays well with others.”

Nadine lives in Estevan, with her husband and family, and works as a hot shot driver in the oil patch regularly delivering goods in and around Estevan and Shaunavon, and Sinclair and Waskada, Man. Her mission, beyond delivering the goods quickly, is to have every interaction be a positive one. She can be reached at missiondriver@hotmail.ca

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PIPELINE NEWS May 2012

PIPELINE NEWS May 2012 The auditorium in the new Saskatchewan Energy Training InsƟtute was a perfect Įt for the seminar

C17

Southeast Environment & Safety Seminar The spacious lobby had plenty of room for booths.

The Southeast Environmental and Safety committee is a non-profit organization which promotes safety and environmental issues in Southeast Saskatchewan. The committee was established in 1996 to address the need for information on safety and environmental issues and industry standards which may affect everyday operations. This information is presented through a one day seminar, which is held alternately between Estevan and Weyburn. This year’s event was held on March 21 at the new Saskatchewan Energy Training Institute in Estevan.

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C18

PIPELINE NEWS May 2012

A&B Pipeliners celebrates 55 years

ArneƩ & Burgess specializes in pipeline and facility construcƟon.

Photo submiƩed

Calgary– This past February, A&B Pipeliners, also known as Arnett & Burgess Oilfield Construction Ltd., celebrated its 55th year in business.

It was incorporated Feb. 22, 1957.

Carey Arnett is vice-president of corporate development, and a third generation member of one of the families which founded the business.

“We feel like we’ve got a lot of grey hairs around here,” said

Arnett.

“I don’t know of any pipeline construction companies as old as us.

That’s not to say there aren’t any, but I’m not aware of them.”

She points out they have never gone bankrupt, and never been restarted. The management is now in the second and third generations.

Tom Arnett, Carey’s father, is president and CEO. He was general manager, and ran the field office in the ’80s

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before taking over in 1988. Tom has worked with the company for 42 years.

“Our main business is pipeline and facility construction,” Carey said. Last summer they spent a lot of time doing dig-ups on TransCanada’s Keystone line.

This past winter has seen work at Waskada in Manitoba and near Estevan in Saskatchewan. Alberta, the company’s home province, saw a number of dig-ups for TransCanada, as well as work around Grande Prairie, Red Deer and Whitecourt, to name a few of the projects.

A&B set up an office in Regina last year.

Its corporate offices are in Calgary, while the main field office is in Sedgewick, Alta. They also have operations in Athabasca and Bashaw.

The company’s total workforce is just shy of 500 people. About one-fifth of that work in Saskatchewan and Manitoba.

The high price of oil and rock-bottom price of natural gas has led to a shift in their work.

“Our business used to be 80 per cent gas

five years ago. Now it’s 80 per cent oil,” Carey said. “It’s been quite a shift. A lot of independents are shutting down gas wells.”

The company is remaining busy, however.

“The next five years, all we can see is work.

“We’re in a serious skilled labour shortage for the industry in general. We’ve been offered a lot more work than we could comfortably take on this winter.”

The company is working with a number of First Nations to set up training programs.

“We’re going to have on-the-job training,” she said.

While they are working with six bands in particular, she noted it has to be open to all First Nations people, since there are not enough people in any one band to feed a training program.

Last year, 50 kilometres of projects had almost half its local workforce from surrounding First Nations, Carey said.

“A pipeline labourer is a very skilled position,” she said. ɸ Page C19

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Éş Page C18 The bands are working together to place people in the program. â&#x20AC;&#x153;We want to get six right oďŹ&#x20AC; the bat.

Weâ&#x20AC;&#x2122;re hoping it will be a continuous project. When one graduates and is good to go without a mentor, weâ&#x20AC;&#x2122;ll enrol another.â&#x20AC;? â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re kind of excited and quietly proud weâ&#x20AC;&#x2122;ve reached this milestone,â&#x20AC;? Carey said. â&#x20AC;&#x153;We might be old, but weâ&#x20AC;&#x2122;re not tired yet. Weâ&#x20AC;&#x2122;ve grown exponentially, and we have a land of opportunity ahead of us.

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PIPELINE NEWS May 2012

CAODC uploads better rig tech web site Calgary – The Canadian Association of Oilwell Drilling Contractors expects the first task of any new recruit is to drill down the links on its new its employment and training information website.

CAODC launched a redesigned website at rigtech.ca in March with information to counter the old stereotype of rig work as unskilled, unsafe labour.

Industry safety statistics show just how wrong myths about rig work are according to CAODC. For drilling contractors, industry’s return to healthy activity after the 2008-2009 downturn meant significant hiring and training.

CAODA reports drilling contractors managed the manpower pressures during that period without compromising the industry safety record.

Total recordable incident frequency has held steady at near record lows, lows that are 60 per cent below what they were 10 years ago.

“Our 2012 stats say something about this workforce,” said Nancy Malone, vicepresident of operations for CAODC. “These are skilled professionals who are getting the job done. That’s also the message behind rigtech.ca.”

The site serves two audiences: new jobseekers exploring career options and rig employees apprenticing as rig technicians, one of Canada’s 52 Red Seal trades.

The site directs new jobseekers to the “green hands” link for new hires while industry employees are directed to the rig technician link.

CAODC expects the rig technician side of the site will be busiest in coming months during spring breakup when rig activity slows.

Field employees use the slowdown to upgrade industry-specific certifications and complete the classroom component of their apprenticeship.

Rigtech.ca provides forms, course outlines and course dates.

The website also points out that employees must have floorhand experience and be promoted to the more senior motorhand position before they can register to apprentice.

“The rigs are a unique work environment. They demand a specific personality and have high entry level turnover, said Malone.

“This is why trades training starts at a more senior crew position. The industry didn’t want an apprenticeship commitment to discourage those who are new to rig work, but the journeyman certificate is important. It helps inexperienced applicants understand the career potential.

“The site is very clear about the progression from entry level worker to experienced crew member to rig tech apprentice.”

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PetroBakken sees busy and productive Àrst quarter Calgary – PetroBakken Energy Ltd. is catching its breath during spring breakup after a busy and productive first quarter of activities regarding which they reported on April 11.

In fact, the company drilled 21 (15 net) wells and completed 28 (21 net) wells in March in advance of spring thaw.

PetroBakken ended the month with an inventory of 22 net wells waiting to be completed or placed on production.

Of these wells, five were in the Bakken, 12 were in the Cardium, and the remaining five were in their Saskatchewan conventional and Alberta and British Columbia business units.

While the company will have no active drilling rigs in its operation areas during breakup, they are able to continue completion and tie-in operations, primarily in their Cardium business unit.

The company expected to reduce its corporate inventory of wells waiting to be brought on production to 16 net wells by the end of April.

In the first quarter, PetroBakken drilled 68 (47 net) wells including 32 (23 net) wells in the Bakken, 24 (17 net) wells in the Cardium and 12 (7 net) wells in the their Saskatchewan conventional business unit.

Average production for the first quarter of 2012 exceeded 46,500 barrels of oil equivalent with a 87 per cent from light oil and natural gas liquids.

The company’s first quarter average production was comprised of over 20,700 boepd from their Bakken business unit and over 16,400 boepd from their Cardium business unit.

The remainder of production was generated by their conventional and business units in Saskatchewan, Alberta and British Columbia.

In March, average production

was over 44,200 boepd with approximately 19,000 boepd from the Bakken business unit and approximately 16,300 boepd from the Cardium business unit.

PetroBakken attributes the slight decrease in average production in March to the sale of producing assets that were completed in February and mid-March.

They sold approximately 450 boepd (75 per cent gas weighted) of non-Cardium central Alberta assets for gross proceeds of $16 million.

In the first quarter of 2012, PetroBakken completed four transactions to sell non-core assets that were outside of its key focus areas or were non-operated, low working interest assets.

The assets included the previous-

Need a

ly announced sales of a minor working interest in the Weyburn unit and certain non-core Bakken assets.

The first quarter transactions included the recent sale of their mineral rights in Montana for $7.8 million and a portion of their Duvernay mineral rights in central Alberta for $82.5 million.

The four transactions in 2012 provided gross proceeds of $622.5 million and consisted of approximately 3,480 boepd of production and 10,212 million boepd of proved reserves.

PetroBakken currently has more than 190 net sections of land in central Alberta, focused on light-oil resource plays targeting four zones: Nordegg, Montney, Duvernay and Swan Hills.

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PIPELINE NEWS May 2012

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Third time lucky for Oilsands Quest sale Calgary – It was third time lucky for Oilsands Quest Inc. when the company closed the sale of its Eagles Nest asset to Cavalier Energy Inc. for $7.01 million on March 23 after two previous sales fell through.

The bitumen asset held by the Eagles Nest lease is located north of Fort McMurray.

Cavalier Energy is a new business entity that was created by Calgarybased Paramont Resources Ltd. in November to fund and develop its growing oilsands assets.

According to a report in the Calgary Herald, Paramont will add the Eagles Nest asset to its own growing portfolio of Crown oilsands leases in the western Athabasca region of Alberta for future development.

In another financial matter, Oilsands Quest reported in a March 27 news release that the company signed definitive loan agreements for a previously announced debtor-in-possession (DIP) financing in the amount of $2.85 million.

Funds from the DIP facility are now available to the company for the purposes of funding operating costs and other expenses while proceeding with the solicitation process.

Oilsands Quest gained approval from the Alberta Court of Queen’s Bench on Jan. 12 to solicit offers to acquire, restructure or recapitalize itself under the Companies’ Creditors Arrangement Act or CCAA. The United States District Court for the District of Colorado, where Oilsands Quest is based, notified the company on March 19 that it approved a settlement relating to a derivative lawsuit relating to the company’s plan to explore the Pasquia Hills region of Saskatchewan in 2010.

The lawsuit captioned Make a Difference Foundation, Inc. v. Hopkins, et al., No. 10-cv-00498 WYD-MJW (D. Colo.) is substantially similar to the proposed settlement that was disclosed on Nov. 9, 2011.

Details of the case settlement are available online as is investor information.

Oilsands Quest continues to operate under the protection of the CCAA with the assistance of a court-appointed monitor.

The company’s common shares remain halted from trading until either a delisting occurs or until the NYSE permits the resumption of trading.

PIPELINE NEWS May 2012

C23

Lakeland board welcomes Onion Lake adviser Vermilion, Alta. â&#x20AC;&#x201C; Lawyer Crystal Fafard, who is currently the chief executive adviser to Onion Lake Cree Nation, is the newest member to be named to

Crystal Fafard is the new board member of the Lakeland College Board of Governors.

Blackdog updates winter operations

the Lakeland College Board of Governors.

Fararâ&#x20AC;&#x2122;s appointment to the board was announced on March 28, and was eďŹ&#x20AC;ective immediately. She will be the representative for the Lloydminster area for a three year term.

Fafard has extensive experience in areas relating to Aboriginal economic and business development, First Nations law, executive and corporate governance, tax law, oil and land development, investments and ďŹ nancing, and relationship building between business, industry, First Nations and various stakeholders.

As the newest member of Lakeland Collegeâ&#x20AC;&#x2122;s board of governors, she looks forward to oďŹ&#x20AC;ering her experience and skills. â&#x20AC;&#x153;I am very excited to be a part of the board of governors of Lakeland College and hope that the experience and background I bring will be a complement and oďŹ&#x20AC;er some unique perspectives to the board,â&#x20AC;? she said.

Fafard earned a law degree from the University of British Columbia in 2001 and has gone on to work for the government of Saskatchewan as director of consultation with the Ministry of First

Nations and MĂŠtis Relations.

As an educator and presenter, she has lectured for the University of Saskatchewan and the First Nations University of Canada.

Fafard has also presented at conferences including the Canadian Institute, Association of Professional Community Planners of Saskatchewan, Northern Administrators Conference, Canadian Aboriginal Business and Economic Development Forum, and the Canadian Bar Association.

Fafard is a member of several associations and has served on various boards of directors including Enterprise Saskatchewan, Saskatchewan Indian Equity Foundation, First Nations Bank of Canada, Canadian Bar Association, and the Law Society of Saskatchewan.

In 2008 she was named a â&#x20AC;&#x153;person of inďŹ&#x201A;uenceâ&#x20AC;?

by Saskatchewan Business Magazine for her contributions to the Saskatchewan economy.

She has also authored an unpublished book about Aboriginal and treaty case law in Canada.

Lakeland College has campuses in Lloydminster and Vermilion, Alberta, and serves over 8,000 students per year.

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Blackdog Resources Ltd. reported on April 9 they repaired a pump on a shut-in well At White Bear, Saskatchewan, and returned the well to full production in February 2012. The Whitebear well has been shut-in for 18 months and is now back to its historical production levels. The aggregate cost to restart the White Bear well was under $15,000.

The White Bear well repairs were scheduled originally for completion in the summer of 2011, but were delayed due to severe ďŹ&#x201A;ooding in the area for several months and again by the lack of available service equipment when the ground ďŹ nally froze.

The company also intends to reactivate production from two more wells at White Bear during the summer of 2012. The company has a 100 per cent working interest in all three of these wells at White Bear.

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PIPELINE NEWS May 2012

Carbon sciences moves GTL yard sticks Santa Barbara, Calif. – Carbon Sciences Inc. had another eureka moment in its ongoing quest to research and develop a commercially viable catalyst for the gas to liquids (GTL) market with a base catalyst developed at the University of Saskatchewan.

The California research company successfully tested a new version of its natural gas dry reforming catalyst that can process high CO2 content natural gas at high efficiency, resulting in significant economic and environmental benefits in GTL technology.

GTL technology transforms carbon dioxide and methane into synthesis gas (syngas), a basic feedstock for producing gasoline and other fuels.

In a news update on April 5, the company stated it believes its breakthrough catalyst can help to accelerate the growth of the GTL fuels market and turn natural gas fields with high CO2 content into money makers.

The company says currently natural gas production is only economically viable when the CO2 content is less than 10 per cent of the total volume.

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At that level, the CO2 is removed and typically released into the atmosphere.

Where the CO2 content is higher, the removal

“While the market for our dry reforming catalyst is further out, the global impact may be signiĮcant”

- Byron Elton CEO Carbon Sciences Inc.

process is prohibitively expensive, making those fields economically stranded, according to company CEO Byron Elton.

“According to the U.S. Geological Survey, there are many gas fields with CO2 concentrations ranging from 10 to 99 per cent within the continental U.S., particular in Texas, the Rocky Mountains, and the Gulf Coast,” said Elton.

“We believe our catalyst will make these high CO2 gas fields economically viable, and encourage the pooling of multiple gas fields into much larger natural gas steams with high CO2 content.

“Additionally, CO2 captured from sources such as power plants can be added to low CO2 content natural gas and used to cost-effectively produce large quantities of clean and green liquid transportation fuels and industrial chemicals.”

The company’s successful test feed included CO2, methane and steam.

The dry reforming catalyst licensed, to Carbon Sciences by the U of S in December 2010, offers high conversion rates with no significant carbon buildup, which means the catalyst remains active over long periods of time.

Carbon Sciences said the initial verification test, performed at 900 C and elevated pressure, reveals their dry reforming catalyst functioned at a steady natural gas conversion efficiency of 99 per cent with no indications of catalyst coking or deactivation.

The resulting 2:1 ratio syngas (a hydrogen and carbon monoxide mixture) is ideally suited for direct use by existing gas-to-liquids (GTL) processes in the production of liquid transportation fuels such as gasoline, diesel, and jet fuel.

Carbon Sciences is also aiming to develop a catalyst that will lower the cost for small to medium size GTL plants that use steam reforming of natural gas to syngas as the first step in the conversion process.

“We are also making great progress in the development of our high performance steam reforming catalyst for use in the current $150 billion hydrogen production market,” said Elton.

By reducing the cost of the steam reforming section, the most cost intensive part of a GTL system, the company intends to significantly reduce the cost of producing gasoline, diesel, jet fuel, and other GTL products from natural gas.

“While the market for our dry reforming catalyst is further out, the global impact may be significant,” added Elton.

“Increasing the use of abundant, affordable and clean natural gas to make transportation fuels will reduce our dependence on petroleum and help lead to energy security.”

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PIPELINE NEWS May 2012

C25

Feds unveil fast track review plans Toronto – The federal government has announced its plan to streamline the review process and environment assessments for major economic projects in Canada.

The so-called Responsible Resource Development plan was unveiled on April 17 by Joe Oliver, minister of Natural Resources while he was visiting a Toronto company that produces high-performance liquids and powder coating used on oil and gas pipelines in Canada and other countries.

“The Harper government’s plan for Responsible Resource Development will create good, skilled, well-paying jobs in cities and communities across Canada, while maintaining the highest possible standards for protecting the environment,” said Oliver during a news conference at Automatic Coating Ltd. “It will help prevent the long delays in reviewing major economic projects that kill potential jobs and stall economic growth by putting valuable investment at risk.”

Executives from the oil and mining sectors say efforts to end current duplication and to streamline the review process will improve the economics of capital-intensive projects and help attract investment to Canada.

In the next 10 years, more than 500 projects representing over $500 billion in new investments are proposed across Canada.

The streamlined major project review plan will create jobs according to the federal government by: • Moving toward a “one project, one review”

system for reviews of major projects by recognizing provincial processes as substitutes or equivalents to federal ones as long as they meet the requirements under the Canadian Environmental Assessment Act • Ensuring decisions by the Canadian Environmental Assessment Agency on whether a federal environmental assessment is required are made earlier in the process (within 45 days) • Setting timelines for hearings and assessments; namely, 24 months for panel reviews, 18 months for National Energy Board hearings and 12 months for standard environmental assessments • Setting legally binding timelines for key regulatory permitting processes, including the Fisheries Act, the Species at Risk Act, the Navigable Waters Protection Act, the Canadian Environmental Protection Act and the Nuclear Safety and Control Act • Consolidating the number of organizations responsible for reviews from more than 40 to three: The Canadian Environmental Assessment Agency, the National Energy Board and the Canadian Nuclear Safety Commission • Focusing federal assessment efforts on major projects that can have significant environmental effects • For the first time, introducing enforceable environmental assessment decision statements under the Canadian Environmental Assessment Act. This means proponents of major projects will have to comply with conditions set out in the decision statements or may face tough financial penalties.

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The proposed penalties could range from $100,000 to $400,000 • Requiring follow-up programs after all environmental assessments to verify the accuracy of the predictions regarding potential environmental effects and to determine if mitigation measures are working as intended • For the first time, providing federal inspectors with the authority to examine whether or not conditions of a decision statement are met • For the first time, authorizing the use of administrative monetary penalties for violations of the Canadian Environmental Assessment Act, the Nuclear Safety and Control Act and the National Energy Board Act. These penalties will be designed to address small contraventions quickly so that larger issues do not arise in the future. Further details on the penalties will be available once legislation is introduced • The proposed penalties could range from $25,000 to a maximum of $100,000 for violations of the Nuclear Safety and Control Act, and the National Energy Board Act, while the range of penalties under the Canadian Environmental Assessment Act will be established through regulations • Providing more than $35 million over two years for marine safety and $13.5 million over two years to strengthen pipeline safety, including regulations to strengthen the tanker safety regime and increasing the number of oil and gas pipeline inspections each year by 50 per cent, from 100 to 150 inspections.

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C26

PIPELINE NEWS May 2012

CAPP gives thumbs up to regulatory reform Calgary – The federal government’s plan to speed up Canada’s regulatory process for natural resource projects will generate more jobs and a stronger Canadian economy while ensuring continued environmental performance.

That’s the belief of Canada’s upstream oil and natural gas producers in a collective response to the federal budget announcement on March 29.

“Broad-based regulatory reform is fundamental to attracting investment that creates Canadian jobs, prosperity and economic growth,” said Canadian Association of Petroleum Producers president Dave Collyer in a news release.

“The government’s plan will improve the timeliness and efficiency of the decision-making

process while the regulatory scrutiny that Canadians expect remains intact.”

The upstream petroleum industry is the largest single private sector investor in Canada – investing over $50 billion each year and employing more than 500,000 Canadians.

Regulatory bottlenecks in the current system have often led to project delays or outright cancellations due to missed market opportunities, with a resultant reduction in economic benefits that would flow from these delayed or foregone investments.

“The changes broadly outlined in the federal budget will improve our business climate and competitiveness without compromising our commitment to responsible, sustainable devel-

opment,” said Collyer.

An efficient, effective regulatory system must maintain a high standard of environmental performance - all Canadians expect responsible environmental outcomes - while recognizing the critical importance of energy security, reliability and economic growth.

“We must move to more efficient processes, time-limited decision-making and better coordination both within and among governments to eliminate regulatory overlap,” said Collyer.

“We also encourage federal-provincial coordination of regulatory reform initiatives, and encourage both levels of government to clarify expectations regarding Aboriginal consultation.”

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PIPELINE NEWS May 2012

Whitecap develops Fosterton area loss of $8.32 million or 36 cents a share in the earlier period.

In 2011, Whitecap focused on three light oil regions: the Peace River Arch area in northwestern Alberta, mainly on the Montney-Sexsmith oil waterďŹ&#x201A;ood asset at Valhalla North; the east Pembina area of westcentral Alberta; and the Fosterton area of southwest Saskatchewan, where eďŹ&#x20AC;orts were focused on the Roseray

and Cantuar formations, management said.

During the year, the junior drilled 60 (48 net) wells, all successful, compared to 17 (11 net) wells drilled in 2010. In west-central Alberta, the company drilled 37 (32 net) horizontal, multi-fractured light oil Cardium wells, also drilling 15 (10 net) wells at Valhalla North, of which seven (four net) were a continuation of the companyâ&#x20AC;&#x2122;s Montney-Sexsmith

s

Sharply higher production boosted cash ďŹ&#x201A;ow and revenue for Whitecap Resources Inc. in the fourth quarter and full year.

Production in the fourth quarter more than tripled, while full-year 2011 volumes nearly quadrupled comparable 2010 ďŹ gures.

Average production rose to 7,806 bbl. of oil equivalent per day in the quarter from 2,014 boepd in the 2010 period, thanks mainly to oil-weighted acquisitions and internallygenerated growth.

Full-year volumes were also sharply higher than 2010 ďŹ gures, for similar reasons.

Earnings in both reporting periods overcame losses posted in the comparable 2010 periods. In the fourth quarter, earnings soared to $3.23 million or four cents per share from a loss of $4.12 million or 12 cents a share in the ďŹ nal quarter of 2010, while full-year earnings jumped to $25.51 million or 39 cents per share from a

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CAREER GuĂ&#x2014;de

waterďŹ&#x201A;ood program in the Peace River Arch.

Another six (ďŹ ve net) wells were geared to developing the Roseray and Cantuar light oil formations in Saskatchewanâ&#x20AC;&#x2122;s Fosterton area. Whitecap spent a total of $139.3 million in development capital during the year providing â&#x20AC;&#x153;signiďŹ cantâ&#x20AC;? organic growth from its development drilling program (the ďŹ gure excludes acquisitions).

WANTED

- Part or full time truck drivers needed must have 3A or 1A licenses.

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Experience and tickets an asset but not necessary should the right applicant apply.

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Sub-Contractors Wanted for Lloydminster, Maidstone, Neilburg & Edam Qualifications: â&#x20AC;˘ Class 1 License â&#x20AC;˘ Current Driverâ&#x20AC;&#x2122;s Abstract â&#x20AC;˘ Truck equipped with fluid pump and positive air shut down

Send resumĂŠs to: Human Resources Phone: 877-875-5358 Fax: 780-875-5825 Email: info@heavycrudehauling.com

C28

PIPELINE NEWS May 2012

Immediate Full-Time Position Available

PRESSURE WELDER / STRUCTURAL WELDER

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Full-Time Position Available • The successful applicant must have valid drivers licence, H2S Alive, 1st Aid / CPR and Fall Arrest safety courses • Must pass drug and alcohol testing • Health benefits and RRSP plan offered • Wages based on experience • Non local applicants must be willing to relocate Please apply to Joanne by email, fax or in person:

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NOW COME JOIN OUR TEAM! We’re hiring for various Pipeline construction projects throughout SE Saskatchewan Over 50 years strong, Arnett & Burgess Oilfield Construction Limited safely provides quality pipeline construction, facility installation, pipeline integrity, custom fabrication, maintenance and related construction services to the energy industry.

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PIPELINE NEWS May 2012

C29

CAREER Gu×de

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Canyon is the fastest growing fracturing company in North America. We deliver quality customized pressure pumping and service solutions to the oil and gas industry, improving our industry one job at a time.

If you’re looking for a career with a leading organization that promotes Integrity, Relationships, Innovation and Success, then we’re looking for you. Now hiring Canyon Champions for the following positions:

<ĞLJ ĐƚŝǀŝƚŝĞƐ͗ • ZĞƐƉŽŶƐŝďůĞ ĨŽƌ Ăůů ĂƐƉĞĐƚƐ ŽĨ ŽŶͲƐŝƚĞ ƚŽŽů ƐĞƌǀŝĐĞƐ ŝŶĐůƵĚŝŶŐ ŵŽďŝůŝnjĂƚŝŽŶ ŽƉĞƌĂƚŝŽŶƐ͕ ŵĂŝŶƚĞŶĂŶĐĞ͕ ũŽď ƌĞƉŽƌƚŝŶŐ͕ ĂŶĚ ƚŝĐŬĞƚŝŶŐ ũŽď ƚŽ ũŽď͖ • ĚĂƉƚŝŶŐ ƚŽŽů ĐŽŶĨŝŐƵƌĂƚŝŽŶƐ ƚŽ ƚŚĞ ĐůŝĞŶƚ͛Ɛ ŶĞĞĚƐ ƚŽ ĞŶƐƵƌĞ ƚŚĂƚ <ŽďŽůĚ͛Ɛ ƐĞƌǀŝĐĞ ĐŽŶƚƌŝďƵƚĞƐ ƉŽƐŝƚŝǀĞůLJ ƚŽ ƚŚĞ ƐƵĐĐĞƐƐ ŽĨ ƚŚĞ ĐůŝĞŶƚ͛Ɛ ĐŽŵƉůĞƚŝŽŶƐ ƉƌŽŐƌĂŵ͖ • DĂŝŶƚĂŝŶŝŶŐ ĐůŝĞŶƚ ƌĞůĂƚŝŽŶƐ ďLJ ŬĞĞƉŝŶŐ ƚŚĞŵ ŝŶĨŽƌŵĞĚ ĂŶĚ ĚĞĂůŝŶŐ ǁŝƚŚ ŽƉĞƌĂƚŝŽŶĂů ŝƐƐƵĞƐ ĂƐ ƚŚĞLJ ĂƌŝƐĞ͖ • /ĚĞŶƚŝĨLJŝŶŐ ĂƌĞĂƐ ĨŽƌ <ŽďŽůĚ ŽƉĞƌĂƚŝŽŶƐ ĂŶĚ ƚĞĐŚŶŽůŽŐLJ ŝŵƉƌŽǀĞŵĞŶƚƐ͖ • ƐƚĂďůŝƐŚŝŶŐ ŝŶĚƵƐƚƌLJ ĐŽŶƚĂĐƚƐ ĂŶĚ ƌĞƉƌĞƐĞŶƚŝŶŐ ĂŶĚ ƉƌŽŵŽƚŝŶŐ Ăůů ŽĨ <ŽďŽůĚ͛Ɛ ƐĞƌǀŝĐĞƐ ŝŶ ƚŚĞ ĨŝĞůĚ͖

YƵĂůŝĨŝĐĂƚŝŽŶƐ͗ • ŵŝŶŝŵƵŵ ŽĨ ϯ LJĞĂƌ͛Ɛ ĞdžƉĞƌŝĞŶĐĞ ƌƵŶŶŝŶŐ ĚŽǁŶŚŽůĞ ĐŽŵƉůĞƚŝŽŶƐ ƚŽŽůƐ͘ • sĂůŝĚ ĨŝĞůĚ ƚŝĐŬĞƚƐ ŝŶĐů͘ t,D/^͕ ,Ϯ^ ĂŶĚ &ŝƌƐƚ ŝĚ͘ • ůĞĂŶ ĚƌŝǀŝŶŐ ƌĞĐŽƌĚ ĂŶĚ ǀĂůŝĚ ĚƌŝǀĞƌ͛Ɛ ůŝĐĞŶƐĞ͘

YƵĂůŝĨŝĞĚ ĂƉƉůŝĐĂŶƚƐ ĞŵĂŝů ƌĞƐƵŵĞƐ ƚŽ ĐŚƌŝƐďĂƵĚŝƐƚĞůΛŬŽďŽůĚŝŶĐ͘ĐŽŵ͘ &Žƌ ĨƵƌƚŚĞƌ ŝŶĨŽƌŵĂƚŝŽŶ͕ ĐŽŶƚĂĐƚ ƚŚĞ ĂďŽǀĞ Ăƚ ;ϰϬϯͿ ϰϳϮͲϬϬϵϵ

Class 1 or 3 Drivers / Operators: Fracturing, Nitrogen, Coil, Cement & Acid Supervisors: Fracturing, Nitrogen, Coil, Cement & Acid Applicant Requirements: f Self-motivated f Willing to work flexible hours f Current abstract

f Team oriented f Clean Class 1 or 3 license an asset f Safety Focused

Why Canyon? f Dynamic and rapidly growing company f Premium compensation package

f Paid technical and leadership training f Career advancement opportunities

We thank all applicants; however only those selected for an initial interview will be contacted.

How to apply: email: hr@canyontech.ca fax: (403) 356-1146 website: www.canyontech.ca

safety@jmlc.ca

We’re currently looking for: • Lease Construction Supervisor • Heavy Equipment Operator • 1A Operators (Bed & Winch Truck / Picker Truck) • Crew Foreman (Facility / Pumpjack / Pipeline) • Labourers

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PIPELINE NEWS May 2012

RESOURCE GuĂ&#x2014;de

Canada's leading distributor of industrial, Ă eet and safety products.

Proud to provide selection, quality and excellence to our customers.

516 Nesbitt Drive, Estevan â&#x20AC;˘ 634-2631 (Behind Power Dodge)

a l t u s g e o m a t i c s . c o m

Dwight G. Blomander, CFP, CLU, CH.F.C., CHS â&#x20AC;˘ Life Insurance â&#x20AC;˘ Disability Insurance â&#x20AC;˘ Critical Illness Insurance â&#x20AC;˘ Employee BeneĂ&#x20AC;t Plans

Specializing in well site and pipeline surveys Yorkton 306.783.4100

Swift Current 306.773.7733

Edmonton 800.465.6233

Weyburn 306.842.6060

Lloydminster 780.875.6130

Calgary 866.234.7599

Regina 800.667.3546

Medicine Hat 403.528.4215

Grande Prairie 780.532.6793

Tel: (306) 359-2015 â&#x20AC;˘ Fax: (306) 359-3034 E-mail: dwight@dgbcanada.ca Toll Free: 1-855-359-2015 â&#x20AC;˘ Cellular: (306) 421-1935

Life Licence sponsored by The

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105, 335 Hoffer Drive, Regina, SK. S4N 6E2

SOUTHEAST SASKATCHEWAN COMMERCIAL CHAIN LINK FENCE EXPERTS Box 208

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CALL FOR A FREE ESTIMATE TODAY!

Call (306) 634-8140

Call: Clinton Gibbons

BIG Dâ&#x20AC;&#x2122;S LEASE SERVICE JUSTIN WAPPEL - Division Manager 401 Hwy. #4 S. Biggar, Saskatchewan PO Box 879 S0K 0M0 Ph (306) 948-5262 Fax (306) 948-5263 Cell (306) 441-4402 Toll Free 1-800-746-6646 Email: jwappel@envirotank.com www.envirotank.com

Backhoe Towing Mowing Fencing Snow Removal Road Grader Gravel Supplies & Hauling P.O. Box 544 Stoughton, Sask. S0G 4T0

(306) 457-7033 (306) 457-7673

Cordell Janssen District Manager Downhole

93 Panteluk Street, Kensington Avenue N Estevan, Saskatchewan PHONE: 306-634-8828 â&#x20AC;˘ FAX: 306-634-7747 cordell.janssen@nov.com â&#x20AC;˘ www.nov.com

Pineland Metal Products, Inc. Steel Buildings â&#x20AC;&#x201C; Reduced Factory Inventory 3 0 x 3 6 - R e g $ 1 5 , 8 5 0 N ow $ 1 2 , 6 0 0 3 6 x 5 8 - R e g $ 2 1 , 9 0 0 N ow $ 1 8 , 8 0 0 4 8 x 9 6 - R e g $ 4 8 , 7 0 0 N ow $ 4 1 , 9 0 0 8 1 x 1 3 0 - R e g $ 1 2 1 , 5 0 0 N ow $ 1 0 3 , 9 0 0

Lloyd Lavigne â&#x20AC;˘ Kirk Clarkson Owners/Managers 6506 - 50th Avenue Lloydminster, AB

Phone: (780) 875-6880

5315 - 37th Street Provost, AB T0B 3S0

Phone: (780) 753-6449

Fax: (780) 875-7076

Source # 11H Call Jim at 306-764-8000

24 Hour Service Specializing in Industrial & Oilfield Motors

RICK CORMIER Manager

Box 609 Carlyle, SK S0C 0R0 www.truetorq.ca

Bus: (306) 634-8084 Cell: (306) 577-8833 Fax: (306) 453-6075 ttorq@hotmail.com

PIPELINE NEWS May 2012

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Supplementing m menting g both the Drilling g and Production sectors off the th Oilfield Oilfi ld IIndustry. d t T Tanker k U Units, it Pressure Batch Trucks, and a Fully Equipped Service Truck are available.

We specialize in transporting Salt Water, Crude Oil, Completions, Contaminated Mud & Fresh Water!

Office 1-306-453-4470 Fax 1-306-453-4404

PO Box 1089, Carlyle, Saskatchewan S0C 0R0 Phone: (306) 453-4411 Fax: (306) 453-4404

Manager 1-306-577-9960 Dispatcher 1-306-577-9801

Specializing in Non Damaging Biodegradable Drilling Fluids Designed for Horizontal Drilling Division President 306-577-9900 (Carlyle) Field Supervisor 306-421-0344 (Estevan) Field Supervisor 306-452-8182 (Redvers)

“Serving The Oil and Gas Industry with 24 Hour Drillingg Fluid Service”

Warehouse Manager 306-577-3347(Carlyle)

Designing & Implementing Production Chemicals for Western Canada Cell: 306-575-7521 Of¿ce: 306-453-4414 Fax: 306-453-4415

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PIPELINE NEWS May 2012