Canadian Publication Mail Product Agreement #40069240
JUNE 2010 $6.00
Canadian teams—from large-scale ZCL to tiny Bruin Instruments— supply energy goods and services around the world
Carbonate trailblazer Laricina mounts the first SAGD pilot projects in Alberta’s vast bitumen-rich carbonate reservoirs
ENGINEERS, FABRICATORS & CONSTRUCTORS FOR OIL & GAS PROCESSING
GAS COMPRESSION / GENERATION / PROCESSING EQUIPMENT FOR SALE / RENT / OR LEASE DEHYDRATORS (NEW) Tower Size Design Pressure 12” to 36” Sweet & Sour 1,310 - 1,480 psig HEATERS (NEW) 2 MMBtu/hr Heat Duty, 1500# Preheat Coil AMINE SWEETENING PLANTS (NEW) Plant Size Amine Circulation Rate 15 MMscf/d AMINE 45 USGPM of AMINE SEPARATOR SKIDS (NEW) Separator Size Design Pressure 16” & 24” Sweet 1,440 psig LPG RECOVERY PLANTS (NEW) Plant Size Refrigeration Compressor 6-10 MMscf/d GAS 100 hp Mycom 8-12 MMscf/d GAS 150 hp Mycom 10-15 MMscf/d LEAN GAS 200 hp Mycom 20-30 MMscf/d RICH GAS 450 hp Mycom TURBO-EXPANDER PLANT (USED) 25 MMscf/d EXPANDER C2 OR C3 RECOVERY POWER GENERATION UNITS (NEW) G-300-KW-Dual
Waukesha F18GL
300 KW Generator
G-400-KW-Dual
Waukesha H24GL 400 KW Generator
GAS BOOSTER COMPRESSORS (NEW) C200-S20B 200 Caterpillar G3306 TAW
Sullair PDR20 Gas Booster
C400-S25B 400 Caterpillar G3408 TAW
Sullair PDR25 Gas Booster
C400-S25B 400 Caterpillar G3408 TAW
Sullair PDR25 Gas Booster
C630-A282 630 Caterpillar G3508 TALE Ariel RG282 Gas Booster C1265-A357 1265 Caterpillar G3516 TAW
Ariel RG357 Gas Booster
GAS COMPRESSORS (NEW) Model # hp Engine
Compressor
Model #
C145-JG-2
145
Caterpillar G3306NA
Ariel JG-2 Throw
C810-JGH-3
C195-JGA-2
195
Caterpillar G3306TA
Ariel JGA-2 Throw
W1250-JGK-3 1250 Waukesha 5774 LT
Ariel JGK-4 Throw
W400-JGA-3
400
Waukesha F18CL
Ariel JGA-4 Throw
W1445-HOS-3 1445
Waukesha 5794 LT
Dresser HOS-4 Throw
W400-JGA-3
400
Waukesha F18CL
Ariel JGA-4 Throw
W1445-JGK-3 1445
Waukesha 5794 LT
Ariel JGK-4 Throw
C630-JGJ-3
630
Caterpillar 3508 TALE Ariel JGJ-4 Throw
W1445-JGK-3 1445
Waukesha 5794 LT
Ariel JGK-4 Throw
C630-JGJ-3
630
Caterpillar 3508 TALE Ariel JGJ-4 Throw
W1680-JGK-3 1680
Waukesha 7044
Ariel JGK-4 Throw
C630-JGJ-3
630
Caterpillar 3508 TALE Ariel JGJ-4 Throw
C1775-JGC-3 1775
Caterpillar G3606 TAW Ariel JGC-4 Throw
C810-JGH-3
810
Caterpillar G3512 TALE Ariel JGH-4 Throw
C1775-JGC-3 1775
Caterpillar G3606 TAW Ariel JGC-4 Throw
hp 810
Engine
Compressor
Caterpillar G3512 TALE Ariel JGH-4 Throw
Propak Compression is a distributor of Dresser-Rand & Ariel compressors. Propak Compression is set up to sell units, service and supply parts for reciprocating and rotary screw gas compressors. See our Web Site for detailed specifications for the stock production equipment. Phone Sales: (403) 912-7000 Fax: (403) 912-7011 E-mail: sales@propaksystems.com Web Site: www.propaksystems.com
Gas engines are built to run. But what if they could y?
What if your productivity took off as never before? With Imperial Oil as your lubricant supplier, it can. We can help you make flawless, trouble-free operations the norm, instead of the exception, thanks to Mobil Industrial Lubricants – trusted by equipment builders worldwide. The fully synthetic Mobil Pegasus 1, for example, has proven its value by reaching drain intervals as high as 12,000 hours while maintaining excellent engine cleanliness. That can mean more peace of mind for you and more productivity for your business. Visit www.imperialoil.ca for more information.
Imperial Oil is a trademark of Imperial Oil Limited, Imperial Oil, licensee. Mobil and the Pegasus are trademarks of Exxon Mobil Corporation or one of its subsidiaries, Imperial Oil Licensee.
We are Albertans and we are energy. Recognizing the contribution of oil and gas to Alberta’s economy and communities allows us to address the important relationship between a thriving economy, a healthy environment and a high quality of life. Alberta is Energy showcases the men and women of Alberta, their careers, challenges and accomplishments. Our goal is to build awareness of how C: 40 R: 96 the energy industry touches our lives. C: 29 R: 180
M: 70 G: 57
M: 0
K: 50
K: 7
G: 201
Alberta is Energy is supported by several Alberta business associations, many of which are focused on the oil Y: 100 B:19 Y: 100 B: 43 and gas sector.
ALBERTAISENERGY.CA
A Dynamic Duo Significantly re-engineered with more strength, stability, comfort and standard features. The new KX057-4 and U55. There’s no stopping you now.
Carriers
Wheel Loaders
Kubota Dealers of Alberta www.kubota.ca/
Super Series Excavators • Standard & Zero Tail Models • Up to 8-ton size • Proven performance, reliability and durability • Interim Tier IV engines
Loader Backhoes
Table of Contents
Keeping readers regionally informed
F E A T U R E S
14
GLOBAL VISION A western Canadian energy service company, large or small, can target international markets. In our cover feature, Oil & Gas Inquirer profiles three companies that have taken on the world.
by Mike Byfield
14
Tank drive ZCL takes its composite tank technology worldwide
21
21
Tiny Bruin Instruments relies on innovation to win a global niche for its chemical pumps
27
27
Brain, not brawn Exporting expertise Pajak Engineering sends its oilfield consultants to the farthest corners of the global patch
32
Carbonate trailblazer by Mike Byfield Laricina president Glen Schmidt mounts the first SAGD pilot projects in Alberta’s vast bitumen-rich carbonate reservoirs
8
JUNE 2010 • OIL & GAS INQUIRER
Table of Contents
Measurement Solutions You Can Count On • Portable Gas Test Measurement Utilizing Vortex Meters and Systech Smart Deadweight R E G I O N A L
41
N E W S
63
British Columbia
crude production shows new life
• Apache completes Horn River wells
• PSAC revised forecast calls for
and prepares Kitimat LNG contract • Dawson Creek and Shell negotiate sewage treatment deal
49
69
is dominated by Bakken interest for the Colorado Shales
75
as ERCB approves more
impact Beaufort Sea drilling review
77 79
• Daylight calls its latest Cardium
Rich Ellerslie gas discovery
• Optional Real Time Data Acquisition for Interfacing to PC with Systech Software • Battery Backed-Up Power Supply for System Reliability in the Event of Power Interruptions
East Coast • ExxonMobil and Encana trigger
horizontal results “exceptional” • Triton reports a liquids-rich
• Automatic Data Storage at Selected Time Intervals for Convenient Capture and Retrieval of Readings
"gaz naturel"
construction ahead of schedule
Central Alberta
Central Canada • Quebec gets ready to produce
• Connacher completes Algar
59
Northern Frontier • Deepwater Horizon blowout will
Northeastern Alberta • Stelmach vows end to tailings ponds
• High Level of Accuracy +/- 1%
• Stealth signs a joint-venture deal
Peace River bitumen pilot project
53
Saskatchewan • Saskatchewan’s $190.1M land sale
• North Peace focuses on completing
Cardium well at Wapiti
• Ease of Use for Field Operators
11,250 wells in 2010
Northwestern Alberta • Seaview cases first horizontal
Southern Alberta • Western Canadian light- and medium-
offshore optimism in Nova Scotia
81
International • Controversial geologist pans U.S. shale gas plays as likely losers
I N
12
E VE R Y
I S S U E
Statistics at a Glance
85
• Completions data, spot gas prices, gas storage, drilling activity, and more
83
containing all of the oil and gas field locations ever applied for, along with
On The Job
the most complete road dataset
• Dale Terry supervises construction of fabric-covered buildings, stating that well-engineered structures are safe
Tools of the Trade • PatchMap is a set of digital maps
available
86
Political Cartoon
despite the catastrophic collapse of a competitor’s product
Cover Design: Aaron Parker
#1, 1815 - 27th Avenue NE Calgary, AB T2E 7E1
1.888.SYSTECH Ph 403.291.3535 Fx 403.291.3585 www.systechinst.com
OIL & GAS INQUIRER • JUNE 2010
9
piling
er Open e D w
d No e R nch a
Br
Piledriving Pile Supply Screw Piles Pile Pre-drilling Cranes & Pickers Hydrovac Service CCTV & Flushing Oilfield Hauling
ASTM A252 structural piling made to order. DFI manufactures piling from 4½” to 16”, up to .500 wall thickness, and made to exact length. Save steel. Save money.
www.dfi.ca 1.877.334.7453 Edmonton • Red Deer • Edson • Bonnyville • Brooks • Grande Cache • Peace River • Rycroft • Fort St. John
Editor’s Note Vol. 22 No. 6 President & ceo Bill Whitelaw | bwhitelaw@junewarren-nickles.com
Mike Byfield | mbyfield@junewarren-nickles.com
Grande Prairie bounces back
Publisher Agnes Zalewski | azalewski@junewarren-nickles.com Associate Publisher Chaz Osburn | cosburn@junewarren-nickles.com Editorial director Stephen Marsters | smarsters@junewarren-nickles.com EDITORIAL Editor
Mike Byfield | mbyfield@junewarren-nickles.com Editorial Assistance
Laura Blackwood, Janis Carlson de Boer, Samantha Kapler, Marisa Kurlovich proofing@junewarren-nickles.com Contributors
Jim Bentein, Lynda Harrison, Richard Macedo, Jim Mahony, Pat Roche, Elsie Ross, Paul Wells Creative Print, Prepress & Production Manager
Michael Gaffney | mgaffney@junewarren-nickles.com Publications Manager
Audrey Sprinkle | asprinkle@junewarren-nickles.com Publications Supervisor
Rianne Stewart | rstewart@junewarren-nickles.com ART DIRECTOR
Ken Bessie | kbessie@junewarren-nickles.com CREATIVE SERVICES SUPERVISOR
Tamara Polloway-Webb | tpwebb@junewarren-nickles.com Graphic Designer
Aaron Parker | aparker@junewarren-nickles.com Creative Services | production@junewarren.com
Rachel Dash-Williams, Janelle Johnson, Alanna Staver Sales
DIRECTOR OF SALES
Rob Pentney | rpentney@junewarren-nickles.com SALES MANAGER, MAGAZINES
Maurya Sokolon | msokolon@junewarren-nickles.com SENIOR ACCOUNT MANAGER
Diana Signorile | dsignorile@junewarren-nickles.com ACCOUNT MANAGERS
Jerry Chrunik | jchrunik@junewarren-nickles.com Nicole Kiefuik | nkiefuik@junewarren-nickles.com David Ng | dng@junewarren-nickles.com AD TRAFFIC COORDINATOR—Magazines
Elizabeth McLean | atc@junewarren-nickles.com For advertising inquiries please contact adrequests@junewarren-nickles.com Marketing Marketing / Trade Show Coordinator
Ryan Mischiek | rmischiek@junewarren-nickles.com Marketing designer
Cristian Ureta | cureta@junewarren-nickles.com OFFICES Calgary
2nd Floor, 816 – 55 Avenue N.E. | Calgary, Alberta T2E 6Y4 Tel: 403.209.3500 | Fax: 403.245.8666 Toll-Free: 1.800.387.2446
Edmonton 6111 – 91 Street N.W. | Edmonton, Alberta T6E 6V6 Tel: 780.944.9333 | Fax: 780.944.9500 Toll-Free: 1.800.563.2946 SUBSCRIPTIONS Subscription Rate
In Canada, 1 year $49 plus GST, 2 years $69 plus GST Outside Canada, 1 year $99
Subscription Inquiries
Telephone: 1.866.543.7888 Email: circulation@junewarren-nickles.com Online: junewarren–nickles.com
Tom Shields, an industrial realtor in Grande Prairie, Alta., says the economic downturn of the past two years could have been much worse. “If interest rates hadn’t been so low, we would have gone through a real bloodbath,” Shields comments. “Now business is picking up. I’ve handled more leases in the past six weeks than all of 2009. The big service companies have Help Wanted signs out again.” “This downturn hasn’t been as bad as the NEP,” says Shields, referring to oilpatch miseries triggered by the federal National Energy Program and record-high interest rates in 1980–1982. He thinks northwestern Albertans tend to be optimistic by nature, confident in the long-term future of their region’s natural gas, oil, forestry, and agricultural resources. Among those northern resources is bitumen, billions of barrels locked in both sandstone and carbonate reservoirs. This issue of Oil & Gas Inquirer outlines how bitumen development is now struggling westward from the Fort McMurray area toward Peace River, Alta. While the potential scale is truly global, plenty of the eventual benefits will be local, boosting businesses from Slave Lake to Grande Prairie. Meanwhile, the natural gas–prone Northwest continues to feel the effects of the gas price slump that began in the summer of 2008. At that time, Shields says, an acre of serviced industrial land in a prime location around Grande Prairie would have fetched $300,000. Today, the same parcel would be worth about $135,000 per acre. Vacancy rates in older buildings continue to depress the value of newly constructed facilities. Natural gas prices, which have recently been about US$4.50/Mcf (NYMEX), appear likely to stay soft for months, maybe years. “We need [US$6-$7/Mcf] to really spark activity in northwestern Alberta,” says Rob Petrone, president of the Grande Prairie Petroleum Association and district superintendent with Devon Canada. “The strength of the Canadian dollar [versus the U.S. dollar] also has a really brutal impact on producers [because much of Canada’s gas is exported south of the border].” Grande Prairie’s energy sector has suffered layoffs and corporate amalgamations, Petrone reports, along with a few outright bankruptcies. Even so, he agrees that “there’s definitely optimism in the air here. The service companies are smaller but they’re quite busy. A lot of people and equipment are at work in the Montney and Horn River [tight gas] plays [in northeastern British Columbia].” In Petrone’s view, the royalty policy changes now being worked out in detail by the provincial government will be critical to the energy sector of northwestern Alberta. “Other jurisdictions in North America became more attractive for upstream investment,” the veteran field operations manager says. “It’s important that Alberta becomes competitive again and hopefully we’ll see that happen soon.”
Oil & Gas Inquirer is owned by JuneWarren-Nickle’s Energy Group and is published monthly. GST Registration Number 826256554RT. Printed in Canada by PrintWest. ISSN 1204-4741 | © 2010 1072125 Glacier Media Inc. All rights reserved. Reproduction in whole or in part is strictly prohibited. Publications Mail Agreement Number 40069240. Postage Paid in Edmonton, Alberta, Canada. If undeliverable, return to: Circulation Department, 800 - 12 Concorde Place, Toronto, ON M3C 4J2
N E X T
Made in Canada The opinions expressed by contributors to Oil & Gas Inquirer may not represent the official views of the magazine. While every effort is made to ensure accuracy, the publisher does not assume any responsibility or liability for errors or omissions.
Summer edition:
If you know an admirable person to profile in
This summer, Oil & Gas Inquirer will publish a
On The Job—he or she may be a veteran or
single edition for July and August. (Subscribers
apprentice, field or shop, wise or a little crazy—
will still receive the same number of issues
please give me a call at (780) 784-4251, or
I S S U E
through an extension of one month.) Our
email mbyfield@junewarren-nickles.com.
next issue will feature a look at green hands,
In fact, feel free to sound off about any
electrical contracting, notable natural gas
concern at all—that’s a personal invitation.
processing plants, and more. OIL & GAS INQUIRER • JUNE 2010
11
Stats
FAST NUMBERS
4,000
AT A GLANCE
Tcf
CSUG’s estimate for marketable natural gas in Canada, depending on gas prices. In 2006, CSUG estimated marketable gas at 367 trillion cubic feet.
Alberta Completions
WCSB Oil & Gas Completions
Source: Daily Oil Bulletin
Source: Daily Oil Bulletin
MONTH
OIL
GAS
OTHER
TOTAL
MONTH
OIL
GAS
DRY
SERVICE
TOTAL
May 2009 Jun 2009 Jul 2009
71 36 79
187 143 178
53 42 77
311 221 334
May 2009 Jun 2009 July 2009
71 177 79
187 211 31
46 45 6
35 27 3
339 460 119
Aug 2009 Sept 2009 Oct 2009
101 146 132
212 155 160
80 78 77
393 379 369
Aug 2009 Sept 2009 Oct 2009
250 146 331
267 155 196
36 45 32
37 9 12
590 355 571
Nov 2009 Dec 2009 Jan 2010
169 121 253
212 127 324
116 35 62
497 283 639
Nov 2009 Dec 2009 Jan 2010
382 283 429
244 138 343
68 34 55
10 13 13
704 468 840
Feb 2010 Mar 2010 Apr 2010
144 264 198
308 579 418
114 198 6
566 1,041 622
Feb 2010 Mar 2010 Apr 2010
147 548 291
143 681 458
20 109 2
5 20 9
315 1,358 760
Wells Drilled In British Columbia
Saskatchewan Completions
Source: B.C. Oil and Gas Commission
Source: Daily Oil Bulletin
MONTH
WELLS D R I L L E D
CUMULATIVE *
MONTH
OIL
GAS
OTHER
TOTAL
May 2009 Jun 2009 Jul 2009
26 19 34
376 395 429
May 2009 Jun 2009 Jul 2009
16 107 124
4 10 27
3 10 1
23 127 152
Aug 2009 Sept 2009 Oct 2009
36 38 29
465 503 532
Aug 2009 Sept 2009 Oct 2009
116 194 157
3 7 5
6 3 7
125 204 169
Nov 2009 Dec 2009 Jan 2010
39 45 65
571 616 65
Nov 2009 Dec 2009 Jan 2010
171 139 153
11 11 18
10 9 6
192 159 177
Feb 2010 Mar 2010 Apr 2010
98 95 47
163 258 305
Feb 2010 Mar 2010 Apr 2010
169 223 92
58 32 10
4 8 3
231 263 105
*From year to date
12
700–1,300
Tcf
The Canadian Society for Unconventional Gas (CSUG) now estimates Canada’s natural gas in place at almost 4,000 trillion cubic feet.
JUNE 2010 • OIL & GAS INQUIRER
S P O T P R I C E S at AECO trading hub in Alberta
GAS STOR AGE
Source: Natural Gas Exchange Inc.
Source: U.S. Energy Information Administration 2.25
4.0
3.5
3.0
in the United States
Apr 21
Cdn$/GJ
Apr 28
May 5
May 12
2.16 Tcf Year ago: 2.09 Tcf 5-year avg: 1.86 Tcf
2.00
$3.73/GJ Total vol.: 1,486 TJ Transactions: 157
1.75
May 19
Source: Natural Gas Exchange Inc.
Apr 16
Tcf
Apr 23
Apr 30
Drilling Rig Count by Province/Territory
Drilling Activity: Oil & Gas
Western Canada May 17, 2010 Source: Rig Locator
Alberta April 2010 Source: Daily Oil Bulletin
ACTIVE
DOWN
TOTAL
ACTIVE (Per cent of total)
Western Canada Alberta
73
473
546
13%
British Columbia
43
66
109
39%
Manitoba
0
10
10
0%
68
68
136
50%
184
617
801
23%
0
1
1
0%
Saskatchewan WC Totals Northwest Territories
May 7
OIL WELLS
Alberta
GAS WELLS
Apr 10
Apr 09
Apr 10
Apr 09
Northwestern Alberta
18
29
91
107
Northeastern Alberta
138
4
125
15
Central Alberta
22
56
78
77
Southern Alberta
20
22
124
140
198
111
418
339
TOTAL
Service Rig Count by Province/Territory
Drilling Activity: CBM & Bitumen
Western Canada May 17, 2010 Source: Rig Locator
Alberta April 2010 Source: Daily Oil Bulletin
ACTIVE
DOWN
TOTAL
ACTIVE
Western Canada Alberta
420
670
37%
British Columbia
4
27
31
13%
Manitoba
5
4
9
56%
Saskatchewan
117
75
192
61%
376
526
902
42%
1
1
2
50%
WC Totals Quebec
COALBED METHANE
Alberta 250
May 14
Source: U.S. Energy Information Administration
BITUMEN WELLS
Apr 10
Apr 09
Apr 10
Apr 09
Northwestern Alberta
2
1
0
9
Northeastern Alberta
0
0
127
4
Central Alberta
35
49
7
23
Southern Alberta
21
65
0
0
TOTAL
58
115
134
36
Enviro-Tub… • One complete totally
first class secondary containment protecting the environment, product and primary container Canadian Enviro-Tub Inc. p: 403.742.2967 f: 403.742.5239 e: help@enviro-tub.com www.enviro-tub.com
Enviro-Tub’s sizes for primary containers include 300-500 gal. and also 150 gals. or less.
• • • • •
enclosed portable secondary containment package. Keeps weather out...snow, rain, water, etc. Protection and security for primary container, chemical pumps and site glass. Allows for possibility of total recovery of expensive product. Permits for use of low cost single wall repairable tanks, plastic or steel. Exceeds G-55 guidelines.
OIL & GAS INQUIRER • JUNE 2010
13
Tank drive
ZCL takes its composite tank technology worldwide by Mike Byfield
In 1989, ZCL Composites Inc. began making fibreglass underground tanks for gasoline retail stations in 1989. Today, the Edmonton-headquartered firm has more than 900 employees, 14 plants across Canada and the United States, one in Europe, and it’s quickly expanding globally through licensees and joint ventures. “We are North America’s largest manufacturer and supplier of FRP [fibreglass-reinforced plastic] underground storage tanks,” says Ron Fink, executive VP of ZCL. “Our goal is to be the world’s leading supplier of environmentally friendly liquid storage solutions.” ZCL’s competitive strategy is based on an ever-expanding product range and its exhaustive quality controls for both manufacturing and installation. In western Canada, the company has aggressively targeted emerging markets in the oilsands, shale gas development, and other upstream petroleum activities. “Multinational oil and gas producers who buy our tanks domestically also see us as a reliable
14
JUNE 2010 • OIL & GAS INQUIRER
provider overseas. That good will is an important factor in our international expansion,” Fink says. Beyond the oil patch, the manufacturer targets water and sewage customers who have traditionally relied on concrete products. Also, customized corrosion solutions are sold across a variety of industries—for example, composite liners for the scrubbing stacks of coal-fired generating plants. ZCL even makes FRP tanks for homeowners across Canada and in the northeastern U.S. where oil-fired heating is common. For applications where composites are unsuitable, the company manufactures its own steel tanks. Venence Côté, ZCL’s president, worked for CAE Industries Ltd. in the aerospace sector before founding the present composites company. The aviation connection is not coincidental. “Seventy per cent of a modern aircraft is made up of composites,” says
Feature
Photo: Aaron Parker
ZCL executive VP Ron Fink
OIL & GAS INQUIRER • JUNE 2010
15
Feature
A full range of power and force measurement transducers, protection relays, needle and manifold valves, pressure switches, diaphragm seals and thermometers.
Photo: Aaron Parker
the Quebec-born engineering technologist, referring to wings, fuselages, propellers, heat shields, and more. “The international space station [operated by NASA] is mostly constructed from composite materials.” Conceptually, an engineered composite can be any product that incorporates two or more materials whose properties combine usefully. An ancient example would be bricks, originally made from straw and mud. High-tech composites typically include resins and a reinforcing substrate. Fibreglass, for instance, commonly consists of finely spun glass matting soaked in polymer and styrene resins. FRP composites, although typically more expensive on a per-pound basis than steel, are much lighter as well as corrosion-proof against water and most other liquids. In the ZCL’s earliest days, Côté secured the Canadian rights to an FRP tank manufacturing process developed by Minnesota-based Xerxes Corp. Composite tanks had traditionally been made by “winding” glass fibre and resins around a steel mould. The Xerxes system turned that process outside in, spraying a mixture of chopped glass fibre and resin onto the interior surface of a large mould. ZCL markets its FRP tanks under the trade names Prezerver and Greentank. In 2007, the company acquired Xerxes outright. Côté scored his first big success in the downstream sector. During the 1980s, regulators realized that the steel tanks used to store gasoline and diesel fuel at retail outlets were attacked by corrosion and became leak-prone over time. In response, the Canadian Environmental Protection Act imposed new rules requiring cathodic protection for steel tanks, leak detection, and secondary containment, which initiated an opportunity for composite tanks. To meet that demand, ZCL impressed operators with
ZCL accepts that steel tanks have a place—the company makes this model.
the first double-walled FRP tanks made in Canada, and today are capable of storage in excess of 100,000 litres. Côté achieved that technical coup thanks to Parabeam, a 3-D glass fabric made in the Netherlands. ZCL uses Parabeam as a reinforcing linkage between the two walls of its tanks. The hightech material also allows for liquid transfer along the length of the tank, permitting detection and containment when needed. Due to their double walls and integrated ribbing, these vessels
We stock and supply a wide variety of current, voltage, control power and specialty transformers, indoor and outdoor class from 600V to 34.5KV. We carry shorting blocks, selector switches, lockout relays, test switches, circuit protectors and capacitor trip devices.
A complete line of analogue and digital meters, transducer indicators and gauges.
SPECIALIZING IN POWER AND FORCE INSTRUMENTATION #125, 11769-40 St. SE, Calgary, AB T2Z 4M8 | p: 403.257.3080 | f: 403.257.6657 ricks@cromptonwci.com | www.cromptonwesterncanada.com
16
JUNE 2010 • OIL & GAS INQUIRER
Feature Photo: Aaron Parker
have the strength required for applications across the petroleum industry. In 2002, ZCL bought Parabeam Industries BV, leaving its highly skilled Dutch team in place rather than shifting the operation to Canada. To meet the needs of eastern Canada, ZCL opened a manufacturing plant near Montreal. Côté estimates that his outfit currently supplies upwards of 90 per cent of the new tanks installed by gasoline retailers in Canada and 40 per cent in the United States. South of the border, future growth is expected to be strong, as more than 500,000 tanks will likely need to be replaced over the next 20 years. Green rules boosted ZCL’s fortunes in the upstream sector as well. Western Canadian petroleum producers often flared solution gas and other by-products at the wellhead. During the 1990s, however, Alberta regulators insisted on the installation of liquid waste storage and disposal systems. “At that point, the standard underground tanks used in the oilpatch were steel,” Fink says. ZCL muscled into the upstream market on the strength of FRP tanks that offered superior reliability and lower full-cycle costs. According to Fink, steel fabricators responded to the FRP competition by promoting above-ground field storage tanks. Undeterred, ZCL designed a line of its own above-ground FRP tanks. “Why replace a steel tank every five years if a composite alternative will last indefinitely?” the executive VP queries. Because American regulators have also toughened their oilfield regulations, ZCL’s FRP tanks are selling in states with strong natural gas exploration and development. The company’s operations now total more than 100,000 square feet of plant floor space in Edmonton alone. Its engineers have designed equipment to make thick-walled pressure vessels,
Ron Fink stands beside an above ground fibreglass oilfield service tank.
OIL & GAS INQUIRER • JUNE 2010
17
Feature
heated knockout tanks, custom vessel inlets and outlets, and other specialized products. Beyond vessels, ZCL also designs and manufactures a range of pipes, concrete tank anchors, and even ladders. “We aim to be a one-stop shop. We’re very flexible when it comes to meeting a customer’s specific needs,” Fink says. Among the executive VP’s showpieces is a circle of corroded steel bonded to a thick layer of FRP, a real-life example of ZCL’s proprietary tank relining technology. “This steel came from the floor of a tank that we refurbished,” Fink says. “Water will get into virtually any oil-containing vessel. Even if there’s no external source, condensation will occur. The water sinks below the hydrocarbon. Although corrosion can occur anywhere in a steel tank, it’s usually most vulnerable along the bottom or the floor.”
ZCL has designed its own equipment to manufacture thick-walled pressure vessels. To salvage corroded tanks, ZCL’s engineering team came up with the Phoenix System. After being thoroughly cleaned, an underground single-wall tank (steel or fibreglass) can be transformed into a secondarily contained system without digging it out. In 2006, the technology received certification by underwriting authorities in the United States and Canada. Since then, the company has been deploying Phoenix in North America, Europe, and Asia.
ZCL went public in 1995. Its share price peaked at nearly $16 in mid-2007 and now sits above $4. Annual revenue presents a brighter picture, rising from $55.1 million in 2006 to $128 million in 2008, then subsiding marginally to $110 million last year due to the global economic downturn. Net income remained in the black last year, at $2.2 million, down from $11.4 million the previous year. The company’s balance sheet as of 2009 was notably strong—assets totalled $103 million while long-term debt stood at $5.3 million. In January, ZCL made a major move, acquiring Dualam Plastics Inc. for about $22 million in a half-cash, half-equity deal. The Montreal-based firm custom engineers FRP and duallaminate composite products for use in corrosion-resistant applications. Its major customers are in the power generation, chemical, and pulp and paper sectors. In 2009, Dualam had revenues of nearly $60 million. Besides extending ZCL’s reach into new industries, its executive VP says his company can now offer individually designed solutions within the patch, particularly the oilsands. The Edmonton firm is now focusing its reinforced strength on the international arena. Jizhou Zhong Yi FRP Co., a tank manufacturer in northeastern China, signed a licence agreement for tank manufacturing and relining technology, and some personnel training has occurred in both countries. France’s Socomex SARL licensed the Phoenix System. ZCL will continue to aggressively pursue growth, according to its executive VP. “Canada is big and North America is bigger,” Fink says. “But the world is the biggest of all, and that’s where we’re heading.”
Eliminate Emissions RTS Services is now the exclusive distributor for Trinity Injection Systems Methanol • Chemical • Soap The most Accurate Solar Chemical Injection System available
www.rtsservices.ca
18
JUNE 2010 • OIL & GAS INQUIRER
Toll Free 1-888-511-0554
TUBING CASING
PLUNGER 1
MULTI-STAGE TOOL
Hit tHe road, jack. At around one-tenth the cost of a pumpjack, our PCS Multi-Stage Plunger Lift System™ requires significantly less time and capital for installation. It’s a highly effective artificial lift method that is much less expensive to operate and maintain over the life of a well. In fact, it might just reduce your lifting cost so much, you’ll want to say goodbye to “jack” forever. To learn more, call 403.477.5515.
www.pcslift.com/canada PLUNGER LIFT
/
GAS LIFT
/
PCS Canada Offices
PLUNGER 2
➤ Calgary, AB ➤ Claresholm, AB ➤ Consort, AB ➤ Drayton Valley, AB ➤ Edson, AB ➤ Grande Prairie, AB* ➤ Red Deer, AB ➤ Fort St. John, BC*
BOTTOM HOLE BUMPER SPRING
* Authorized PCS representative
NITROGEN GENERATION
PCS Canada is certified by Partnerships in Health and Safety.
/
AUTOMATION
Feature
Photo: Aaron Parker
Brain, not brawn Tiny Bruin Instruments relies on innovation to win a global niche for its chemical pumps by Mike Byfield Bruin Instruments president Darren Preece
Not many hockey fans can match the drive of Darren Preece, who’s cheered for the Boston Bruins since he was a kid, perched on his dad’s knee in front of the family television. “Our company is named after the team,” says the president of Bruin Instruments Corp. With a staff of about two dozen, Bruin itself is no larger than a hockey team. Despite its small size, though, the chemical injection pump manufacturer is moving aggressively to sell its equipment across the United States and around the world. Its 12,500-square-foot facilit y is located in Sherwood Park, Alta., where Preece grew up. “In western Canada, we’ve competed through making constant improvements to our pumps, and now we’re applying that same capability to
other markets,” the 49-year-old entrepreneur says. “We were the first guys out with a low-pressure pump that’s specifically designed for shale gas. Existing pumps required operating pressures higher than the low-pressure shale fields can provide. This model works at as low as two psi: without sacrificing durability. Bruin has also innovated with respect to low-volume chemical injection. “Many pumps are hard to adjust for really low volumes,” Preece explains. “Chemicals are very expensive and a pump in the field operates 24 hours a day.” His company met that need with a pump that offers extremely low-volume field adjustability, reducing the injection of chemicals where possible to as little as cubic centimetres per day.
Beyond entirely new products, Bruin takes pride in making dozens of small but cumulatively significant improvements. For instance, nitriting main rods improve their durability. A priming valve can be shaped so it won’t inadvertently catch on the coveralls of a passing worker. Or suppose a pump diaphragm breaches— natural gas will then leak into the structure housing the pump. In response, Bruin provides a connection that permits the operator to easily attach an exterior venting tube to the pump. Then there’s the plastic lid. “We found that operators would remove the steel lid over a chemical pump’s mechanism to see what was happening in there. Then the lid would often be left off because screwing and unscrewing it is a nuisance,” the OIL & GAS INQUIRER • JUNE 2010
21
Feature
Photo: Aaron Parker
This Bruin chemical injection pump has the company's see-through lid.
Celebrating 35 Years of Growth and Excellence Custom Steel Forming | Plant Maintenance | Machining | Heat Exchangers Edmonton Exchanger features a wide range of products and services for applications in various industries that include oil and gas, petrochemical and power generation. Our custom steel forming division specializes in the fabrication of large-scale pressure vessel components, and features steel forming capacities that are some of the largest of their kind. We offer the most extensive one-stop head forming and shell rolling capabilities in North America, and one of the largest inventories of pressure vessel quality steel plate in the world. Additionally, we offer a wide range of machining services and specialize in largescale milling and CNC tube sheet drilling for heat exchanger applications. Edmonton Exchanger also provides on-site plant maintenance services for refineries, fertilizer plants and the petrochemical industry. Our services range from controlled bolting and portable field machining to complete turn-key plant and refinery shutdown projects. www.edmontonexchanger.com
22
JUNE 2010 • OIL & GAS INQUIRER
company president says. “Of course, it’s better to leave the lid on. So our pumps feature a clear plastic lid—the operator can see the mechanism and liquid flow without removing the lid.” Looking to the future, Preece says, “The big trend is solar. Any pump that burns wellhead gases will release emissions, so producers are turning to solar power as an environmentally superior alternative.” In response, Bruin has nearly completed a “cool little controller” that combines the control and regulation functions in a single device. Its features include simplicity, ruggedness, lower cost, and finely tuned electricity flow from solar panel to pump batteries. Well-established in the West, Preece thinks his firm is ready to take on dozens of competitors in the international arena. Teamwork is a passion for this hockey enthusiast. On display at the Bruin plant are a Boston hockey jersey and other paraphernalia signed by the best-known Bruin of all time, defenceman Bobby Orr. “As a teenager, I got a try out with the Victoria Cougars, which made me realize that professional hockey wasn’t for me,” he says. “I heard the oilpatch paid the best money around here, so I got a job driving a truck for a local oil and gas industrial supply store.” The young contender had found his game. Working for Bishop, Turbo, and Vonco in oilfield distribution, Preece quickly rose to manager, opening a store in Bonnyville, Alta. Ironically, his most educational experience in service and supply came from working for an actual producer. “BP hired me as an operator at its cyclic steam bitumen project [near Cold Lake, Alta.]. I read gauges, I twisted wrenches, but most of all I learned how
Feature buying power is distributed from the field to head office,” the Bruin CEO says. “Until then, I’d focused on purchasing agents. BP was a huge eye opener.” In 1990, not yet 30 years old, Preece launched Bruin, selling his home to raise capital. The fledgling firm repaired valves, switches, various types of pumps, and more. “There’s a vast amount of instrumentation products, and we went for pretty much all of it,” the entrepreneur says. “Gas prices were very low at that time and everyone was grinding each other down on price. Margins were terrible. I was on the road myself for five or six years, almost to the point of burning out, but we survived.” As times got better, Bruin persistently accumulated cash reserves. “Getting started in a downturn made us careful, which turned out to be a good thing,” Preece says. Due to its strong balance sheet, the company coped well with the energy sector slowdown of the last couple of years. Meanwhile, several competitors in western Canada have shut their doors. “Those companies began when making money was easy and the owners bought the big fancy trucks and so on,” the Bruin founder says. “Everyone learns sooner or later that this industry is cyclical.” Years of repair experience taught Bruin the limitations of existing pumps and sparked ideas for improvements. Preece persuaded an American-based manufacturer to make a raw gas-fuelled, CSA-approved “trash” pump capable of dealing with solids-contaminated liquids. “We got the western Canadian sales rights, which was fine as far as it went,” he says. “But the real money was made by the manufacturer, who still sells that model internationally.” To get into manufacturing, the Alberta company needed more bench strength. Two executives were recruited from a far larger competitor, using the classic lures of partnership and promotion. Since 1998, Darrell Hughes has handled Bruin’s marketing, while Ken Shapka came on board in 2000 as a design-oriented engineer. “Our manufacturing and repair operations now account for about 80 per cent of our revenue. We also sell American pumps that complement our own models,” Preece says. International sales presently generate nearly 15 per cent of revenue, a figure that has grown annually for the past five years. To boost its foreign income further, the OIL & GAS INQUIRER • JUNE 2010
23
Feature
16 years experience meeting customers’ needs COR certified safety program MECP certified installers Highly trained technicians Authorized dealer for industry leading manufacturers Large supply of rentals Cellular repeaters Wireless High-speed Internet
COMMUNICATIONS GROUP Grande Prairie
11213 - 97 Avenue Grande Prairie, AB T8V 5N5 TEL: (780) 532-2555 FAX: 780-532-2593 EMAIL: vector@vectorcomm.ca
www.vectorcomm.ca PROFESSIONAL GEOPHYSICIST
CAUSH XHUFI 403.685.7625 587.888.1038 xhufi@msn.com
SEEKING PERMANENT / CONTRACT EMPLOYMENT SEISMIC INTERPRETER WITH A STRONG GEOLOGICAL BACKGROUND EXTENSIVE DOMESTIC & INTERNATIONAL EXPERIENCE STRUCTURAL & STRATIGRAPHIC INTERPRETATION OF 2D &3D SEISMIC DATA PROSPECT GENERATION AND RISK ASSESSMENT INTEGRATED RESERVOIR CHARACTERIZATION PROFICIENT IN INTERPRETATION SOFTWARE SEISWARE, GEOFRAME, LANDMARK, PETREL, GEOSYN - 1D & 2D MODELING GEOVIEW, STRATA, ACCUMAP, 2D MOVE, GEO-X
24
JUNE 2010 • OIL & GAS INQUIRER
company naturally looks south of the border. Its full line of pumps will soon be carried by an oilfield supply house with 14 stores that serve oil and gas producing regions in the United States “We’re now training their people on sales and repair, which takes time,” Preece says. Hughes, who heads Bruin’s overseas marketing push, says it usually takes two to five years to develop a new foreign market. “You need plenty of time to train a good agent or representative and get your name known,” says the Bruin sales manager. Besides coming up with customers, a good agent will help create effective sales materials, provide reliable aftersales service, and make valuable suggestions on how to adapt a pump design for his market. Independent producers, including Canadian operators, are increasing their activities in many foreign oilpatches, as are oil and gas service providers. (The independents generally follow in the wake of multinationals like Exxon and Shell, who leave a region once its potential for elephant oil and gas discoveries has been exhausted.) “North American companies know our products are reliable and that’s a big help for us overseas,” Hughes says. “But these companies are demanding. In many markets, delivery times have shrunk from many months to a few weeks.” Some of Bruin’s competitors have laid off the engineering and marketing specialists who previously handled export business. “The economic downturn of the last couple of years has led to cut backs, which provides us with opportunities,” Hughes comments. “We’ve made a longterm commitment to our international business.” Foreign cash flow, although difficult to get started, tends to be stable, precisely because lining up a new supplier takes so much time and expense. Equally attractive, foreign oil and gas activity is often less violently cyclical than the North American petroleum sector. When it comes to foreign markets, Preece says he’s not especially concerned about his company’s lack of size. Sheer quantity, in his view, counts for much less than having motivated, well-trained people who know how to identify and exploit opportunities. “Can your team deliver leading-edge products at a competitive price?” queries the Bruin CEO. “If the answer is yes, you can find your niches. Wherever oil and gas are produced, the door is open.”
g n i t s! a r b r e l a e e C y 2010
855 9 1 2 PLATINUM
PLATINUM ENERGY GROUP PRODUCTION EQUIP.
TANKS
PUMPJACKS
Separators Meterskids Gas Sweeteners Lineheaters Treaters Free Water KO’s Pumpjacks Primemovers Pumpskids Flares Bullets Tanks Flowmizers Flare KO’s Dehydrators H2S Analyzers Ignition Systems Compressors Generators
Toll Free 1.888.745.4647
Calgary Sales 403.264.6688
The Oilfield Equipment People!
Calgary Lloydminster Provost Redcliff Drayton Valley Kindersley
TM
All you need to know about HYUNDAI Electric Motors
See us at Booth 5147 Global Petroleum Trade Show
HYUNDAI – the definition of trouble-free. HYUNDAI’s electric motors are designed for the most demanding manufacturing and production applications. Cold, hot or dirty, whatever the application, HYUNDAI has a motor to meet your needs with years of troublefree operation.
in rugged TEFC enclosures, from 1HP to 250HP. Compliant with MG1-Part 31 VFD duty and IEEE-841 requirements. HYUNDAI medium voltage induction and synchronous motors up to 30,000 HP meet international standards that include CSA, NEMA, IEC, API, IEEE, and ATEX.
Available in NEMA or IEC frames, low voltage motors
Crown Triton Premium Efficient Motor
MV TEFC
MV WP2
MV TEAAC
Vertical Motor
Calgary Phone No: 403-236-9428 Email: mark@hyundai-elec.ca
Feature
Photo: Christina Ryan, Inez Photography
Exporting expertise Pajak Engineering sends its oilfield consultants to the farthest corners of the global patch by Mike Byfield Pajak Engineering business development manager George Myette
Three years ago, Chad was invaded by rebel forces with military backing from neighbouring Sudan. Hundreds of civilians have been killed in fighting between these two African nations, and on this occasion the invaders penetrated to N’Djamena, the Chadian capital. Caught by the incursion were field crews belonging to China National Petroleum Company (CNPC) and a Canadian petroleum consultant. “It wasn’t just a question of getting our own people [five] out of there—we also had to help evacuate 115 Chinese oilfield personnel,” says George Myette,
business development manager for Pajak Engineering Ltd. Pajak supplies wellsite supervisors, professional engineers, and certified engineering technologists to clients around the world. Last winter, its personnel roster totalled about 250, with more than 25 per cent working outside of Canada. “We have expertise in all phases of the oil and gas exploitation cycle, from initial permitting to final abandonment. And if a client happens to need an emergency evacuation, we’ll provide assistance for that as well,” Myette says with a smile.
The Chad contract was originally signed with Encana, and Pajak continued working there after the assets were sold to CNPC. When warfare erupted in 2008, the Chinese producer initially wished to leave its crews in place. “The fighting was several hundred kilometres away from our locations,” Myette says. “Even so, the situation was not tenable. The incursion had cut off supplies and our advice was to withdraw our people promptly.” Beyond the invasion itself was the risk of widescale looting, which did in fact break out in the national capital. OIL & GAS INQUIRER • JUNE 2010
27
Photos: Pajak Engineering Ltd.
Feature
Above: Pajak consultants have worked on the KanTan IV rig offshore Trinidad and China. Below: These two guards and the plane helped evacuate Chinese and Canadian staff from war-torn Chad.
Leaving Chad, a landlocked country with minimal modern infrastructure, was easier said than done. The Chinese didn’t have passports—their papers had been held at CNPC’s office in N’Djamena and were unavailable. Fortunately, Joe Horvath—the Pajak Logistics consultant on the spot—persuaded immigration officials in Cameroon to let the Chinese enter without conventional documents. On short notice, Twin Otters ferried the oilfield crews from Chad to Cameroon in a series of flights. To keep refuelling the Canadian-made bush aircraft, the consultant had enough funds at hand to pay cash on the barrelhead. Pajak veterans like to say that all of its assets wear boots, and always have. The firm was founded in 1966 by drilling engineer Lou Pajak, a close friend and business associate of Vern “Dry Hole” Hunter. (After a long string of drilling dusters for Imperial Oil, Hunter was the rig manager on Leduc No. 1, the famed well that launched Alberta’s modern oil industry in 1947.) Pajak initiated Canada’s first well 28
JUNE 2010 • OIL & GAS INQUIRER
control course, called Drilling For Kicks. He also constructed an early drilling rig control simulator for training purposes. From providing wellsite supervision on a contract basis, Pajak branched into engineering services and project management. “The Western Canadian Sedimentary Basin has a challenging slate of hydrocarbons, everything from bitumen to sour gas under high pressure,” Myette comments. “The operating environment here is also very expensive due to weather, physical isolation, and other factors. As a result of our resources and geography, drilling management skills are widely recognized as a Canadian specialty.” Myette’s own background blends oilfield experience, an entrepreneurial streak, and social work. At age 16, the Saskatchewan-born, Wainwright-raised youth began roughnecking on a service rig as a summer job. A job on Kenting’s Rig 12 after high school took him to Britain in 1972, drilling onshore. Changing course, the Calgarian earned a diploma in applied social sciences from Mount Royal
University in 1975, then helped develop halfway houses and industry training for released prisoners. (He now sits on the national board of the Seventh Step Society, whose rehabilitation program is designed to help repeat offenders.) In 1982, Myette moved back into oil and gas, marketing for Schlumbergerowned Johnston Testers and working as far afield as Venezuela. Later he joined Flextube and became a partner in that pioneering coiled-tubing technology firm. “Canadian Fracmaster bought Flextube in 1997 and I stayed with them for two years, developing CT-related business. After Fracmaster went broke, Pajak brought me on board,” the business development manager says. “At that time, the company had about 100 consultants, including a group working for ARCO in Indonesia. We set about deploying more personnel internationally where the business tends to be less cyclical than it is in Canada,” Myette says. By 2008, Pajak’s total consultant payroll had reached 300, and the company had a blue ribbon client roster of overseas operators that includes Talisman, Encana, Suncor, BP, Murphy, Husky, Niko, and others. Some of that work is offshore, taking the firm well beyond its western Canadian roots. Marketing Pajak’s portfolio of energy expertise requires plenty of travel. Last year alone, Myette visited South Africa, Syria (twice), Qatar (twice), China, Libya, and Britain. “Canadians in our industry are known for having a good work ethic,” he says. “Producers recognize that our guys will push hard toward a set of goals. But that drive is balanced with common sense. Our consultants operate responsibly. To our customers, common sense is just as important as the determination to push forward.” High standards have been crucial to Pajak’s success, according to Myette. “We maintain professional ethics,” the 56-yearold manager says. “We avoid questionable operational shortcuts. Our consultants are under instruction not to jeopardize anyone’s health or safety. And if one of our consultants does shut down a job because it’s not in compliance with good practices, this company will back him up. Occasionally, a client will question a decision that costs money and we have probably lost some business as a result. Overall, however, insisting on quality has benefited us among the higher-calibre producers.”
Visit us at: Global Petroleum Show June 8-10/10 Calgary, AB Booth #9013 Atlantic Canada Petroleum Show June 16-17/10 St. John’s, NF Booth #1123
Workplace hazards exist everywhere. Durable hand protection requires an integration of features built around various task and enviromental conditions. The Safety M-Pact ORHD® was designed specifically for work on oil rigs and platforms and is rugged enough to handle the most difficult of tasks. They’re the perfect tool to get the job done right. Mechanix Gloves. The Tool That Fits Like a Glove.® Visit www.mechanix.com/safety.
US: 800.222.4296 CANADA: 604.542.7055
SAFETY M-PACT® ORHD
RUGGED Entire top of hand foam padding with integrated rubber molded exoskeleton extending from fingertips to wrist
DURABLE Anatomically cut dual layer rubberized grip and synthetic leather palm with EVA foam heel pad
REFELCTIVE High visibility reflective material on fingertips and cuff area for safe visibility
mechanix.com
advertisement
FlexCord Can Handle the Pressure! Innovative Developments at Flexpipe Systems Flexpipe Systems is deeply committed to innovation and continuous improvement and is poised to launch a new product line to the oil and gas industry. FlexCord Linepipe, which has been designed for pipeline applications with severe pressure cycling, will be released in the coming months. Offering all of the advantages of spooled pipe, FlexCord was developed in response to feedback from customers who asked Flexpipe Systems to cover a broader range of applications. “It’s market-driven demand. FlexCord is a true reflection of Flexpipe Systems as an innovative leader utilizing market demand for product creation,” says Flexpipe Systems Sales and Operations Vice President, Dean Zipse. “As clients ask, we deliver.” Flexpipe Systems, a division of ShawCor Limited, is the market leader in continuous pipeline technology, providing complete engineering and application resources to its customers. Flexpipe’s
tinu n o C
e
or rehabilitation of corroded steel lines,” Zipse says. “The addition of FlexCord to our product offering will broaden the application parameters into which our composite pipeline technology will fit.” The primary difference between FlexCord and FlexPipe is that FlexCord’s middle layer is constructed from galvanized steel cords instead of glass fibres. This allows FlexCord to withstand severe pressure pulsations without degradation of the reinforcement layer. The use of galvanized steel cords also provides better corrosion resistance than the bare steel used in other composite technology. “Even with best efforts, actual production operating parameters can have severe pressure fluctuations,” explains Jeff Conley, Senior Product Engineer at Flexpipe Systems. “It’s the demands of these pressure spikes that FlexCord is designed to handle.” FlexCord Linepipe will initially
e! p i p ine L d r o be FlexC f t h … e o n l a h o c u n i t a v o n available d in
existing product line, FlexPipe Linepipe, has been used by a long list of energy producers in North America. “Over the last seven years, Flexpipe Systems has provided composite pipeline solutions for many tier 1 E&P companies as well as hundreds of junior oil and gas producers. Our marquis product line has helped our clients lower the cost of their pipeline projects, has reduced the environmental impact caused by pipelining and has helped companies increase their production rates through quick installation of new lines
in three-inch and fourinch internal diameters, with a maximum allowable operating pressure of 10,342 kPa (1,500 psi), and a maximum allowable operating temperature of 60°C. This allows FlexCord to meet the needs of a wide variety of oilpatch applications, including many oilfield water transfer and injection/disposal applications. “FlexCord can be used in challenging operating conditions, wherever that cyclic robustness is required,” Zipse says. In today’s world of volatile commodity pricing, the requirement to get wells online in a timely fashion warrants spoolable technology. Operators with a backlog of wells that have been drilled but not tied in can get their wells tied in faster and more cheaply with this type of product.
advertisement
FlexCord maintains all of the key benefits of FlexPipe, including the same durable, proven joining system. Other benefits include: • FlexCord’s excellent installation economics— Using FlexCord will save clients money. FlexCord can be installed in a fraction of the
time it takes to install a steel pipeline and also requires less equipment and smaller construction crews. • FlexCord is environmentally viable—FlexCord causes less ground disturbance and requires a smaller right-of-way, resulting in better relationships with landowners.
spooled, high pressure, corrosion-less pipeline system with the strength and cyclic durability of steel. Flexpipe Systems’ newest product line can handle applications subject to the most severe of cyclic conditions.
Go to:
It Pays To Be Flexible
• FlexCord is a corrosion-less system— FlexCord’s corrosion resistance and operational effectiveness reduce the cost of ownership of a pipeline. Like FlexPipe, the pipeline system requires no chemical inhibition programs. Flexpipe Systems’ continuous, high-pressure, corrosion-resistant pipeline products, FlexPipe Linepipe and FlexCord Linepipe, are costcompetitive, environmentally sound solutions, aimed at decreasing the overall cost of pipelining projects. It pays to be FLEXIBLE.
Please contact Flexpipe Systems and let us help you determine which product will best suit your pipeline project requirements. Call 403-503-0548.
Carbonate trailblazer Laricina president Glen Schmidt mounts the first SAGD pilot projects in Alberta’s vast bitumen-rich carbonate reservoirs by Mike Byfield
A
lberta’s Grosmont formation is by far the world’s largest heavy oil carbonate reservoir, with estimated original bitumen in place (OBIP) of 320 billion barrels (Bbbl). A generation ago, several producers tackled this huge prospect with several pilot production initiatives that failed financially. Now Laricina Energy Ltd. is advancing the first attempt to tap into the Grosmont with steam assisted gravity drainage (SAGD) technology. If the 1,800-barrel-per-day (bbl/d) Saleski pilot project goes well, the north central region of the province—traditionally serviced out of Slave Lake and Wabasca—can look forward to large-scale economic development within the forseeable future. At Saleski, Laricina hopes to ramp up production in stages of 20,000 to 60,000 bbl/d. Ultimate output would be 270,000 bbl/d over an estimated 25 years of reserve life. While Saleski is a pure carbonate play, Laricina’s nearby Germain project will draw bitumen from an oilsand formation (Grand Rapids) and the deeper 32
JUNE 2010 • OIL & GAS INQUIRER
Winterburn, a carbonate reservoir. At Germain, the company plans a $250-million demonstration phase followed by staging production up over 10 years to 180,000 bbl/d. “The development of two projects within one operating area significantly improves the economics of each,” comments Laricina president Glen Schmidt. To date, the five-year-old company has raised approximately $450 million. As Saleski’s operator, it owns 60 per cent of the project. Its partner, Osum Oil Sands Corp., is another Calgary junior that specializes in bitumen. Saleski has an estimated 4.1 billion OBIP, which would yield 1.6 Bbbl at a recovery rate of 39 per cent. Germain (96 per cent owned by Laricina) is also expected to produce at least 1.6 Bbbl of bitumen. The Laricina CEO holds chemical engineering and MBA degrees from the University of Calgary. His professional pedigree includes Torex Gold Resources Inc. and Pioneer Natural Resources
Canada (both as president) along with vice-presidential posts at Chauvco and Mark Resources. From 2001 to 2005, he headed Deer Creek Energy Limited, which generated the Joslyn oilsands SAGD and mining project. After French multinational Total acquired Deer Creek for $1.35 billion, Schmidt turned his attention to in situ and bitumen-bearing carbonates. “People tend to look backward, which is fine as far as it goes, but the real value gets created when someone applies the lessons of the past creatively to new opportunities,” says the entrepreneurial engineer. “For instance, Texaco once held most of the Deep Basin [a tight gas formation in northwestern Alberta and northeastern British Columbia]. But it took John Masters and Jim Gray of Canadian Hunter to recognize that the Deep Basin had immense potential—Texaco just saw poor reservoir rock and farmed out.” When Alberta’s bitumen industry got underway, Suncor and later Syncrude Canada developed their strip mines
Feature
“ People tend to look backward, which is fine as far as it goes, but the real value gets created when someone applies the lessons of the past creatively to new opportunities.”
OIL & GAS INQUIRER • JUNE 2010
Photo: Christina Ryan, Inez Photography
– Glen Schmidt, President, Laricina Energy Ltd.
33
Feature where the McMurray oilsand formation outcropped to the surface. By a fortunate coincidence, those surface deposits were close to established transportation corridors. “Accessibility and infrastructure pushed the first projects to the northeast,” Schmidt says. Over time, producers experimented with steam injection to exploit deeper oilsand bitumen deposits, but they mostly confined their projects to the McMurray sands. The Grosmont carbonate and its Winterburn counterpart (upwards of 60 billion OBIP), form a north-south corridor to the west of the McMurray oilsand fairway. Sandstones and carbonates have very different origins. Sand is essentially inorganic. In contrast, carbonates (common examples are limestones and dolomite) consist of marine organic material, like plankton and coral. These rocks can be super-productive. Saudi Arabia’s Ghawar, the world’s largest oilfield, and Kirkuk in Iraq, one of the most prolific, are carbonate reservoirs. In Schmidt’s view, they are also good geological analogues to the Grosmont. Producers did recognize the potent ia l of t he geog raph ica l ly isolated Grosmont. Several in situ pilot tests
34
JUNE 2010 • OIL & GAS INQUIRER
were conducted in its central portion of this area in the 1970s and ’80s, applying steam and underground combustion processes. Among these players were Union Oil, Unocal, Chevron, and Canadian Superior, along with the provincially funded Alberta Oil Sands Research & Technology Authority (AOSTRA), which later evolved into the Alberta Energy Research Institute. The carbonate geology that confronted these early explorers proved to be dauntingly complex, The Grosmont’s average depth is just over 1,000 feet, including up to 250 feet of bitumen-soaked pay zone. The formation features several types of porosity/permeability: • T here’s low-permeability, fine-grained matrix, through which tarry bitumen cannot flow without treatment. • L ong fractures create routes through which steam can rise and crude can drain, both rapidly. Speed is of the essence in thermal recovery, because of continuous heat losses to the surrounding rock. • I n addition are vugs and karsts—cavities of various sizes formed by flowing water that later filled up with rock debris and bitumen. A drill bit can plunge several feet through a vug.
Although the hollows can boost bitumen flow, they’re potentially bottomless pits for drilling mud. Unocal and partner AOSTRA had some technical success—one vertical well generated 550 bbl/d. In fact, the performance of this well, the only one to ever receive more than three small steam slugs, was greatly superior to anything realized by that time in the McMurray. Three things intervened: the oil price crash in the mid ’80s, geographic isolation, and AOSTRA’s mandate to unlock the McMurray first. “The industry’s focus was on what it knew. As long as there was McMurray oilsands acreage available, the industry deferred the development of the Grosmont carbonate,” Schmidt says. Today, the promising oilsands prospects are locked up. SAGD has emerged as a viable technology, developed entirely in the McMurray and other Cretaceous sands. To the west, the Grosmont fairway has been opened up with roads and other infrastructure, constructed by natural gas, the Pelican Lake conventional heavy crude play, and forestry producers. The changed circumstances attracted attention from a pair of international operators. In early 2006, Royal Dutch Shell startled the oilpatch by bidding $465 million for Crown
Photo: Laricina Energy Ltd.
Feature
Laricina plans to begin steam injection at its Saleski carbonate pilot project late this year.
leases totalling 88,600 hectares in the Grosmont. Husky Energy, another heavyweight, also picked up extensive acreage. Major producers, when tackling lowgrade resource prospects like shale gas or oilsands, often buy extensive acreage at
relatively low prices per acre. Their teams can then take time to high-grade the best prospects within those holdings. As a junior, however, Laricina couldn’t afford that strategy. Instead, the company has drilled delineation wells and evaluated
legacy records (310 wells altogether) over all its projects. Dozens of laboratory, simulation, and physical reservoir tests were performed. Based on that expanding knowledge base, the company cherrypicked specific lands for acquisition. Schmidt has few concerns about reservoir permeability at the Saleski and Germain prospects. “We will not need to frac our wells as needs to be done in the tight oil and gas plays,” he says. “These are high-quality reservoirs. Our approach was to do everything possible at the modelling and simulation level, then to test ideas in the field—all before moving to the more cost-intensive phase of pilot-scale operations.” Thorough evaluation helped encourage provincial support for the pilot. As a small company, this incremental capital investment is helpful. With that initial work largely complete, field construction is now proceeding. This winter, Laricina drilled the four well pairs at Saleski. (An evaluation well pair had been drilled in 2008.) A peak labour force of 350 constructed an all-weather, 32-kilometre gravel access road to the project, drilled service wells, prepared the 12-hectare plant site, and placed the initial SAGD facility’s components on the site.
We worried about withstanding the worst extremes, so you don’t have to. Westeel liquid storage tanks are engineered to withstand the toughest applications, everything from extreme hot and cold temperatures to operating environments where dents, scrapes and corrosive elements are common. In addition, our tanks are manufactured in ISO 9001:2008 quality controlled facilities using superior steel grades for strength, durability and longevity, and are designed to meet or exceed all current environmental codes, standards, and guidelines.
MF13066-0510
westeel.com 1 800 665 2099
13066 Westeel Liquid Storage 2010 OGI.indd 1
Publication
Westeel: Liquid Storage
5/10/10 2:54:03 PM
OIL & GAS INQUIRER • JUNE 2010
35
Feature
Water source and disposal wells are in place. The pilot plant’s construction is scheduled for completion by this fall, with steam injection beginning in the fourth quarter. At Germain, Laricina recently received a green light from the Energy Resources Conservation Board for a 1,800 bbl/d pilot plant but the company’s evaluation work prompted an expansion to 5,000 bbl/d as a commercial demonstration project. This amendment is pending approval and expected later in 2010. The revised demonstration project will incorporate a hydrocarbon-assisted recovery process known as solvent-cyclic SAGD (SC-SAGD). Construction is scheduled to begin next year, start-up should occur in the second half of 2012, and commercial expansion to 30,000 bbl/d is slated for 2015. The Germain project will have a 66 -hectare footprint, accessed by a 21-k ilometre all-weat her road constructed in 2007–08. Its main components will include a central processing facility, 10 well pairs drilled from one pad, and offsite pipelines and services. Also planned are an operations camp, waste water and sludge disposal system, and a natural gas pipeline.
• • • • • • • • • • •
The SAGD process consists of drilling two horizontal wells in parallel, one above the other. Steam is injected into the upper well, enabling the softened bitumen to drool downward into the collector well. Schmidt emphasizes that the project would be economically viable with straight steam. “Adding solvent to the steam will be the value multiplier. It substantially reduces the quantity of energy needed to recover each barrel of bitumen,” he says. At Germain, the primary SC-SAGD target is the Grand Rapids oilsand. Laricina’s injection will begin with steam and condensate, then shift to propane and steam. The solvents should move ahead of the steam, pre-treating the bitumen and initiating gravity drainage. The advancing steam front should then empty the expanding underground “chamber” of bitumen while much of the solvent recirculates through convection for eventual recovery. The company hopes that using solvent will reduce the all-important steam to oil ratio from three to one to as little as 1.8 to 1. S c h m idt c ompa r e s Sa le sk i a nd G e r m a i n to t he Fo ste r C r ee k a nd
Chr istina La ke SAGD bit umen pro jects developed by Encana Corp. “Those are the crown jewels of Cenovus [the oi l-foc used compa ny spu n of f la st September by Encana]. In terms of scale and profitability, our projects are very comparable,” he comments. Cenovus is also experimenting with solvent-SAGD at its thermal production sites. Further down the road, Laricina plans to exploit three smaller core properties (two oilsands, one carbonate). “As the infrastructure matures in our region, those properties will advance,” the company president explains. West of the Grosmont platform sit the Peace River bitumen deposits. Again, the thick crude sits in both sand and carbonate reservoirs. Shell Canada has long operated a limited SAGD oilsands project in this area, and North Peace Energy Corp. is now launching an oilsand pilot there. (See article on page 49.) In general, though, Schmidt sees Peace River bitumen as less economically attractive at this stage. “Their turn will come,” he predicts. “As our exploitation technology continues to improve, resources that are now marginal will be profitably produced.”
Hot Oiling Acid Pumping Pressure Truck Services up to 15,000 PSI Acid Heating and Pumping Invert Heating Temperature Sensitive Fluid Heating 35 Million BTU Trailer Mounted Heater Units 14 Million BTU Dual Tank Heaters 7 Million BTU & 5.2 Million BTU Burners Tank Truck Service Steam Truck Service
HEAD OFFICE Ph: 780-532-3119 BC OPERATIONS WHITECOURT FIELD OFFICE HINTON OPERATIONS 9602-99 Street Fax: 780-513-6196 Dawson Creek, BC Unit B, 5012 West Street CENTER Clairmont, AB Email: asap@xplornet.com 1-877-390-2727 Whitecourt, AB (Summer 2010) 1-877-390-2727
For 24 Hour Service Call . . . 1-877-390-ASAP (2727) www.asapwellservices.com
36
JUNE 2010 • OIL & GAS INQUIRER
SERVICES LP (780) 538-9101
GENERAL OILFIELD MAINTENANCE, CONSTRUCTION & PIPELINE Journeyman Pipefitters Maintenance & Labour Crews B Pressure & Structural Welders c/w Rigs 1 Ton, 11 Ton, & 22 Ton Picker Trucks Rubber Tire Backhoe Services Pipe Insulating Self-Frame Buildings Vessel Repair & Construction
1-888-8WAYDEX wdx@telusplanet.net
advertisement
It’s no surprise that interest in the Trans4mer Garage/Wash Bay is growing rapidly. Customer responses have ranged from, ‘‘Where have you been?” to “We should have gotten this 10 years ago.” One customer even described it as “the most innovative product in the heavy equipment industry for the past 5 to 10 years.”
The unique demands of oil and gas production require a one-of-a-kind solution that saves both time and money. That solution is now available. Canadian-based One 4 Haul Trans4mer Ltd. has developed the Trans4mer Garage/Wash Bay—a combined garage and wash bay. This innovation is a versatile portable building with many applications, ranging from a temperaturecontrolled working area to an environmentally friendly wash bay. There is no hydraulic system—it’s all electrical and air. The indoor facility is also the world’s first portable building with a four-ton overhead crane. “It’s mobile, it’s fast-opening, and it’s easy to close,” says Jay Haché, head of Sales and Marketing at One 4 Haul Trans4mer Ltd. And with ever increasing interest from industry, the production schedule is filling up fast. The Trans4mer Garage/Wash Bay is transported by truck and spans 30 feet wide, 40 feet long, and 20 feet high when opened. Set-up and removal is easy: one truck, one person, one hour. Customers will benefit from the unique design of the floor as a tank, as well as the unit’s rigidity and robustness. The Trans4mer Garage/Wash Bay comes with a floor that can support 90,000 pounds, a four-ton overhead crane, and an insulated, heated facility with a generator that makes the building self-sufficient.
Born from close study of the needs of potential oil and gas industry clients, the Trans4mer Garage/Wash Bay seeks to help businesses operate more efficiently and thrive in harsh environments, while at the same time protect the environment and prevent cross-contamination challenges. Clients can also ensure productivity in the worst conditions. During winter, mechanics working without the benefit of the Trans4mer Garage/Wash Bay can spend as much as 30 minutes out of an hour simply warming up. The Trans4mer Garage/Wash Bay has also responded to another dilemma faced by clients: stricter government enforcement of mandatory spotless wash regulations. Haché recalls a client that had to haul heavy equipment 250 kilometres from one site to head office to be cleaned, before transporting the equipment to a different work location, only 50 kilometres away from the original site. “By combining the garage and wash bay as a unit, companies will now be able not only to do mechanical work and/or welding, but they will also have the option of cleaning their equipment right on site,” Haché says.
advertisement
There iS Truly no PorTable buildinG aVailable like The TranS4mer GaraGe/ WaSh bay. Take adVanTaGe of:
CuSTomerS Will See many benefiTS from uSinG The TranS4mer GaraGe/ WaSh bay, inCludinG:
• Rapid and easy mounting/dismounting—one truck, one person, one hour;
• Greatly reduced equipment downtime, by having mechanics and equipment readily available;
• A wash bay to keep equipment clean and prevent costly cross-contamination problems;
• A major reduction in transportation for outof-order equipment;
• Insulated walls, for a more comfortable working area;
• The floor built as a tank will drastically lower the risk of oil and gas spills;
• An environmentally friendly design with a tank built as a floor, to capture any liquid spills that would otherwise damage the environment;
• Increased staff morale and productivity, with a working environment that can be adjusted to provide relief from outdoor conditions.
• Two 14-foot by 16-foot overhead doors (one at each end);
“
This garage will bring
• Optional items, available at extra cost, including attached tool boxes, attached work tables, welding equipment, and much more;
great cost savings, and will
• A standard air compressor system (at no extra cost);
turn work sites into a more
• An optional security camera system; • A diesel generator (50 kW, 3 phase) included to power the facility; • A structure whose high-quality design makes it versatile, durable, and portable
profitable, more effective
”
way of doing business.
For more information, please contact: One 4 Haul Trans4mer Ltd. 31 Industrial Blvd. Caraquet, NB E1W 1A9
Phone: 1-877-726-9035
jaymgi@one4haul.com
Visit us at booth 5415 during the Global Petroleum Show on June 8–10.
To receive a personalized invitation to visit the Trans4mer Garage/Wash Bay in the Calgary and Fort McMurray areas, contact Jay at jaymgi@one4haul.com or go to www.one4haul.com/ogminvitation.
British Columbia
Photo: Apache Canada
Apache completes Horn River wells and prepares Kitimat LNG contract
Apache drilled seven horizontal wells in the Two Island Lake development area in the first quarter.
Apache Corp. expects to award front-end engineering and design proposals for the Kitimat LNG Inc. export facility within the next two months, a company official said on April 29. John Crum, co-COO and president of North America, said his company is currently evaluating proposals from four parties. Apache, the operator of the liquefied natural gas (LNG) facility, plans to export natural gas from its Horn River shale gas play in northeastern British Columbia. “LNG is a big step forward for Apache,” added Steven Farris, chairman and CEO. “It allows us to monetize very large gas resources at LNG prices, which are generally linked to crude.” Horn River activity continues to dominate Apache’s Canadian operations with seven horizontal wells drilled in the Two Island Lake development area during the quarter. Those wells include four on the
Apache-operated 52-L pad and three on Encana Corp.-operated 63-K pad. In addition, Apache drilled three horizontal wells in its Dilly area to hold expiring acreage. Drilling efficiencies and resulting cost performances continue to improve with the average drill time now 19 days from spud to rig release, with an average drill cost of US$3.7 million per well for a 7,200-foot horizontal section, analysts heard during a telephone conference call focused on the company’s fourth-quarter results in 2009. Although Apache hasn’t yet brought the wells on, it still believes it will be able to recover more than 10 billion cubic feet (Bcf) per well, said Crum. Completion operations on the 16-well, 70-K pad, which was drilled in 2009, began in January. In late April, Apache finished the mammoth fracture stimulation project associated with these wells.
In that time, the company has completed 274 frac stimulations on those 16 wells, which works out to just over 17 fracs per well, with up to 22 stages on individual wells. It also pumped more than five million barrels of water and more than 100 million pounds of sand. The project also involved conducting a huge micro-seismic acquisition program with 82 individual frac stages and more than 19,000 individual microseismic events mapped. The data will be used to optimize frac design and spacing, and well spacing on future pads. The first of the 70-K pad wells came on stream March 29 to start recovering frac water, and current production from the pad is now about 25 million cubic feet per day, said Crum. Ramp-up, though, has been severely limited by space restrictions while the frac spread remained on location. The frac equipment is currently being demobilized and all 16 wells should be on production by early July, he said. In its conventional business units, Apache drilled a total of 42 development wells resulting in 38 producers in the first quarter. Natural gas activity included successful completions at Zama, Kaybob, and Nevis. Oil drilling activity was focused on House Mountain in northwestern Alberta where six new horizontal wells are producing more than 1,100 barrels per day. An 18-well program in the Provost area also has delivered good results, including one well which tested at more than 500 barrels of oil per day in Apache’s proposed enhanced oil recovery project area. In the first quarter, Apache posted its strongest earnings and cash flow since 2008, despite the weak market for North American gas, said Farris. The company reported net income of $705 million for the three months ended March 31, 2010, compared to a loss of $1.76 million in the first quarter of last year. — DAILY OIL BULLETIN
BRITISH COLUMBIA WELL ACTIVITY
APR/09
APR/10
WELL LICENCES
30
44
▲
APR/09
APR/10
WELLS SPUDDED
17
37
▲
APR/09
APR/10
WELLS DRILLED
27
44
▲
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • JUNE 2010
41
British Columbia
Dawson Creek and Shell negotiate sewage treatment deal Residents of Dawson Creek, B.C., could soon be cooperating with the oil and gas industry every time that a toilet is flushed. The city in northeastern British Columbia currently sells 20 per cent of its potable water for use in natural gas production. That practice would end if Shell Canada and the community agree to upgrade sewage effluent to industrial usage standards. “This effluent reuse plan will be the first of its kind in North America,” said Dawson Creek Mayor Mike Bernier. The city recently took requests for proposals for the project. Shell offered $9.7 million that would be used to pay for waste water treatment upgrades in exchange for 3,400 cubic metres (cu. m) of treated effluent per day. “Shell has offered in their [request for proposal] to pay for that whole pump station to help get the oil and gas industry off of our clean, potable water,” Bernier said. ‘It’s a feather in their cap for sure, showing they want to be part of the region and making a difference in the environment in a positive way as well.”
Visit us at the
The city’s effluent currently undergoes treatment before being dumped into the Dawson Creek. A city recently came up with a plan to reuse this water to supply the oil and gas industry, but council decided it couldn’t make the $10-million investment needed to complete the project. “Even though we know it’s a great idea, it wasn’t unfeasible,” Bernier said. “For them [Shell] to come forward and say they’ll help pay for it in order to make it happen, it’s a win-win for us.” Shell also proposed to construct a pipeline from the treatment facility to its Groundbirch field. The company estimates that will eliminate 85 trucks from the roads every day. The company’s proposal also said the city could market and sell any of the daily 3,400 cu. m of treated effluent water it doesn’t use. It’s estimated that 600 cu. m per day could generate revenue in excess of $500,000 per year. The city has budgeted $250,000 in the 2010 financial plan for design, development, and engineering of the project. It also committed to provide land for the
Global Petroleum Show June 8th -10th, 2010 Calgary, Stampede Park Booth #: 3750 (Outdoor)
42
JUNE 2010 • OIL & GAS INQUIRER
The city named for pioneering surveyor George Dawson has made a forward-looking water sale.
project and $150,000 a year for the facility’s operating costs. Details on the project are still in development and a finalized contract was expected within two weeks, Bernier said in early April. — CANADIAN PRESS
British Columbia
Monterey increases reserves at Groundbirch and acquires more land Monterey Exploration Ltd. has announced a significant increase in reserves from year-end 2009, a $19.2-million Crown land acquisition at Groundbirch in northeastern British Columbia, and an agreement with AltaGas Income Trust to fund the construction of its Groundbirch natural gas plant. At the April 21 Crown land sale, Monterey was successful in acquiring a six-section (100 per cent net to Monterey) contiguous land block located three miles south of its existing Groundbirch lands for $19.2 million. With this recent land acquisition, the corporation’s Groundbirch landholdings now stand at 21 (19 net) sections, with a current drilling inventory of 105 (95 net) locations in the upper Montney alone. GLJ Petroleum Consultants Ltd. prepared an independent resource assessment dated effective April 21, 2010, of all 21 (19 net) sections of Montney landholdings in the Groundbirch area. The best estimate of Discovered Petroleum initially in place net to Monterey in the upper Montney formation increased to 2.46 trillion cubic feet (Tcf), up 45 per cent from
the 1.7 Tcf best estimate provided in GLJ’s previous resource assessment dated effective Feb. 28, 2010. Re s e r ve s at Gr ou ndbi r c h h ave increased to 101.4 billion cubic feet of gas equivalent (Bcfe) on a proved-plus-probable basis, up 141 per cent from 42.1 Bcfe at Dec. 31, 2009. The current total includes 100.14 Bcf of gas and 211,000 barrels (bbl) of natural gas liquids. Proved reserves at Groundbirch have increased to 45.9 Bcfe, up 156 per cent from 17.9 Bcfe at the end of 2009. Total corporate reserves are now estimated at 142.5 Bcfe on a provedplus-probable basis, up 63 per cent from year-end 2009. Proved reserves are now estimated at 67.1 Bcfe, up 59 per cent from year-end 2009. Monterey has entered into an agreement with AltaGas whereby the trust will fund the construction cost of Monterey’s 28 million cubic feet per day (MMcf/d) Groundbirch natural gas plant at 6-1980-20W6 estimated at $28 million. The 6-19 Groundbirch gas plant has all required regulatory approvals in place,
site clearing and surface preparation has been completed, and field construction is expected to start in August. While Monterey’s Montney gas is sweet, the 6-19 Groundbirch gas plant is being constructed to process sour gas, which is commonly found in this area in other prospective formations such as the Doig. Monterey said next year’s average daily corporate production with the 6-19 Groundbirch gas plant on stream prior to the end of the fourth quarter of 2010 is estimated to range between 4,500 to 5,500 barrels of oil equivalent per day (boe/d), with associated operating costs of approximately $6 to $6.50/boe and a capital expenditure program of between $25 million to $35 million. To date, Monterey said it has successfully drilled and completed three horizontal wells at Groundbirch: • T he 4-30-80-20W6 well (100 per cent net to Monterey) tested at approximately 9 MMcf/d, with a flowing wellhead pressure of 1,000 psi after 48 hours of continuous production testing in November 2009.
• NEW COMPRESSION EQUIPMENT • • NEW & REBUILT ENGINES • FROM 20 HP - 4,500 HP • • SALES, PARTS, SERVICE, RENTALS • CUSTOM DESIGN AND PACKAGING OF
6900 - 112th Avenue SE Calgary, AB T2C 4Z1
(403) 235-5877
(780) 488-9309
#100, 11312 - 98 Avenue Grande Prairie, AB T8V 8H4
#12 - 901 South Railway Avenue Drumheller, AB T0J 0Y6
Fax: (780) 513-0804
Fax: (403) 823-3610
Fax: (403) 272-7749
(780) 513-0313 Certified Warranty Depot and Authorized O.E.M. of:
SULLAIR
PROCESS AND GAS COMPRESSORS
5403 Roper Road Edmonton, AB T6B 3L6
Fax: (780) 488-9383
(403) 823-8411
For our locations in Medicine Hat, Red Deer and Saskatchewan, please call our toll free number.
1-877-724-3355
Toll Free: E-mail: bidell@bidell.com • Web Site: www.bidell.com OIL & GAS INQUIRER • JUNE 2010
43
British Columbia • The 2-21-80-21W6 well (100 per cent net to Monterey) tested at approximately 7 MMcf/d, with a flowing wellhead pressure of 520 psi and 60 bbl per hour of frac fluid after 34 hours of continuous production testing in March 2010. • T he 13-27-80-21W6 well (75 per cent net to Monterey) tested at approximately 6 MMcf/d, with a flowing wellhead pressure of 450 psi and 50 bbl per hour of frac fluid after 48 hours of continuous production testing in March 2010. In addition to the three horizontal wells drilled at Groundbirch, Monterey has drilled two vertical stratigraphic test wells. The 3-25-80-20W6 well (100 per cent net to Monterey) was drilled in February 2009 and the 16-31-80-21W6 well (75 per cent net to Monterey) was drilled in February 2010. These stratigraphic wells were not completed in the Montney formation and there are no reserves assigned to these wells; however, the data from these wells was used by GLJ in its resource assessment.
Monterey has a current inventory of 105 drilling locations in the upper Montney alone Reserves booked to Groundbirch are based on the drilling and completion of a total of 20 (17.5 net) wells, consisting of 16 (14.75 net) horizontal Montney wells, inclusive of the 3 (2.75 net) horizontal wells previously drilled and completed by Monterey, and 4 (3 net) vertical Doig wells. At April 1, 2010 the future development capital for such reser ves is $74 million, which now excludes the construction cost of the 6-19 Groundbirch gas plant. Monterey’s board of directors has approved a 2010 capital expenditure program totalling $35 million, net of the $10-million non-core asset disposition of which 100 per cent of the approved expenditure program will be allocated towards exploration and development activities at Groundbirch. The corporation’s base production is expected to decline modestly and average 1,600 boe/d for 2010. — DAILY OIL BULLETIN 44
JUNE 2010 • OIL & GAS INQUIRER
British Columbia
Progress rapidly builds up its Montney production Progress Energy Resources Corp. has increased its Montney production from approximately eight million cubic feet per day (MMcf/d) of natural gas at the beginning of the year, to approximately 30 MMcf/d, with over 20 MMcf/d targeted to flow through its recently commissioned facility at Town South in British Columbia. Production at the Town South development project was successfully brought on stream in late March. The company drilled and brought on stream four additional horizontal wells in the first quarter in the Town South area with five-day sustained test rates ranging between 4 MMcf/d and 7 MMcf/d each. Progress constructed and commissioned a 25 MMcf/d compression and dehydration facility and a central distribution system for frac fluids at a cost of $8.5 million. Based on the success of the first phase of development, Progress expects to commence the expansion of its recently commissioned Town South facility in the third quarter. The expansion includes the installation of two additional compressors to double the capacity of the plant to 50 MMcf/d at an estimated cost of $5 million. Progress estimates the internal risked rate of return on its Montney project to be approximately 40 per cent at a natural gas price of $5 per gigajoule and assuming 4 MMcf/d 30-day initial production rate and four billion cubic feet recoverable at a perwell cost of $6.5 million. The horizontal wells were drilled a nd complete d for appr ox i m ate ly $6.5 million per well in the Town South area. Multiple opportunities have been identified to reduce costs to $6 million per well, Progress said. The company has made headway in reducing drilling times for the horizontal wells to less than 30 days with one well being drilled in a record 26 days for a Montney well in this area. The horizontal wells were completed consistently using slick water fracture stimulations with six to nine fracs per horizontal leg. Eight to ten additional horizontals are expected to be drilled in the greater Town South area prior to year-end, Progress said.
Call Us for all Your ASME Design, Fabrication, Package Assembly & Service Needs
CALGARY - 403.258.3680 CROSSFIELD - 403.946.5678 SASKATOON - 306.242.8900 EMAIL - sales@maxfield.ca
w w w. m a x f i e l d . c a
— DAILY OIL BULLETIN OIL & GAS INQUIRER • JUNE 2010
45
British Columbia
Production boost and higher prices increase ARC’s earnings Increased production and higher crude oil prices sent ARC Energy Trust’s firstquarter earnings soaring to $139.4 million from $22.5 million a year earlier, while cash flow and revenues were also vastly improved year over year. Production volumes for the quarter averaged 67,209 barrels of oil equivalent per day (boe/d), an increase of four per cent compared to the first quarter of 2009. The trust said the majority of the increase in production was a result of an acquisition that closed late in 2009, with the remainder attributed to increased output from the greater Dawson area. ARC continues to expect full-year average production between 70,500 and 72,500 boe/d, with the planned start-up of a trust-operated gas plant at Dawson in the second quarter. Cash flow from operating activities increased by 28 per cent in the first quarter of 2010 to $158.7 million from $124.3 million in the first quarter of 2009. Increases in Crown royalties and a decrease in cash gain on risk-management contracts were more than offset by the 35 per cent ($13.45/boe) increase in commodity prices and a four per cent increase in production relative to the first quarter of 2009. Capital expendit ures, excluding acquisitions and dispositions, totalled $128.3 million in the first quarter of 2010, compared to $97.2 million in the same period of 2009. This amount was incurred on drilling and completions, geological, geophysical, and facilities expenditures. Of the total amount spent in the first quarter, $59.7 million was spent on ARC’s resource plays, including $41.4 million for the Montney resource play in northeastern British Columbia and $14.9 million for the Cardium resource play in Alberta.
A total of $53.6 million was spent on ARC’s conventional oil and gas properties, $4.1 million on enhanced oil recovery (EOR) initiatives, and the balance of $10.9 million was spent on leasehold improvements for the trust’s new office space in downtown Calgary. Total capital expenditures are forecast to be $610 million in 2010. The trust’s activities in the Dawsonarea Montney play included drilling 14 horizontal wells and 3 vertical wells. Four horizontal wells were completed during the quarter. ARC also incurred $3.9 million of capital expenditures on the construction of its Dawson Phase 1 gas plant during the first quarter.
ARC spent $61.5 million to build its Dawson gas plant, which is now in operation.
From inception to March 31, 2010, the trust has spent $61.5 million on the gas plant. Subsequent to quarter-end, construction and commissioning of the gas plant was completed with start-up procedures now underway. Sales gas was anticipated to be flowing through the plant by the middle of May. ARC said it currently has enough wells awaiting tie in to the gas plant to fill it to its 60 million cubic feet per day (MMcf/d) per day capacity within two weeks of plant start-up. During April 2010, ARC submitted an application for the Phase 2 portion of the Dawson gas plant to the British Columbia Oil and Gas Commission. Phase 2 consists
of the construction of a second 60 MMcf/d train at the Dawson gas plant and, if approved, is anticipated to increase the plant processing capacity from 60 MMcf/d to 120 MMcf/d. Phase 2 is expected to be completed in the first quarter of 2011. ARC spent $14.9 million during the first quarter at the Pembina Cardium field, principally on the drilling of five horizontal wells and two vertical wells. Two of the horizontal wells and both of the vertical wells were in the early stages of completion at quarter end, with early indications suggesting that these will be average horizontal wells for the area. The trust also drilled one horizontal Cardium well and completed two horizontal wells drilled in the fourth quarter of 2009 in the Garrington area. Thirty-day initial production rates for the completed wells averaged just over 100 boe/d. ARC expects to spend at least another $40 million during the remainder of the year to further outline potential for the recovery of significant incremental oil volumes through the application of horizontal drilling and completion technology. The trust also spent $4.1 million on EOR initiatives. Work on the Redwater CO2 pilot project continues and both the CO2 injection and oil production facilities are operating. Results to date are encouraging, but ARC anticipates that it will take until later in 2010 to determine to what extent the pilot has been successful in mobilizing incremental volumes of oil. While the pilot project may indicate enhanced recovery, the outlook for crude oil prices and the cost and availability of CO2 will be determining factors in ARC’s ability to achieve commercial viability for a full-scale EOR scheme at Redwater. — DAILY OIL BULLETIN
order
yOUr atlas TODAy!
• Hydraulic Torque Wrenches • Hydraulic Tensioning • Sparkless Pipe (Casing) Cutting • Flange Facing
• Field Machining • Mobile Valve Repair • Maintenance Programs • Weld Testing
website: WWW.LOCKHARTOILFIELD.COM Bay 5, 7607 Edgar Industrial Drive, Red Deer, AB T4P 3R2 NEW LOCATION IN FORT ST. JOHN
46
JUNE 2010 • OIL & GAS INQUIRER
(403) 347-7017 - Shop 1-888-259-4464 - Toll Free (403) 588-6978 - Cellular (403) 347-7398 - Fax
250
$ EIGHTH EDITION
2 0 10 - 2 0 11
SHIPPING AND GST NOT INCLUDED
To order, call 1.800.563.2946 or atlas@junewarren-nickles.com
Dewatering Power
Rental Services Pumps, Generators, Piping & Accessories
A complete line of submersible pumps, engine driven pumps, generators, piping and complementary accessories are available for short or long term rental Edmonton Calgary Saskatoon
780.489.1961 403.279.8371 306.933.4849
www.ittwww.ca
C AR IN MIT PLASTICS
.
M
MPI
100 Gallon and 150 Gallon Double Wall Chemical Tanks
• patent & trademark searches • (filings in Canada, the U.S. & elsewhere) • intellectual property litigation • • securities law • (including cross-border financing) • licensing & trade secret agreements • • joint venture mergers & acquisitions • • employment law & breach of confidence •
EDMONTON
CALGARY
2200, 10155 102 St
2000, 530 8 Ave SW
Ph: (780) 497-4800
Ph: (403) 232-8300
Fax: (780) 424-3254
Fax: (403) 232-8408
• Double Wall 100 Gallon 61 L x 33.5 W x 21.5 H • Double Wall 150 Gallon 61 L x 33.5 W x 31 H
www.brownleelaw.com
• 7” Vented Threaded Cap • Stainless Steel 1” Bulkhead Fitting • Grounding Wire and Containment Cleanout • Optional 4 ft Stand
888-868-2658
C
A
N
A
Locations Throughout Western Canada
Access Mats Rig Mats Crane Mats ATV Mats & Bridges Portable Bridges
www.NortherNMat.ca 48
JUNE 2010 • OIL & GAS INQUIRER
D
A
ISO 9001:2000 RE G I S T E R E D F I R M
Northwestern Alberta/Foothills
North Peace focuses on completing Peace River bitumen pilot project
At the cyclic steam-stimulation bitumen pilot, the second cycle of the L1 well is being produced.
Nor t h Peace Energ y Cor p. invested $13.9 million during 2009, focused on the completion of pilot construction and pilot operations on Peace River bitumen acreage and drilling programs. The company reported a net loss for the year of $2.76 million on minimal revenues. Production for 2009 averaged 44 barrels per day (bbl/d). “During 2009, we made ver y significant strides in the development of our project. We completed construction of the pilot facilities, initiated operations, and achieved the ver y significant milestone of first oil in May. Most importantly, we have advanced our understanding of the resource and modified our steaming strategy to the point where we have already achieved a commercial SOR [steam-to-oil ratio] on our L1 well,” said Louis Dufresne, president of North Peace, in a news release.
At the cyclic steam-stimulation bitumen pilot, the second cycle of the L1 well has now been on production for 21 weeks. The cycle’s SOR, which continues to decrease as production is maintained, is now approximately 4.4, which represents a 45% improvement over the initial cycle. For comparison purposes, the company said its SOR, when adjusted for heat content of injected steam, equates to a steam assisted gravit y drainage (SAGD) SOR of 3.7, which is equivalent to the current industry average of 3.7 for existing SAGD projects in commercial operations. T he produc t ion rate to date for the cycle is 29 bbl/d over a period of 26 weeks, which includes both steam injection time and production time. The revised steam injection strategy on the L1 well is accessing the resource
more ef f icient ly and is resulting in significantly improved SORs, the company said. The next cycle will use the sa me st rateg y w it h a la rger stea m slug. The purpose of this next cycle is to demonstrate repeatability, but also has the potential for further improved SORs and increased daily oil rates. The L2 well was on production for six months and is now shut-in for a pump change. Prior to the pump change the well will be converted to steam circulation to gather additional injection and production data which will help to determine the steaming strategy for the well’s second cycle. Du r i ng 20 09, Nor t h Peace completed pilot construction in the first quarter, initiated first steam on the L1 well in January and achieved first oil production from the pilot in May. It produced 16,000 barrels (bbls) from the L1 and L2 wells during the year. T he company a lso completed its winter drilling program at Red Earth, which consisted of an additional 10 delineation wells to bring the total well count to 27 delineation wells. North Peace said it also drilled five conventional exploration wells outside the Red Earth area. Three wells (1.6 wells net to North Peace) of t he e x plorat ion prog ra m were successful, resulting in 177,800 bbls of proved-plus-probable reserves and a net-present value before tax of $3.7 million. The company said its current working capital is approximately $4 million. North Peace completed an $11.6-million financing on June 23, 2009, issuing 21.1 million common shares. The company has announced a strategic review and has entered into an agreement to sell a portion of its drilling royalty credits.
NORTHWESTERN ALBERTA/FOOTHILLS WELL ACTIVITY
APR/09
APR/10
WELL LICENCES
37
69
▲
APR/09
APR/10
WELLS SPUDDED
24
35
▲
APR/09
APR/10
WELLS DRILLED
28
65
▲
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • JUNE 2010
49
Northwestern Alberta/Foothills
Seaview cases first horizontal Cardium well at Wapiti Seaview Energy Inc. has successfully drilled and cased its first horizontal well in Wapiti, targeting an early-stage light oil resource play in the Cardium formation. The horizontal well has been completed with a 10-stage multi-fracture completion and is currently flowing on cleanup, said the junior in releasing its fourth quarter 2009 results. Seaview has assembled a sizable land position offsetting the horizontal well with exposure to 11.5 (6.5 net) sections of land on the new exploration play. The Cardium formation in Wapiti is known to produce both oil and natural gas regionally, but to date has not been developed using horizontal wells with multi-frac completion technology, according to Seaview. Cash f low and revenues were up sharply in both the 3 and 12 months ended Dec. 31, 2009, but so were the losses, as Seaview recorded a net loss of $2.37 million (four cents per share) for the fourth quarter and a loss of $9.61 million (16 cents per share) for the year (see tables). Despite the challenges of volatile commodity prices and weak capital markets due to the global economic crisis, the company achieved record production levels of 2,729 barrels of oil equivalent per day (boe/d) in the fourth quarter, its ninth consecutive quarter of growth since inception in the fourth quarter of 2007. Production for the year of 2,321 boe/d was more than double the 2008 average of 1,077 boe/d. The company is forecasting average daily production of more than 3,200 boe/d for 2010 and has a hedging program in place that provides for downside
protection on 48 per cent of forecast average production this year. Seaview’s management team continues to focus on consolidating high-quality assets within its core areas with significant exploration and development opportunities. In 2009, it successfully closed five property acquisitions, further consolidating core assets in the Peace River Arch. In the fourth quarter, Seaview purchased assets in four separate acquisitions for a total of $3.8 million. Each of the minor property acquisitions added high working-interest follow-up drilling locations based on the successful third-quarter drilling program. Seaview drilled 11 (nine net) wells in 2009 at a 73 per cent success rate. In the Peace River Arch, it drilled seven (6.6 net) wells with a 71 per cent success rate. Results of the 2009 drilling program yielded four (3.6 net) producing gas wells, one net potential gas well, and two net abandoned wells. One of the abandoned wells encountered the target reservoir but was abandoned due to operational problems and was subsequently successfully re-drilled in the first quarter of 2010. The forecast capital budget for 2010 is $11.5 million. Activity for the winter program to date in 2010 included drilling five (four net) wells at an 80 per cent success rate. At Clayhurst in the Peace River Arch, the company re-drilled one net Montney well which has been successfully completed and tied in with initial rates expected to add more than 80 boe/d net in the second quarter. The company also drilled one net unsuccessful well at Boundary Lake. At Wapit i, Seav iew dr i l led t wo (one net) wells as part of the ongoing
ex plorat ion prog ra m ta rget i ng t he Cardium formation. One (0.32 net) vertical gas well was drilled and completed testing Cardium gas similar to the vertical exploration well drilled in late 2009. Seaview has now completed the earning phase on the gas exploration portion of the program, earning 32 per cent in three sections of land on the Cardium natural gas resource play. Seaview estimates current behind pipe volumes of more than 850 boe/d from seven (4.8 net) wells. It is anticipated that five (3.1 net) wells will be brought onstream during the second quarter, adding more than 250 boe/d net of new production. The remaining two (1.8 net) wells to be tied in have initial production of more than 600 boe/d, which may be tied in before year-end contingent on facility access and improved gas prices. Due in large part to its 2009 acquisitions, the company earlier reported a 49 per cent increase in total proven reserves to 7.14 million boe effective Dec. 31, 2009, as evaluated by Sproule and Associates usi ng Nat iona l Inst r ument 51–101 reserve definitions (Daily Oil Bulletin, Mar. 8, 2010). Total proved-plus-probable reserves grew to 11.07 million boe from 7.26 million boe. Seaview has a reservelife index of 11.1 years based on total proved-plus-probable reserves and fourthquarter production of 2,729 boe/d. In 20 09, Seav iew ex pa nded it s credit facility by 53 per cent to $52 million. Based on net debt of approximately $40 million at the end of the fourth quarter, the company has $12 million of available credit capacity with which to pursue strategic acquisitions.
TAKE YOUR PICK
www.cjsflatpak.ca 50
JUNE 2010 • OIL & GAS INQUIRER
FLATpak umbilicals offer a wide range of dual and triple options, tailored to your specific needs
iOn n vacat O E 'r u O ry rEa WHEtHE in tHE a
E c n E i r ExpE
inG Or WOrk
E G D O L tHE
, s n o i t a d o m m o c Ac , s l a e M Hot on, i t a e r c e R ore… and m n pment o lo e v a Lake e d ly f Christin On o s e r o h es the pristin ront s, waterf m o o r e dg itor y Main lo ins, dorm b a c w ie d and lakev mpgroun a c V R d rooms an room d dining e r e t a C ion d recreat n u o r ra e Y step our door y t a t h ig r
r u o Y e k a M y a d o T n o i t Reserva 9 2224 1 780 55 dge.com tinalakelo s ri h c @ info
DGE.cOm O L E k a L a cHristin
10-0120
■ 16 lots for sale in Estevan, SK. ■ SW 29-2-7-W2 New Bypass Industrial Park New Truck ■ Re-zoned for commercial / Route opening in light industrial lots front of quarter ■ Lot sizes vary from in 2010 4.2 acres to 27 acres Directions from Estevan Hwy 39 – 1 mile North or 1½ miles East of Estevan
N New Truck Route
11
9
10
8
7
6
2
A little slow now? It’s not going to last! Rig & sub design, modification, inspection, certification or equipment issues? You won’t have the time when it gets busy again, so contact us now!
5 3
1
Estevan Town Limits – 1½ miles east to property
4 4
1
5
3 2
1 1
Hwy #39 – 1 mile north to property
For more information please contact Gary at 780-305-9255 1174365 Alberta Ltd. Operating as Gar-Lin Investments garymbr@telus.net
52
now is the time
JUNE 2010 • OIL & GAS INQUIRER
780.483.3436 2nd Flr, 17510-102 Avenue, Edmonton, AB T5S 1K2 email: sales@arneng.ab.ca www.arneng.ab.ca
Northeastern Alberta
Photo: Joey Podlubny
Stelmach vows end to tailings ponds as ERCB approves more
Premier Ed Stelmach says technology exists to eliminate tailings ponds but deployment will take time.
A day after Premier Ed Stelmach said wet tailings ponds should be eliminated, the Alberta Energy Resources Conservation Board (ERCB) gave conditional approval for plans by the Fort Hills Oil Sands Project and Syncrude Canada Ltd. with dates for construction, use, and closure of fluid tailings ponds. The tailings plans are the first of those submitted to the ERCB by six oilsands operators in September 2009. Under directive 074, operators are required to prepare tailings plans and report on tailings ponds annually, reduce fluid tailings through fines captured in dedicated disposal areas, and convert fines into trafficable deposits which are ready for reclamation five years after deposits have ceased. During a media scrum on April 22, the Alberta premier said he’s aiming to ensure tailings ponds are eliminated. He
also said that Hollywood director James Cameron should come to see the development in northeastern Alberta. Cameron, who directed the movie Avatar, has publicly criticized the oilsands. “He, unfortunately, perhaps was led to a conclusion without all of the information being presented,” the premier said. “Our goal is to ensure that we eliminate tailings ponds. That’s what people are focusing on and that’s the direction we’re taking,” Stelmach said. “It can’t be done overnight, but we know that the technology is there to start that process and we’ll be doing that. We’re going to have to force, and when I say force, we’re going to get more aggressive in working with companies in…open-pit mining to move to either dry tailings or develop that resource without wet tailings ponds.” When pressed again for a timeline, the premier replied, “I can’t give you a definite
one, but I know that within a matter of a few years we should be able to get there.” As for the newly approved tailings ponds, Fort Hills plans to operate one tailings pond with a tailings storage capacity of 322 million cubic metres, which will operate for approximately 22 years, with a plan to dry tailings to a trafficable surface in compliance with the directive, the board said. The ERCB has imposed two conditions focusing on technology testing and tailings management in its approval of the Fort Hills tailings plan. Suncor Energy Ltd., UTS Energy Corporation, and Teck Limited are partners in the Fort Hills project. The ERCB has placed six conditions on its approval for Syncrude’s Mildred Lake site, located about 40 kilometres northwest of Fort McMurray, Alta. The site currently deposits tailings in five tailings areas. These areas have a fluid fine tailings inventory of 430 million cubic metres and are scheduled to be returned to a trafficable surface in 2016, 2020, and 2023, with the Mildred Lake Settling Basin scheduled for return to a trafficable surface in 2060. The board has placed six conditions on its approval for Syncrude’s Aurora North site, located about 80 kilometres northeast of Fort McMurray. The site currently operates a single tailings pond with a current fluid fine tailings inventory of 75 million cubic metres, which is scheduled to be returned to a trafficable surface in 2037. Syncrude is in the design stage of a composite tailings plant at Aurora and plans to have this plant operational and in compliance with the directive in 2014. The Syncrude plans as filed on Sept. 30, 2009, did not fully meet ERCB requirements, the board said, adding that consultations between Syncrude and the ERCB have seen significant improvements to the company’s plans. — DAILY OIL BULLETIN
NORTHEASTERN ALBERTA WELL ACTIVITY
APR/09
APR/10
WELL LICENCES
59
62
▲
APR/09
APR/10
WELLS SPUDDED
49
57
▲
APR/09
APR/10
WELLS DRILLED
42
69
▲
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • JUNE 2010
53
Northeastern Alberta
Connacher Oil and Gas Limited has completed construction of its second steam assisted gravity drainage oilsands project at Great Divide in northeastern Alberta. Algar has a design steam generation capacity of 30,000 barrels per day (bbl/d), which at its long-term target peak operating steam to oil ratio of 3 to 0, is anticipated to facilitate production of 10,000 bbl/d of bitumen over a project life of more than 25 years. The project was designed to allow for expansion to 34,000 bbl/d of bitumen production in subsequent years. Major civil work at Algar, including construction of the plant site, access road and well pads, was completed in February 2009. Project field construction and fabrication commenced on July 7, 2009. Drilling of the 17 steam assisted gravity drainage (SAGD) well pairs at Algar and concurrent construction of the steam generation facility and oil processing plant were reportedly completed in 273 working days, less than the 275 working-days target set out by the company. Capital expenses are still being accumulated and won’t be final until after commissioning of the project. Connacher anticipates the total construction costs of Algar will be under its announced $375-million budget. A total of 390 standard loads and an additional 175 large loads of material, skids, and component parts were trucked to the Algar site during construction. The project incorporated 1,900,000 kilograms of structural steel and 280,000 inches of welding on 8,800 spools. Overall, the project reportedly had an extremely low spool revision rate of approximately one per cent.
Photo: JJoey Podlubny
Connacher completes Algar construction ahead of schedule
Connacher chairman Dick Gusella says Algar should reach 10,000 bbls/d by the second half of 2011.
The project also incorporated 36 vessels, 84 heat exchangers, 52 tanks, and 190 pumps. Over 700,000 field and shop man-hours of employment were created during Algar’s construction, primarily in Canada. At peak construction, 400 workers were employed on site. Connacher also announced that commissioning of the Algar plant will commence immediately. It is anticipated that the commissioning process will take up to 30 days and will include tie-in of the three SAGD well pads to the steam-generation facility and oil processing plant. Also, the evaporators and all vessels will be tested along with the treating, instrumentation, and electrical systems. Commissioning of
the steam pipelines and SAGD well pads will follow. The next step will then be the commencement of sequential injection of steam into Algar’s 17 SAGD well pairs. Connacher plans to steam the well pairs for approximately 90 days prior to the initial production of bitumen. The process will be closely monitored to determine the optimum production startup date, based on individual well response. As all wells will not be brought on stream simultaneously, the company anticipates ramping up bitumen production towards design capacity of 10,000 bbl/d by the second half of 2011. — DAILY OIL BULLETIN
Mullen Group subsidiary wins Suncor tailings contract Mullen Group Ltd. says its wholly owned operating subsidiary Canadian Dewatering L.P. has been awarded a major contract by Suncor Energy Inc. as part of the company’s new approach to tailings management at its oilsands mining operations. Work is scheduled to begin in mid-2010. “This is an important new piece of business for our organization, one that expands the service offerings Canadian 54
JUNE 2010 • OIL & GAS INQUIRER
Dewatering provides to one of our largest customers. Being chosen by Suncor to manage the design, build, and commissioning of a state-of-the-art Thin Fine Tailing Barge System specifically to support Suncor’s initiatives related to their tailings reduction operations has our entire organization excited and engaged,” said Dale Marchand, president of Canadian Dewatering.
Mullen Group first invested in the pumpi ng, water ma nagement, a nd dewatering business in 2004 with the acquisition of Northern Under water Systems Ltd. In 2006, Mullen Group acquired Canadian Dewatering based out of British Columbia, which was one of the largest providers of pumping and water management services in western Canada. — DAILY OIL BULLETIN
Northeastern Alberta
China’s Sinopec buys ConocoPhillips’s stake in Syncrude for $4.65B A Chinese energy giant is buying ConocoPhillips’s minority stake in the world’s largest oilsands venture for US$4.65 billion, as the Asian country seeks to quench its burgeoning economy’s thirst for resources. On April 12, ConocoPhillips said it had agreed to sell its nine per cent interest in the Syncrude Canada Ltd. partnership to subsidiaries of Sinopec International Petroleum Exploration and Production Co. The deal should close in the third quarter of this year, pending approvals by the Chinese and Canadian governments, ConocoPhillips said. “We are pleased that [Sinopec] has recognized the value of this quality asset,” company chairman and CEO Jim Mulva said in a statement. Si nopec had a l ready g rabbed a foothold in the oilsands through its 50 per cent stake in Total E&P Canada’s Northern Lights project. But the deal
with ConocoPhillips is China’s biggest move in the oilsands so far. It makes sense that Sinopec would want in on the Syncrude joint venture, said portfolio manager John Stephenson at First Asset Investment Management. “The big markets are shifting east, rather than west. The West is in decline, the East is surging higher,” he said. Some observers had pegged the most likely buyer of ConocoPhillips’s interest to be Canadian Oil Sands Trust, already the majority partner in Syncrude with a 37 per cent stake. “But I think everybody would have had to consider the Chinese as being interested parties as well,” said Lanny Pendill, an analyst with the Edward Jones brokerage in St. Louis. “They’ve made it very clear that they view the Canadian environment very positively from a political stability standpoint. We all know they’re trying
to lock up future supply of oil. It’s not surprising.” Syncrude, an oilsands mining operation north of Fort McMurray, Alta., has a capacity of up to 350,000 barrels of oil per day. Imperial has a 25 per cent stake, Suncor has a 12 per cent stake, Nexen has a 7 per cent stake and Murphy Oil Co. and Mocal Energy each have a 5 per cent interest. Another state-owned energy firm, PetroChina, said in August it would invest nearly $2 billion for a majority stake in projects controlled by Athabasca Oil Sands Corp. Edward Jones’s Pendill said he sees China continuing to invest in the oilsands through joint-venture arrangements like the Syncrude, Northern Lights, and Athabasca projects. “There’s going to be plenty of opportunities to be doing more of that going forward,” he said. — CANADIAN PRESS
Peters and Co. forecasts a narrow heavy-light crude price gap While the differential between Canadian light and heavy crudes has widened in recent weeks, Peters and Co. Limited is forecasting narrower-than-historic levels in the longer term. “Aside from periodic fluctuations in the light-heavy differential, we believe that a narrow long-term differential will prevail,” the investment banker says in an energy update. “The narrower light-heavy differential we experienced through 2009 and into early 2010 represents a long-term structural change in the Canadian heavy oil markets through 2015,” Peters predicted. The investment banker attributes the recent widening in the differential to about 20 per cent due largely to a number of temporary market conditions. In 2009, the Edmonton Par-Western Canadian Select differential averaged 12 per cent, down from 19 per cent in 2008 and historic levels of 30 per cent. So far this year, the light-heavy differential has averaged approximately 10 per cent, reflecting the strong demand for Canadian heavy crude in the U.S. Midwest (PADD II) and the Gulf Coast (PADD III), where additional pipeline capacity has enabled increased exports into those markets.
In the longer term, Peters believes that the significant takeaway capacity and coking capacities available for Canadian heavy crudes will support a narrow differential compared to its historic level. It continues to forecast a 2010 differential of 15 per cent, rising to 20 per cent between 2011 and 2015. Two new export pipelines, TransCanada Corp.’s 435,000 bbl/d Keystone and Enbridge Inc.’s 450,000 bbl/d Alberta Clipper, both into the U.S. Midwest, are expected to be in service by later this year. Pipeline fill is now under way after some delays that Peters suggests may have contributed to the slightly wider differential. Keystone will add another 155,000 bbl/d with an extension to Cushing, Oklahoma, next year. Based on its updated oilsands production outlook, this capacity should be adequate to 2015, says Peters. In addition to the current excess pipeline capacity into the Midwest, proposed projects would significantly increase access to the Gulf Coast. TransCanada’s Keystone XL pipeline currently awaiting U.S. regulatory permits would transport 700,000 bbl/d from Hardisty to the Cushing area with 500,000 bbl/d to the Gulf Coast.
Also proposed are a 30,000 bbl/d expansion of the ExxonMobil Pegasus pipeline, the 150,000 bbl/d BP/Enbridge Gulf Access line, and the 400,000 bbl/d ExxonMobil/Enbridge Patoka to Beaumont, Texas, extension. In its report, Peters attributed the widening differential to increased oilsands production offset by a reduced demand for heavy feedstocks, as a number of Canadian and U.S. refineries have been going through seasonal planned turnarounds and in some cases, unplanned turnaround activity. Continued weak refining margins cont inue to dr ive dema nd for t he heavier feedstocks, according to Peters. Lloydminster coking margins continue to provide refiners with the greatest profitability compared to other feedstocks in the U.S. mid-continent region, providing refiners with the coking capacity relatively stronger margins in a weak refined product environment. “Should demand for refined products increase significantly, refiners may elect to utilize light crude runs but, overall, the heavier barrels will provide these refiners with greater product yields and higher margins,” said the investment banker. — DAILY OIL BULLETIN OIL & GAS INQUIRER • JUNE 2010
55
Northeastern Alberta
Husky Energy plans to boost its heavy oil spending Husky Energy Inc. plans to increase capital spending on heavy oil. “We just acquired more reserves from Penn West [Energy Trust] on heavy oil,” said company president John Lau. “We are looking at other M&A [merger and acquisition] activities for the heav y oil side. How much the company will spend on heavy oil this year hasn’t been decided yet and will depend on opportunities that arise, Lau said at the company’s annual meeting on April 20. Current plans call for the drilling of 445 heavy oil wells this year. When Lau became Husky’s CEO in 1993, its heavy oil output was about 12,000 barrels per day (bbl/d). Today, it’s close to 100,000 bbl/d. Husky is the largest holder of proved reserves of Canadian heavy oil with 120 million barrels booked at the end of 2009. “Something people ignore or forget about is heav y oil,” Lau said. In the fourth quarter of 2009, Husky’s heavy oil operating netback was $37.16 compared with $19.55 in the corresponding 2008 period. “For the year 2010, we will
be more focused on heavy oil, but more or less on the Saskatchewan side,” the Husky CEO added. While the Calgary-based producer is reaping the benefits of strong heavy oil prices, profits at its Lloydminster heavy oil upgrader are being squeezed by narrow heavy oil differentials. Upgraders make money on the spread between the price of heavy feedstock and the price of their synthetic crude product. L a st yea r, t he spread b et wee n Lloydminster crude blend and West Texas Intermediate crude oil averaged only US$9.93/bbl—down by more than half from $20.30 in 2008 and $23.81 in 2007. Net earnings from Husky’s upgrading segment plunged to $54 million last year from $246 million in 2008 and $268 million in 2007. The company cited the reduction in the upgrading differential, which resulted from narrow heavy oil differentials last year. Howe ve r, Hu sk y ’s app et ite f or upgrading isn’t diminished. Lau noted that even today’s differential of $11 or $12—although poor compared to recent
GRANDE PRAIRIE REGIONAL COLLEGE WORKFORCE DEVELOPMENT
Safety and Equipment Training Courses Starting Now! Picker Operator Overhead Crane Aerial Lift Operator REGISTER NOW! 780.539.2975
years—is much better than the $4 to $5 expected when Husky began operating the upgrader. “So it generated a lot of cash flow for us,” he said. Husky plans to expand the upgrader, which has a processing capacity of 82,000 bbl/d, in the medium or long term. On a much larger scale, Husky is seeking a big partner for a joint venture to develop technology to realize the company’s vast bitumen resource trapped in carbonate rock. Cracking the code for commercial bitumen production from the carbonates depends on technology development, and Husky, which “is very financially prudent,” is looking for a major international company to share the risk, the reward, and technological expertise, Lau said. At Sunrise, Husky has a 50-50 partnership with BP plc for a planned thermal bitumen project in northeastern Alberta. Lau said that Husky and BP are still on track with their plan to decide by the end of the year whether to proceed with construction of the Sunrise megaproject. — DAILY OIL BULLETIN
hazardous duty solutions
Safety and peace-of-mind for your people, plant, and processes Reliable safety shut-off (ESD) valves offer global approvals, SIL-3 capable with partial stroke testing. Trusted operation in low temps to -40°C. Precise digital flow control systems offer advanced diagnostics.
Visit our website for complete course listings:
workforce.gprc.ab.ca
Visit www.maxoncorp.com for more information ©2010 Honeywell International Inc.
56
JUNE 2010 • OIL & GAS INQUIRER
Northeastern Alberta
Oilsands producers look forward to a promising decade For the next decade, oilsands producers anticipate relatively narrow differentials and high bitumen prices. First, there is ample pipeline capacity from western Canada into the United States. Second, higher demand for heavier slates of crude is coming in the short term from U.S. Midwest refinery expansions and later on from Gulf of Mexico refineries. Transportation availability stems in the short term from the more moderate pace of oilsands development. By 2013, significant volumes could potentially be heading as far as the Gulf of Mexico, where heavy crude markets already used to handling heavy crudes are eager for an additional source of supply to replace the declining volumes of Venezuelan and Mexican crudes. Both TransCanada Cor poration’s 435,000-barrel-per-day (bbl/d) Keystone Pipeline from Hardisty to Wood River/ Patoka, Illinois, and Enbridge Inc.’s 450,000 bbl/d Alberta Clipper pipeline from Hardisty to Superior, Wisconsin, are expected to be in operation by the end of this year.
Combined with the existing Enbridge mainline, Express Pipeline and Kinder Morgan Canada Inc.’s TransMountain pipeline to the West Coast, producers will have access to 3.35 million barrels per day (MMbbl/d) out of western Canada, far more than production capacity. In 2011, the Keystone extension will add another 155,000 bbl/d from Steele City, Nebraska, to Cushing, Oklahoma, extending its reach into southern PADD II, while Keystone XL, which would transport 700,000 bbl/d of Canadian crude from Hardisty to the Gulf Coast by 2013, already has National Energy Board approval in Canada and is waiting for U.S. approvals. In the short term, the U.S. Midwest, the traditional market for Canadian bitumen, will offer additional opportunities as several large-scale refinery conversions and expansions are underway to accommodate heavier Canadian crudes. “There’s a good chance that when they start up, there actually will be a shortage of crude in the Midwest,” said Tom Wise, VP in the Calgary office of consultants Purvin & Gertz, Inc. “It was like that in the 1990s,
when the Midwest was importing heavy crudes from the Gulf Coast.” This time, though, U.S. Midwest refineries likely will find it difficult to bring in crude from the Gulf because that area also will be short, Wise said. “There just won’t be enough to go around, and that bodes well for the heavy producer here at least for that period.” “The U.S. Gulf Coast is the deepest heavy crude market in the world; it is the most liquid,” Harold “Skip” York, VP downstream consulting—Americas, for Wood Mackenzie, said in an interview. “As long as Mexican and Venezuelan production continues to decline, it makes room for Brazil and Canadian barrels, plus we are going to have expansions [on the Gulf].” Last year, the Canadian Association of Petroleum Producers’ forecast that total oilsands and upgrader production under a moderate growth scenario would grow to 2.57 MMbbl/d in 2015 and 3.33 MMbbl/d by 2020. The association will be coming out with a new forecast shortly, but early indications are that it will be similar to last year. — DAILY OIL BULLETIN
YOU WANT A GREAT CAREER EXPERIENCE. How would you feel about going to work if you had great colleagues who respected your talent, unlimited career opportunities and a sense of pride in your company’s experience and reputation? Join Suncor Energy and you’ll know that feeling.
Ready to be proud of your workplace?
Put yourself in our picture. As part of Suncor, you’ll be working with the fifth largest North American-based energy company with a solid track record and tremendous future potential – a company where talented people thrive. Suncor has the best job opportunities for newly qualified tradespeople and professionals, all the way to industry veterans. If you’re ready to take your career in exciting new directions, picture yourself at Suncor.
Put yourself in our picture by applying at www.suncor.com/careers © 2010 NAS (Media: delete copyright notice)
Oilweek, Oilsand Review, Oil and Gas
OIL & GAS INQUIRER • JUNE 2010
57
microbial solutions WWW.DPSMICROBIAL.COM
PICK UP—PURGING—DISPOSAL
IBC (TOTE) RE - CERTIFICATIONS CONTROL & ELIMINATE PARAFFIN, IRON SULPHIDES AND ASPHALTENES IN OILFIELD PRODUCTION AND INJECTION WELLS .
THE ENVIRONMENTALLY FRIENDLY
Diversified Glycol svs inc 1-888-242-7270 Red Deer, AB
ALTERNATIVE.
diversifiedglycol@yahoo.ca
Red Deer, AB
403.990.1582
Calgary, AB
403.686.7020
Frobisher, SK
306.486.2110
“Industry Leading Quality & Service Since 1987” Specialists in internal & external coating applications Epoxies • Metallizing • Fibreglass Linings • Plural Spray Pipe • Tanks • Vessels • Towers • Valves 6150 - 76 Avenue, Edmonton, AB T6B 0A6 Phone (780) 440-2855 Fax (780) 440-1050
• 100% Canadian Owned • www.brotherscoating.com Canada’s Oil and Gas Process Technology Leader Since 1954 Certified to ISO 9001:2000 e s At Th 10 Visit U ow 20 um Sh Center le o tr e P Global 09 Roundup 10 Booth
PARTS - SERVICE - FABRICATION REPAIRS - REBUILDS
Toll Free: 1-888-256-6506 Flame Cells • Mist Pads • Anodes • Peep Sights • Tank Flanges • Thermostats Telephone: (780) 955-8009 Fax: (780) 955-8028
Black, Sivalls & Bryson (Canada) Ltd.
BS&B Valves • Kubota Engine Parts • Scrubbers • Burner Tips Bubble Caps • PEC-Clutches • In-line Arrestors • Thief Hatches Air Mixers • Ceramic Saddles Pall Rings • Gaskets • Pilots • Orifices • Fire Tubes Coils • Water Columns • Eco-Screen Filters • BS&B Pneumatic Pump www.oilfieldpartsxpress.com
58
JUNE 2010 • OIL & GAS INQUIRER
Central Alberta
Daylight calls its latest Cardium horizontal results “exceptional”
Daylight has reallocated capital from its natural gas program to its Pembina Cardium oil program.
Daylight Resources Trust has announced what it calls “exceptional” results from the first series of nine (8.4 net) Pembina Cardium horizontal oil wells. The first well drilled at Tomahawk in the north Pembina area came on production during March at over 2,100 barrels of oil equivalent per day (boe/d) at 100 per cent working interest (WI). During its first month of production, this well produced over 31,000 barrels (bbls) of new oil resulting in an average calendar day producing rate of over 1,000 boe/d. With the recent installation of artificial lift, this well is currently producing in excess of 1,200 boe/d. The second Tomahawk well came on production during March and produced at an average initial rate of 290 boe/d (100 per cent WI). Two (1.7 net) additional wells drilled in Tomahawk have recently finished unloading their completion fluid
and are producing new oil at rates of 460 boe/d and 160 boe/d respectively. Based on these initial results, Daylight believes that the north Pembina area of Tomahawk may well be one of the more highly prospective areas for the emerging
further well has been completed and has flowed back 80 per cent of its load fluid at a rate similar to the initial Brazeau well. Three (2.8 net) additional wells have been drilled with completion operations currently in progress. In addition to the above wells, Daylight also has seven (3.8 net) additional Cardium horizontal wells in various stages of completion, tie-in, and production at Pine Creek. These wells have all encountered the Cardium zone with expected geological results. The first Pine Creek well (13.5 per cent WI non-operated) has come on production with a very strong initial production rate of 350 boe/d. One additional well (27.1 per cent WI nonoperated) is cleaning up its load fluid with the two remaining non-operated wells waiting on completion. Daylight has commenced its operated program at Pine Creek with the drilling of three (three net) Cardium wells, all of which are finished drilling and are awaiting completion. The trust said it continues to advance its knowledge and experience with the application of new horizontal drilling and completion technologies. It has increased the length and number of fracs applied to
Daylight believes the north Pembina area of Tomahawk may be one of the more highly prospective areas for the emerging Cardium oil development. Cardium oil development, complementing the trust’s significant position at Brazeau on the southwest edge of the Pembina Cardium pool. At Brazeau, Daylight has recently completed its first series of horizontal Cardium oil wells, including the first well (100 per cent WI) which came on production at a rate of 470 boe/d. One (100 per cent WI)
Cardium horizontal oil wells as it pursues optimization of wellbore design. Daylight has reallocated capital from its natural gas program to its Pembina Cardium oil program based on highly successful Pembina results to date and the current commodity price strength of oil versus natural gas. The trust has also elected to defer the on-stream timing of
APR/09
APR/10
APR/09
APR/10
WELLS SPUDDED
9
22
WELLS DRILLED
12
25
CENTRAL ALBERTA WELL ACTIVITY
APR/09
APR/10
WELL LICENCES
46
207
▲
▲
▲
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • JUNE 2010
59
Central Alberta certain natural gas volumes from its firstquarter drilling program due to recent weakness in natural gas prices. In addition to the Cardium activity, Daylight said it has been active in its natural gas resource play developments. Its first horizontal Nikanassin well was successfully drilled, with clean-up test rates from an eight-frac, 700-metre horizontal completion of greater than 7 MMcf/d. The well is tied in and is expected to come on production later in 2010 when natural gas prices are anticipated to be stronger. Daylight plans to increase the length and number of fracs in future horizontal
Nikanassin wells as it optimizes the wellbore design based on this successful “proof of concept” for horizontal Nikanassin potential. At Elmworth, Daylight continued its successful development of the Cadomin natural gas resource play. During the first quarter, the trust’s latest horizontal well (45 per cent WI) attained a first week calendar day initial production rate of 13 MMcf/d. Due to the strong production inflow from this well, the up-hole Cretaceous zones have not yet been completed. Continuing with Daylight’s long-term strategy of counter-cyclical acquisition of
growth opportunities, the trust announced the acquisition of 40 sections of 100 per cent WI lands in its Elmworth area. These lands were acquired at recent Alberta land sales for $5.5 million and are on trend with several successful wells. Daylight considers these lands highly prospective for both the Cadomin and the Nikanassin, increasing its land holdings in this key natural gas Deep Basin resource play area to over 400-gross (265 net) sections, with over 200-net prospective sections in each of the Cadomin and Nikanassin resource plays. — DAILY OIL BULLETIN
Triton reports a liquids-rich Rich Ellerslie gas discovery A six-metre Ellerslie channel sand was discovered at 3,120 metres. Triton’s mapping indicates this Ellerslie discovery to be significant, as it is an extension of the highly productive Ferrier Ellerslie F pool located six miles to the northeast. T he 6 -30 well is expected to be placed on production at 2 MMcf/d of raw gas plus 50 bbls/MMcf of natural gas liquids (approx. 365 boe/d of sales). Tr iton has an 83 per cent work ing interest in the well. Triton said it is immediately commencing a second deepening operation at the adjacent 14-29-37-8W5 well.
Photo: Joey Podlubny
Triton Energy Corp. has announced an Ellerslie liquids-rich natural gas discovery well in its Strachan/Ricinus core area of west-central Alberta and the acquisition of 15 sections of Crown land directly on the Ellerslie trend. The well was fracture stimulated on March 27 and is currently flowing 3 MMcf/d with 2 bbls/hr of frac fluid on fracture clean-up. The well is tied in and will be tested in-line once the final tubing string is snubbed into place. The company said it confirmed its exploration concepts in its Strachan/ Ricinus core area by deepening a suspended well 55 metres at 6-30-37-8W5.
Following up its 6-30 liquids-rich well, Triton immediately began an adjacent deepening operation. 60
JUNE 2010 • OIL & GAS INQUIRER
The 14-29 well is 100 per cent owned and is expected to encounter a thicker sand sequence based on 3-D seismic interpretation. Additionally, Triton’s third exploration prospect on this channel sand system is licensed as a 100 per cent working interest 3,500-metre test well located ten miles south at Triton Ricinus 15-10-36-9W5 and is planned to spud in the second quarter of 2010. At a highly competitive Crown land sale on March 24, Triton acquired 100 per cent working interests in 15 key sections of lands that it posted. Triton now has 20-net sections of land directly on-trend with the Ellerslie channel discovery. The Strachan/ Ricinus Ellerslie lands with a large amount of gas in place per section are approved to be drilled at up to four wells per section on select lands. The analogous Ferrier Ellerslie F pool has produced 70 Bcf to date from this Ellerslie channel with ultimate gas recovery forecasted to average 4.6 Bbcf per well. Triton noted its management team has considerable experience targeting Lower Cretaceous deep-basin channel sands through a combination of geological and geophysical models. The wells are expected to generate a risked 20 per cent rate of return at gas prices of approximately $3.50 per Mcf. Additionally, recent proposed changes to the Alberta Crown royalty regime are expected to enhance liquids-rich natural gas well economics. Other prospective zones in Tr iton’s Strachan /R icinus core area include the Cardium, Viking, Glauconite, and Rock Creek. — DAILY OIL BULLETIN
Central Alberta
Alberta land sale produces $112.7M in bonus revenue Alberta is continuing its run of solid land sale results as the crown auction on April 7 generated a bonus of $112.68 million, the third highest after six sales so far in 2010. The sale, the first of the provincial government’s 2010–2011 fiscal year, produced an average of $974.37 for 115,645 hectares. The same sale last year brought in just $6.25 million on 30,900 hectares, which worked out to an average of $202.28. For t he f i r st si x sa le s of t h i s calendar year, total bonus revenue rose dramatically to $567.07 million for 1.01 million hectares at an average of $559.26. To the same point in 2009, $62.14 million had rolled into government coffers at an average of $124.39 for 499,639 hectares. The top bonus and per-hectare averages were paid at 50-10W5 in the Pembina area as industry has been focusing on re-entering areas that have been heavily drilled but are being unlocked to a greater extent with new technology. Nine lease parcels at 50-10W5 combined for a total bonus of $21.8 million, and featured the highest per-hectare averages. Scott Land & Lease Ltd. plunked
The Pembina area is generating good revenue on the strength of Cardium re-entry prospects.
down $5.03 million for the southern half and northeast quarter of section 21 at 50-10W5 for petroleum and natural gas below the base of the Belly River Group. The 192-hectare lease went for an average of $26,232, which tied with two other parcels in the area for the land-sale high. Scott also tendered the bonus high, paying $9.31 million for a 512-hectare licence parcel. The broker paid an average
of $18,193 for sections 22 and 27 at 50-10W5 for petroleum and natural gas below the base of the Belly River Group. Daily Oil Bulletin records show that Baytex Energy Ltd. rig released a well on March 16 in the Pembina area at surface location 16-2-50-10W5 with the Nordegg member listed as the terminating zone and gas as the objective. — DAILY OIL BULLETIN
Flint announces its acquisition of PES Surface Flint Energy Services Ltd. has acquired all of the issued shares of PES Surface Inc. (PSI), a subsidiary of Paintearth Energy Services Inc., for approximately $7.3 million in cash and the assumption of $610,000 debt, subsequent to closing adjustments. PSI is a production-equipment fabrication company with a facility located in central Alberta. PSI will provide the platform for Flint to add engineering and design solutions
for production equipment to Flint’s customers in western Canada. This wider range of services will include gas dehydration, dewpoint control, gas filtration, BTEX removal and incineration, oil dehydration, and process equipment design to match the production specifications of the field and formation it is designed for. Flint has been a leader in the design and manufacturing of oil and gas production equipment across the United States
for a number of years. This facility and workforce will allow Flint to expand its production-equipment manufacturing services into Canada. Flint said its extensive geographic footprint and business-development team will be used to expand the sales and grow the business. The close tie to Production Services will allow for the design manufacturing and field installation of equipment, providing production solutions to customers.
Health & Dental Plans
read more online at energizealberta.com Where energy, the economy, and the environment intersect.
1 - 50 Employees Single $88
Couple $177 Family $250
Call Gord • No Medical Questions for Groups of 3 or more • Plans Tailored to fit your employees & contractors (403) 703-4105
www.easycoverage.ca OIL & GAS INQUIRER • JUNE 2010
61
Manufacturer of: • Water storage tanks up to 12,000 imp. gal. • Water hauling tanks • Chemical tanks • Secondary containment basins • 100, 300, 500 & 1,000 gallon double wall tanks
®
7520 Yellowhead Trail, Edmonton, Alberta, T5B 1G3 Ph: (780) 474-7440 Fax: (780) 474-3454 Toll Free: 1-888-474-7441
Now Open in Grande Prairie www.norwescocanada.com Email: info@norwescocanada.com
www.nait.ca/cit
invest in your experts corporate training for the real world
YEAR ROUND INDUSTRIAL & COMMERCIAL INSTALLATION • Chain Link Fence and Gates • Electric Gate Operators & Access Controls • Pre-Manufactured/Portable Site Enclosures • Industry Leading Health, Safety & Environmental Program
As innovation continues to change how people interact with technology, analyze data and move business forward, there’s never been a better time to invest in training for your employees. NAIT Corporate and International Training can help — delivering relevant, timely training designed to meet your needs. Our expertise includes certificate programs and customizable courses in Project Management, Leadership, Office Technology and Accounting, Team building, Trade-specific training and much more.
Develop your future leaders. Call us today. ph (780) 378.1230 email cittraining@nait.ca
We also offer Safety Fence, T-Posts, Ornamental Fence & Vinyl Fence EDMONTON
(780)447-1919
12816 - 156 St. Fax: (780) 447-2512 edmonton@phoenixfence.ca
1-800-661-9847
62
JUNE 2010 • OIL & GAS INQUIRER
CALGARY
(403)259-5155
6204 - 2nd St. S.E. Fax: (403) 259-2262 calgary@phoenixfence.ca
1-888-220-2525
corporate and international training
Southern Alberta
Western Canadian light- and mediumcrude production shows new life by Paul Wells
Average oil well output in Canada has jumped to 86 bbl/d from 60 bbl/d.
Canadian conventional light- and mediumcrude oil production appears to be reversing its decline and individual well deliverability is on the upswing as exploitation of oil from low-permeability reservoirs like the Bakken and the Cardium ramps up, says a veteran petroleum consultant. Robin Mann, chairman and CEO of AJM Petroleum Consultants Ltd., told the Dufour Energy Commodities seminar on April 14 that after being on the downward slide since the early 1970s, conventional crude oil output is holding steady and could even increase slightly. “From about 1973–74 within Canada, we’ve been on a decline of conventional oil with the major increases in oil production and reserves in western Canada being heavy oil,” Mann said. “But from about 2006 to 2007, there’s been a definite flattening and maybe even an uptick with respect to conventional oil, and this is due
to a number of companies going out and starting some horizontal drilling in some tight, oily reservoirs.” The Canadian Association of Petroleum Producers’ (CAPP) April crude report forecasts 2010 conventional light and heavy crude production at 564,000 barrels per day (bbl/d), much the same as last year’s output level. This flattening halts a slide that saw conventional oil production drop to 564,000 bbl/d last year from about 593,000 bbl/d in 2008. “The 2008 to 2009 decline is due to the natural reservoir decline. The increase from 2007 to 2008 is primarily from the Bakken,” said the CAPP VP of markets and oil sands Greg Stringham. “The 2010 [numbers] are very early in the year, so don’t represent the full year. However, given the level of oil drilling we’ve seen so far this year would suggest that oil will indeed recover.”
In March, the National Energy Board said it expects overall Canadian crude output to total 2.81 million barrels per day (MMbbl/d) this year, up from 2009 production of 2.73 MMbbl/d. However, the federal regulator expects output of conventional crude oil to decline about 0.4 per cent, to about 781,000 bbl/d. By contrast, production of synthetic crude from oilsands projects in Alberta will rise 11 per cent to 854,369 bbl/d. Mann also noted that individual well deliverability for light and medium oil is benefitting from horizontal drilling and multi-stage fracturing and has shown a “significant increase” over the past two years. He said that from 1999 to 2008, well deliverability has fallen from an average first 12-month production rate of about 80 bbl/d to about 60 bbl/d, but is now bouncing back. “Over the last couple of years, that average has gone up…mainly due to the increase in horizontal drilling in western Canada,” Mann said. “For 2009 the number actually is 86 bbl/d from a low of a little below 60 a couple of years ago.” Further, Mann said when he breaks 2009 light and medium crude well deliverability to output from vertical and horizontal wells, the impact of the newer technology becomes even more profound. “That average 86 bbl per day is made up of an average vertical production of 45 bbl per day and average horizontal production of 121 bbl/d,” he said. “Remember, this is 12-month averages. This isn’t just initial production that comes on for three hours that some companies report—this is what our analysis is for a 12-month average.” Mann noted that what has transpired in the light- and medium-crude space in western Canada the past few years is mimicking the game changer that has been witnessed on the natural gas side with the explosion in shale gas production. — DAILY OIL BULLETIN
SOUTHERN ALBERTA WELL ACTIVITY
APR/09
APR/10
WELL LICENCES
131
358
▲
APR/09
APR/10
WELLS SPUDDED
5
10
▲
APR/09
APR/10
WELLS DRILLED
4
10
▲
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • JUNE 2010
63
Southern Alberta
Revised PSAC forecast calls for 11,250 wells during 2010 For the second time this year, the Petroleum Services Association of Canada (PSAC) has raised its forecast for drilling activity. In a revised forecast issued on April 29, PSAC forecasts that operators will drill (rig release) 11,250 wells in Canada this year, a 35 per cent increase over the final total of 8,350 wells drilled in 2009. The number is up from PSAC’s initial forecast in November 2009 that 8,000 wells would be drilled in Canada this year and its January 2010 first-quarter update when it forecasted 9,000 wells. The latest forecast is based on average natural gas prices of $4.25 per thousand cubic feet at AECO and crude oil prices of US$82/bbl West Texas Intermediate PSAC attributed its more optimistic forecast to three main factors, including the increase in the price of oil, the anticipated royalty changes in Alberta, and the general boost in economic activity as the economy emerges from the global recession. “At worst, downsizing has flattened out for petroleum service and supply companies,” said PSAC president Roger Soucy.
Your #1 Source for Hard to Find Electrical Material
• Circuit Breakers • Motor Control • Industrial Lighting • Explosion Proof
• Transformers • Electrical Supplies • Contactors & Relays • Wire & Cable
5838-87A Street Edmonton AB T6E 5Z1
Ph: (780) 466-8078
Fax: (780) 468-1181 1-800-661-8892
Web: www.falvo.com Email: sales@falvo.com
WANTED
ELECTRICAL MATERIAL 64
JUNE 2010 • OIL & GAS INQUIRER
“And in pockets, companies are hiring people; pockets like pumping services and services related to shale development.” PSAC is forecasting that 7,590 wells will be drilled in Alberta, a 31 per cent increase over final 2009 drilling levels. British Columbia is pegged at 560 wells, a two per cent decrease in drilling from 2009, while in Saskatchewan the number of wells will soar to 2,580 wells drilled, a 47 per cent increase over the 1,750 wells
that commodity while reinvigorated crude oil drilling activity will not entirely make up for the shortfall. “We’ve kept our [forecast] kind of around that 10,100 [wells completed] range, and a lot of that is because of our bearishness on natural gas,” Mazar said. “Sure, we understand and are cognizant of the fact that crude activity has been driving activity, but we’re just a little skeptical about what the visibility is going forward post-breakup.”
The association forecasts 7,590 wells for Alberta this year. drilled in 2009. Manitoba activity is estimated at 475 wells, more than double the 230 wells drilled in 2009. However, Mike Mazar, a BMO Capital Markets service sector analyst, told PSAC’s mid-year update event that he’s less bullish. He told the industry crowd that although BMO is expecting total 2010 well completions in western Canada to increase from last year, depressed natural gas prices will continue to suppress drilling for
Mazar is less enthusiastic about 2010 activity levels than PSAC and some other analysts, but admitted to a pessimistic personal streak. “I’m the guy who reads the last chapter of a new book I just bought first, so that in case I die and don’t get to the end, at least I can figure out how it ends,” the analyst said. In his view, crude oil is reasonably valued in its current price range, but further increases upward are not in the cards. — DAILY OIL BULLETIN
Southern Alberta
Del Bonita oil play in southern Alberta gets compared to the Bakken Interest in the Del Bonita area along the Canada/U.S. border helped drive Alberta’s land sale on April 21, which drew total bonus revenue of $55.08 million at $790 per hectare (ha) on 69,718 ha. Thirteen lease parcels between 1-20W4 and 2-22W4 in the extreme southern part of the province drew over $18 million. O & G Resource Group Ltd. plunked down $2.84 million for a 2,560 ha lease parcel, which included several sections, at 1-21W4 at an average price of $1,110/ha. Daily Oil Bulletin records show that Connaught Oil & Gas Ltd. licensed a well in March in the Del Bonita area at surface location 14-7-1-21W4, with the Livingstone formation listed as the terminating zone and oil as the objective. C h r i s T h e a l , a n a n a l y s t w it h Macquarie Capital Markets Canada, said the interest in this area stems from drilling activity in Montana. “[Rosetta Resources Inc., Newfield Exploration Company, and Quicksilver Resources Inc.] are chasing what’s being called the Alberta Basin Bakken shale,” he said. “Rosetta’s got a few wells into it. One
of the wells is only two miles from the Canadian border.” According to Canadian Discovery Ltd., a geoscience information company, the historical exploration effort at Del Bonita has focused on oil in the Rundle Group and gas
on the Exshaw/Bakken formation and that there are indications of secondary resource play potential. Meanwhile, the land sale bonus high of $4.52 million was tendered by Plunkett Resources Ltd., which paid an average of
Indications point to significant discoveries in Montana and these postings appear to be a northwards extension. in the Bow Island and Fish Scales sandstones associated with Sweetgrass Arch tectonics. None of these plays have generated the momentum necessary to sustain an exploration effort, a report said. Recent drilling south of the border has, however, re-energized this area. Operators on the Blackfeet Reservation in Montana have been developing a play analogous to the Bakken in North Dakota. Initial indications point to “significant discoveries.” These postings appear to be the beginning of a northwards extension of this play. Canadian Discovery added that it appears the Del Bonita postings are primarily focused
ATCO Blast-Resistant Buildings Protect You
$2,211 for a 2,048 ha licence at 46-15W5. Standard Land Company Inc. produced the per-hectare high of $5,178 for two separate, 256 ha lease parcels. Each also generated identical bonuses of $1.33 million at 35-7W5 at sections 28 and 29. It included petroleum and natural gas below the base of the Cardium formation. Alberta’s land sale revenue has now climbed to $622.16 million in 2010 on 1.08 million hectares at an average of $574.11/ha. To the same point last year, the province had attracted just $73.22 million in bonus bids for 585,353 ha, which worked out to $125.10/ha. — DAILY OIL BULLETIN
Lo Tech® Manufacturing Inc. 7719 - 69 St, Edmonton, Alberta T6B 1V4
Reduce your risk operating in blast zones. Visit us at the Global Petroleum Show. Outdoor Booth #3333.
Drip pots Typical Specs: ❖ CRN - AB, BC, SASK ❖ 2” x 8”, 12”, 16” ❖ 2500 lbs Standard Service ❖ 1440 lbs Sour Service TOUJOURS LÀ POUR VOUS!
Office: (780) 440-5064 Fax: (780) 440-5172 www.lotech.ca
OIL & GAS INQUIRER • JUNE 2010
65
Southern Alberta
Contractor operating days increase by 38 per cent in Q1 All but three drilling contractors in Canada had more operating days in the first quarter of 2010 than a year ago when drilling was in a major slump due to low commodity prices and weak capital markets. Overall, Rig Locator records show 28,613 operating days booked by Canada’s drilling contractors for the three months ended March 31, 2010, up 38 per cent from 20,668 operating days for the same three months last year. The increase will partially offset the lower prices for drilling services in effect this year. Canada’s two largest contractors— Precision Drilling Trust and Ensign Energy Services Inc.—not surprisingly showed the largest increases in operating days. Precision surged by 1,927 days or 36 per cent to 7,346 days, while Ensign rose 39 per cent or 1,350 days to 4,778. After two years of increases due to a drop in shallow drilling and higher percentages of wells being horizontal, the number of days on average it took to drill a well in Canada declined in the first quarter to 9.34 days from 10.78 days a year earlier. The drop occurred only in Alberta and was most prominent west of the Fifth Meridian areas.
In Saskatchewan, it took on average 8.92 days to drill a well, up from 8.16 last year, while in British Columbia the drilling day count rose to 23.97 days per well from 22.42 days per well. The top-three drilling contractors for the first quarter of 2010 were the same three that have dominated for the past few years: Precision Drilling Trust with 1,053 wells
employed by Tundra Oil & Gas Partnership and finished 68,654 m of hole. Including 1,370 oilsands evaluation and test wells, Canada’s contractors drilled 5,004 wells and 6.5 million metres of hole in the first three months of 2010. Excluding oilsands evaluation and test wells, the well count was 3,634 wells and metres totalled 5.9 million.
Precision was far ahead of any other contractor in Alberta with 1.14 million metres drilled during the first quarter. and 1.58 million metres, Ensign Drilling Inc. with 909 wells and 1.08 million metres, and Savanna Energy Services Corp. with 723 wells and 766,232 metres of hole. Precision was far ahead of any other contractor in Alberta, with 1.14 million metres drilled and was slightly ahead of Ensign in Saskatchewan at 241,733 metres (m) versus Ensign’s 236,796 m. Nabors Drilling finished the most metres in British Columbia (157,941 m, much of them for Shell Canada Ltd.). Trinidad Drilling Ltd. was busiest in Manitoba, where it was
Fleet utilization was highest at Crusader Drilling Corp. (nearly 79 per cent on its single rig), Fox Drilling Inc. (77 per cent utilization), and Eagle Drilling Services Ltd. (76 per cent for its six rigs). As measured by average metres drilled per rig owned, Technicoil Corporation topped the list in the first quarter with 18,217 m drilled on average by its five rigs in Canada. Crusader and Eagle Drilling ranked second and third. Savanna rig #412 drilled the most wells (44) during the first quarter.
Health & Dental Plans
• Needle Valves • Manifold Valves • Pressure & Temperature Instruments • Accessories
1 - 50 Employees Single $88
Couple $177 Family $250
Call Gord • No Medical Questions for Groups of 3 or more • Plans Tailored to fit your employees & contractors (403) 703-4105
Toll Free 1.800.661.9039 www.gaugetech.ca
www.easycoverage.ca
Ph: 403 279-2828 Fax: 403 236-0677 GT_BCardAds 1 Email: radafab@telusplanet.net Website: www.radafab.com
THE RADAFAB ADVANTAGE! • Committed to supplying quality products which ensure long-term productivity • Outstanding service from conception to installation • Custom fabrication facility and in-house engineering department • Fabricating Excellence since 1982
66
JUNE 2010 • OIL & GAS INQUIRER
— DAILY OIL BULLETIN
PRESSURE VESSEL FABRICATION • Carbon Steel and Stainless Steel up to 8 ft in diameter and 40 ft in length • Dehydrators • Scrubbers • Separators • ABSA Certified Quality Control Program
PIPE SPOOL FABRICATION
STRAINERS • Basket Strainers, T Strainers, Y Type, Custom Fabrication with ‘A’ stamp • The original ‘Strainer People’
gENERAL MAChININg SERVICES UP TO 30” DIAMETER
5/11/10 10:37:43 AM
SPECTACLE BLINDS *IN STOCk BLEED RINgS *IN STOCk PIg LAUNChERS/RECEIVERS wITh ‘A’ STAMP Y LATERAL *CRN REgISTERED ORIFICE PLATES
NEw 10 TON OVERhEAD CRANE 10,000 SQ. FT FABRICATION FACILITY
ABSA REGISTERED
Case Study No. 12: Husky Energy Inc.
ÒÊInÊmyÊexperienceÊAbaDataÊisÊtheÊmostÊ intuitive,Êcomplete,ÊandÊeconomicalÊ applicationÊcurrentlyÊavailable.Ó – Kees de Waal, Husky Energy Inc.
HuskyÊAbaDataÊusersÊneededÊeasyÊaccessÊtoÊwell,ÊpipelineÊandÊfacilityÊ data,ÊcombinedÊwithÊanÊinterfaceÊtoÊcompleteÊcompanyÊinspectionÊforms. ;OL ZVS\[PVU& >L TVKPÄLK (IH+H[H ¶ V\Y WVW\SHY \ZLY MYPLUKS` Ê >LI IHZLK THWWPUN HUK KH[H HJJLZZ [VVS ;OL YLZ\S[& ( /\ZR` J\Z[VT (IH+H[H PU[LYMHJL HUK ;HZR 4HUHNLTLU[ TVK\SL MHJPSP[H[L X\PJR HJJLZZ [V KH[H MVYT \WSVHKPUN HUK YLWVY[ JYLH[PVU AndÊmoreÊimportantly,ÊweÊhaveÊmoreÊhappyÊusers.
To learn more visit www.abacusdatagraphics.com Abacus Datagraphics Ltd. Where Integrity and Innovation Coincide.
INNOVATIVE SOIL STABILIZATION SOLUTIONS for YEAR ROUND MUD FREE ACCESS
CARES Ltd.
(403) 262-2737 info@caresltd.ca
Reduce borrow pits by 50%, eliminate need for matting, reduce gravel required by 90%, use any insitu sand, silt or clay soils, improve construction safety and save money!
In The Field. On The Road. In The Office.
When talking back is a good thing… Fluid Logistics & Asset Management Booth #2028 at the GPS show
Head Office: Edmonton, Alberta, Canada | Titan Logix Corp. | Titan Logix USA Corp. 780.462.4085 | Toll Free 1.877.462.4085 | TSX-V: TLA Find us online at www.titanlogix.com | Email us at sales@titanlogix.com
TCA provides engineered steel containment solutions for the Western Canadian Oil and Gas Industry ENGINEERED CONTAINMENT ADVANTAGES • Professionally Installed • Cost Effective • Minimal Maintenance • Completely Reusable • Expandable WALL HEIGHTS INCLUDE • 12"
• 25"
• 45"
• 57"
• 33"
• Coming Soon 66" Custom site designs available
For a dealer in your area
1-866-TCA-7771
• Crossover Steps Available for all Wall Heights
Visit us at the Global Petroleum Show—Booth 3162
www.thecontainmentanswer.com 6404 – 53 Street, Taber, AB T1G 2A2 | p: 403.223.1113 | Fax: 403-223-6312
68
JUNE 2010 • OIL & GAS INQUIRER
Saskatchewan
Photo: Brian Zinchuk, Pipeline News
Saskatchewan’s $190.1M land sale is dominated by Bakken interest
Saskatchewan’s land sale revenue has rebounded this year with $229.58 million after two sales.
The Bakken light oil play continues to spark interest in Saskatchewan, helping the province take in $190.1 million in its April land sale. It was the second-highest total for an April land sale and interest in the southeastern part of the province was responsible for driving bonus revenue. Saskatchewan Energy and Resources Minister Bill Boyd said the auction “demonstrates increased interest and activity in our oilpatch in 2010 after a somewhat slower year in 2009.” Daily Oil Bulletin records show 656 wells drilled in the province to the end of March, up 64 per cent from only 303 wells one year earlier. T h e au c t i o n f e at u r e d 116 ,676 hectares (ha), which sold for an average of $1,629/ha. Last year’s April sale attracted $11.68 million on 34,155 ha, an average price of $342.20/ha. While the province expects industry interest to remain strong throughout
2010, revenues from upcoming sales are expected to be lower. Saskatchewan’s land sale revenue has rebounded this year with $229.58 million paid for rights to 212,836 ha after two sales, an average of $1,078. To the same point last year, the province had generated $17.94 million on 67,104 ha at an average of $267.39. “We don’t expect the interest to be as high as this in upcoming land sales, but with a rebounding industry and the other spinoffs from its exploration work, we are looking at a very exciting year ahead for our oilpatch,” Boyd said. The sale included 26 exploration licences that sold for $142.4 million and 286 lease parcels that attracted $47.7 million in bonus bids. The Weyburn-Estevan area received the most bids, drawing a bonus of $139 million. The highest price for a single parcel was $23.5 million, paid by Scott Land & Lease Ltd. for a 4,209
ha exploration licence near Oungre at 2-13 and 2-14W2, drawing an average of $5,584/ha. Neighbouring this, Windfall Resources Ltd. tendered a bonus of $16.23 million for a 3,083 ha licence at 2-14 and 2-15W2, which worked out to $5,267/ha. Bulletin records show that Crescent Point Energy Corp., an active Bakken producer, licensed two wells in the last few months in the Oungre area, both with the Bakken as the terminating zone. One is at surface location 4-2-2-13W2, the second at 1-3-2-13W2. The Kindersley-Kerrobert area produced the second-most bonus revenue at $25 million. The province is seeing greater interest on the west side of the province in the Viking formation. Top price paid for a single lease was $3.95 million by Windfall for a 647 ha parcel situated partially within the Avon Hill Viking Sand oil pool six kilometres northeast of Kindersley. The parcel included sections four, nine and the southern half of section 16 at 30-2W3. The broker paid an average of $6,103/hectare for the parcel. In the Swift Current area, the government took in $23.2 million. The top bonus for a single licence in this area was $12.31 million by Scott Land & Lease for a 2,851 ha block two kilometres south of the Rapdan South Upper Shaunavon oil pool, two kilometres southwest of Frontier. The parcel includes several sections at 3-19 W3 and 3-20W3. The licence produced a per-hectare average of $4,321. The Lloydminster area, meanwhile, brought in $2.9 million in bonus bids. The highest price on a per-hectare basis was $15,600. Canadian Coastal Resources Ltd. plunked down just over $1 million for the northwestern quarter of section 28 at 6-31W1, a 65 ha lease parcel near Redvers. — DAILY OIL BULLETIN
SASKATCHEWAN WELL ACTIVITY
APR/09
APR/10
WELL LICENCES
63
219
▲
APR/09
APR/10
WELLS SPUDDED
3
40
▲
APR/09
APR/10
WELLS DRILLED
3
38
▲
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • JUNE 2010
69
Saskatchewan
Stealth signs a joint-venture deal for the Colorado Shales Stealth Ventures Ltd. says it has signed a joint venture with MOI Resources Ltd., a Saskatchewan-based, private oil and gas company looking to expand into the Colorado Group of Shales resource play. “We’re excited to be entering into a partnership with Stealth and see a lot of potential in the Colorado. It’s a good time to be entering into the gas markets, as we probably wouldn’t have had this chance if gas was $10 per Mcf [thousand cubic feet],” said MOI Resources CEO Kerwin Mondor. The Cretaceous Colorado group in the Western Canadian Sedimentary Basin is represented almost continuously in a 1,000 kilometres east-west profile. Of the over 250,000 wellbores that penetrate the Colorado, most have been drilled to target deeper horizons. Derek Krivak, president and CEO of Stealth, said there is more potential than his company would ever be able to manage on its own, “so we’re excited to be expanding our efforts with MOI.” Further to Stealth’s initial downspacing approval by the Alberta Energy Resources Exclusive Authorized Distributor
Shale exploration is reaching parts of Saskatchewan previously unaffected by upstream oil and gas.
Conservation Board to proceed with eight wells per section on two sections of land in the Wildmere area, the company has added an additional 17 sections, bringing the total sections to 19, which are available for eight wells per section drainage on Stealth lands. Fekete Associates Inc. completed extensive rate transient analysis on location 15-10-50-06W4, which had over two years of production data and showed ultimate well density will approach 18
wells per section (36 acre spacing) to ultimately drain the resource before interference is found. An additional 11 sections are currently awaiting decision by the board with the remaining Stealth acreage (more than 80 gross sections) in process with Fekete. With full-spacing approval, Stealth will have hundreds of locations available to the company for development. — DAILY OIL BULLETING
Visit www.oilpro.ab.ca Equipment catalogue updates every 6 min.
ISO 9001-2000 CERTIFIED
BELZONA WESTERN LTD CALGARY, ALBERTA CANADA
PH: 403-225-0474 FAX: 403-278-8898 WEB SITE: www.belzona.ca E-MAIL: belzona1@telus.net
✔ Treaters ✔ Lineheaters (sizing
help available)
✔ Arrow engines, gensets and fuel gas scrubbers/volume bottles
storage bullets, 12,000 – 60,000 USWG
✔ Dehydrators ✔ Tanks: single/double,
✔ Gas plants: sweetening/choke/ mech. refrigeration
50, 100, 210, 400, 750, 1,000 and 1,500
✔ Low and high
Contact us for advice on Belzona Know How Solutions and Procedures.
✔ Free water knockouts
JUNE 2010 • OIL & GAS INQUIRER
✔ Propane/butane
help available)
Belzona Polymeric Coatings combat erosion, corrosion and abrasion in high temperature immersed conditions. Rebuild and line tanks, process vessels and plant equipment.
-180˚ C Immersion Temperatures -Safe VOC Free Formulations -Brushable or Sprayable -Resists Rapid Decompressions -Belzona 1111 – 1311 -1391 – 1521 – 1591 -Amine Tower – Strippers -Exchangers – Chemical Tanks -Flare Knock Out Drums -Oil – Gas Separators -Outstanding Cavitation Resistance -Pressure Resistant
70
✔ Pumpjacks (sizing
pressure separators
✔ Compressors
✔ Tank heating
✔ FKO drums and flarestacks
(boosters: recip. and screw units)
systems (HotRod, Envirovault, Firetubes, etc.)
✔ Innopipe drips: liquids
New pricing in effect Looking for good quality surplus equipment OILF
removal downstream of compressors, dehys, amine units, or in transmission lines
I EL D PR O D U C T I O N
EQ UIPM ENT
OilPro Oilfield Production Equipment Ltd. 403·215·3373
Fax:
403·216·1571
Toll Free:
888·4·OilPro
Saskatchewan
Ryland Oil Corporation advises that its wholly owned subsidiary, Pebble Petroleum Inc., has entered into a new farmout agreement with Crescent Point Energy Corp. Under the agreement, Crescent Point has agreed to spud a test well by June 30, subject to rig availability, surface access, and regulatory approval, at a location of its choice on a three-section lease in the Flat Lake area of southeastern Saskatchewan acquired by Pebble in November 2009. The test well, which has been licensed, will be a horizontal well which will test the Bakken formation. Crescent Point must pay 100 per cent of the costs to drill, complete and equip or abandon the test well to earn a 50 per cent working interest in the three sections comprising the lease as well as an additional 11 net sections of Ryland leasehold acreage. If any wells are subsequently drilled on acreage in which Crescent Point has earned its 50 per cent working interest, each of Pebble and Crescent Point will be responsible for payment of 50 per cent of the costs of such wells and hold a 50 per cent working interest, subject to the provi-
Photo: Brian Zinchuk, Pipeline News
Ryland announces a new farmout deal with Crescent Point
Ryland now has four farmouts with Crescent Point.
sions of the operating agreement between the parties. Crescent Point will be the operator of the test well and the initial operator of all post-earning wells. This is the fourth farmout agreement between Ryland/Pebble and Crescent Point, the first three having been entered by Pebble with TriAxon Resources prior to TriAxon’s acquisition by Crescent Point. Under the other agreements, Crescent Point has the right to earn a 50 per cent working interest in and to a total of approximately 81 sections of Pebble acreage in the Flat Lake area by drilling a total of eight wells. The earnin under those agreements is limited to the Bakken formation only. Drilling is ongoing. Vancouver-based Ryland owns Crown leases and licences in southeastern Saskatchewan covering approximately 300,000 net acres along an 85-mile trend extending into the northwestern U.S., where the company owns an additional 12,184 net acres (20,647 gross acres). The Saskatchewan properties are held by Ryland's Canadian subsidiary, Pebble Petroleum. — DAILY OIL BULLETIN
PROUDLY SERVING THE OIL & GAS INDUSTRY SINCE 1985
Having a Hard time finding replacement parts for your Heat excHangers? Joule Technical SaleS inc. offers spare parts and complete replacement units for all major brands.
Provider of
Drilling & Production Services
1-866-96-STRAD (78723) | www.stradenergy.com
10-105-0185_StradJWarrenPrintAd.indd 1
TOLL FREE : 1.800.461.2788 TEL : 403.239.3477 FAX : 403.241.0148
sales@joule.ca OIL & GAS INQUIRER • JUNE 2010
16/04/10 10:53 AM
71
Saskatchewan
Renegade repositions for Saskatchewan growth Renegade Petroleum Ltd plans to spend $42 million to $44 million focused on development drilling, land sales, facilities expansion, and seismic work this year. About 75 per cent of that spending will be in southeastern Saskatchewan, predominantly on the Bakken play. The remainder of the capital expenditure program is anticipated to target the Viking play in the Dodsland pool in western Saskatchewan. Renegade said its program is expected to result in 2010 exit production of 1,800 to 1,900 barrels of oil equivalent per day (boe/d) that will be weighted approximately 95 per cent to light crude oil. Average output for the year is forecasted to generate approximately $19 million to $20 million of funds from operations using estimated prices for crude oil of $75 per
barrel West Texas Intermediate and $4 per gigajoule at AECO for natural gas. During the first quarter of 2010, Renegade participated in four gross (two net) Viking wells in the Dodsland pool and drilled two gross (1.5 net) wells in its Hastings/Alameda core area in southeastern Saskatchewan, all with 100 per cent success. In March 2010, Renegade (formerly Colonia Energy Corp.) completed an acquisition of a private company with assets based in the heart of the Dodsland Viking pool, which established an additional high-growth core area in Saskatchewan for the company. Production fell a bit last year, to 145 boe/d from 161 boe/d in 2008, while profit sank. The company reorganized itself in the fourth quarter of 2009. As a result of
the acquisition of Duce Oil Ltd. and its working interest partners for approximately $35 million as well as raising more than $46 million in equity, Renegade has positioned itself as a high-growth, light oil, Saskatchewan-based producer. As of Dec. 31, 2009, Renegade’s gross proved-plus-probable reser ves base was 371,000 boe. Light and medium oil accounted for 76 per cent of the provedplus-probable reserves base. Renegade’s gross proved reserves base was 194,000 boe. Proved reserves represent 53 per cent of the total proved-plus-probable reserves. Proved producing reserves represent 38 per cent of the total proved reserves base. Light and medium oil accounted for 95 per cent of the total proved reserves base. — DAILY OIL BULLETIN
W. Claire signs letter of intent for solution gas project W. Claire Energy Corp. has signed a letter of intent with PetroBakken to implement a field demonstration of the privately held company’s proprietary process for the capture and monetization of the liquids-rich gas. W. Claire will provide the equipment and PetroBakken will provide access to the wellsite. With operation scheduled to begin this summer, W. Claire plans to capture and compress solution gas that PetroBakken Energy Ltd. is currently flaring at one of its light oil wellsites in the Estevan area of southeastern Saskatchewan. Typically, the solution produced at oil wells and oil batteries is not tied into gathering systems. While the oil is being trucked to market, there is no way to handle the gas. “We are compressing the gas, dehydrating it, and putting it into a container, where it can be transported from the wellsite to one of PetroBakken’s compressor stations where we will unload the container downstream of the compressor,” said Greg Loewen, president and CEO of W. Claire. “It’s just like trucking oil.” The container will hold about 150,000 cubic feet of gas, about a day’s production of solution gas from the well, he said. Once the project is operational, producers will be charged a fee that will consist of a monthly flat fee in addition to a charge based on the volume of gas transported. The fees will enable W. Claire to 72
JUNE 2010 • OIL & GAS INQUIRER
achieve a reasonable rate of return, while also providing an opportunity for the producer to generate revenue for themselves. “They are essentially getting nothing for the gas now, so what we are trying to do is generate a new revenue stream for them,” Loewen said. The solution gas will generate a significant revenue stream even with low natural gas prices because of the heavier hydrocarbons including propane, butane, and pentane. “That’s what’s really driving the economics of trying to conserve solution gas, especially in southeast Saskatchewan because of the high liquids content,” said
demonstration project, enabling W. Claire to provide a total well-optimization solution, said Loewen. Through Big Gas, it also has access to local technical staff who will service and maintain its equipment. Once the final agreement is in place and the design is finalized, the actual startup date will depend on order lead times for the equipment, he said. The company currently is in the middle of financing to raise money for the project and once it has the money, it will order the equipment. W. Claire also has been trying to implement its technology overseas and has had a fair amount of interest but believed it was
W. Claire plans to capture and compress solution gas that PetroBakken Energy Ltd. is currently flaring at a light oil wellsite near Estevan. Loewen. “This wouldn’t work as well or maybe wouldn’t even be economic in the Lloydminster [heavy oil] area.” While there are other areas of Alberta where capturing solution gas might work, W. Claire initially targeted southeastern Saskatchewan because of the high level of oil activity, he said. The company has been working on its solution gas capture project for the past 18 months, and with PetroBakken for the past two months. Calgary-based Big Gas Compression will supply the compression for the
important to get a project up and running in Canada. “It’s easier for people to see and it’s easier for the investors to get their heads wrapped around it,” Loewen said. W. Claire estimates that 15 billion cubic feet of solution gas from oil wells is being burned every day around the world. The company says that its technology will allow producers to conserve solution gas from new oil wells from early on in the production cycle, while reducing the greenhouse gas effect of flared gas. — DAILY OIL BULLETIN
Don't leave our tiniest players shorthanded. 3-on-3 CE Franklin Challenge
Saturday, September 11, 2010 Don Hartman North East Sportsplex Sponsor your team today by calling 403-943-0611 or 403-943-0698 or visit www.thetrust.ca/cefranklin.
Tournament proceeds will help support state-of-the-art equipment for Neonatal Intensive Care Units (NICU) at Foothills Medical Centre, Rockyview General Hospital and Peter Lougheed Centre. The NICU provides specialized, high-level care to sick and premature newborns.
TANK GAUGING SYSTEMS
TGS-5012 SOUR (Glycol Filled) • Glycol filled to prevent freezing • Add magnetically activated switches
0.1
0.1
0.2
0.2
0.3
0.3 0.4
0.4
0.5
0.5 TGS 780-474-2365
0.6
0.6
0.7
0.7
TGS-5010 SOUR PULLEY SYSTEM • Grease-sealed pulley • Large indicator & signboard • Add point switch • Tank-in-service installation
0.8
0.8 5.4
5.4
5.5
5.5 5.6
5.6
5.7
5.7 5.8
5.8
TGS
TGS
DNB ELECTROMECHANICAL - 4-20mA • Tank-in-service installations • Field calibrated • Sweet and sour service • CSA Class 1, Div 1 EX
TGS-5020 SOUR/6020 SWEET SERVICE • Coned roof float prevents build-up • Simple installation • Excellent for retrofit applications • Tank internals: stainless steel, teflon fibreglass • Magnetically activated switches • 4-20mA electronic output (optional) • Pneumatic output (optional)
-6 -5 -4 -3 -2 -1
Custom solutions…
-6 -5 -4 -3 -2 -1
From a custom manufacturer.
PROFIRE 1100 IGNITION & FLAME SAFETY CONTROLLER • Dual flame-sensing modes • 4-second flame shutdown response • RS-485 mod-bus communication • Compliant to CSA 149.3 regulations • CSA approved Class 1, Div 2 locations
Phone: (403) 227-7799 Fax: (403) 227 -7796 E -Mail: sales@bilton.ca W ebsite: www.bilton.ca
Edmonton: 780.474.2365 Calgary: 403.685.8867
Crude Oil • Water • Acid • Condensate Fluid Transfer • Recycle Pumps • Skim Pumps
Call us in Consort
PRESSURE VESSELS BY
Level Burner
1-888-227-4923
for the dealer nearest you:
(403) 577-3825 or visit our website at
www.tepumps.com Brooks, Calgary, Drayton Valley, Edmonton, Edson, Estevan, Fort St. John, Grande Prairie, High Prairie, Hinton, Kenaston, Lloydminster, Medicine Hat, Meota, Paradise Hill, Peace River, Red Deer, Spruce Grove, Strathmore, Sunnybrook, Swift Current, Taber, Wabasca and Westlock E-mail: tyler@tepumps.com Fax: (403) 577-3813
74
JUNE 2010 • OIL & GAS INQUIRER
Over 11,000 Vessels Built to Date • Separators • Dehydrators • Treaters • FWKOs • Scrubbers • Swab Vessels • Line Heaters • Steam Splitters • Coil Rolling • Drip Pots • External Level Cages • Filter Vessels
5715-56 Avenue, Edmonton, Alberta p: 780.434.0222 | f: 780.436.1467 | e: info@penfabco.com
www.penfabco.com
Northern Frontier
Deepwater Horizon blowout will impact Beaufort Sea drilling review
Photo: Maurice Smith, New Technology Magazine
by James Mahony
The requirement that Beaufort explorers be able to drill a timely relief well was revived in 2009.
In its scheduled review of drilling regulations in the Beaufort Sea, the National Energy Board (NEB) will take into account any lessons learned from the disastrous loss of a semi-submersible drilling rig in the Gulf of Mexico and the ensuing crude spill loss. Bruce March, CEO of Imperial Oil Limited, stressed at his company’s annual meeting that the Beaufort and Gulf are very different operating arenas. On April 20, the Deepwater Horizon rig operated by Transocean Ltd. ignited and sank, killing 11 and creating a wild well that released an estimated 5,000 barrels per day of crude oil. In a letter dated April 28, the NEB gave notice to all interested parties in the Beaufort that it plans to question the parties about that incident. “In the Beaufort Sea, drilling conditions as well as the timeframe available [for a relief well] to be drilled are quite different,” March said after the company’s annual meeting in Calgary on April 29. “We’re not looking at year-round activity in the Beaufort. We’re looking at two to three months. There has been discussion about same-season relief well capability ever since Beaufort exploration started
in the 1970s and ’80s. There’s no written policy on that today.” The requirement that companies drilling in the Beaufort be able to drill a timely relief well was revived in October 2009, when Imperial asked the NEB for an advance ruling on the company’s approach to same-season relief well capability. At that point, the NEB decided to formally review its policy in a written hearing. March said Imperial and others could benefit from the findings of the current U.S. investigation into the Gulf of Mexico incident. “We think it would be the kind of thing we should [include in] the lessons learned from that, and then sit down with the NEB in terms of what the policy would be up in the Beaufort,” he told reporters. Other producers active in the region have also asked to participate in the NEB hearing. The list includes Chevron Canada Limited, BP Exploration Operating Company, ConocoPhillips Canada Resources Corp., and MGM Energy Corp. The hearing has also attracted interest from those living in the Beaufort region, including the Inuvialuit Game Council, the Inuvialuit Land Administration (ILA), and the Tuktoyaktuk
Hunters and Trappers Committee, all of which have filed documents with the board. In its filings, the ILA has suggested the NEB’s review of same-season relief well policy should examine not only that issue, but the broader question of preventing and remediating any uncontrolled release of hydrocarbons in the Beaufort. Like other aboriginal groups that have filed letters, the ILA underscored the importance of hunting and fishing for Beaufort-area residents. The Northwest Territories government will also participate in the board’s policy review. The only non-Canadian participant will be the U.S. Minerals Management Service (Alaska region), a branch of the U.S. federal government that has asked to participate. (The U.S. and Canadian governments differ about where the border lies in the Beaufort Sea.) At its annual meeting, Imperial broadly outlined plans to spend some $20 billion in Canada over the next five years. March said any funds allocated to the Mackenzie Valley Gas pipeline project would be “very modest.” Regulatory approval of that project has been delayed repeatedly since the 1970s. The $20-billion program includes both phases of Imperial’s Kearl oilsands project, currently about 25 per cent complete, and further capital for Nabiye, the expansion of its Cold Lake heavy oil facility. The figure also includes “significant” sustaining capital for Syncrude Canada Ltd., including the opening of the facility’s south mine, March said. “We’ve heard some expressions of contractor-manpower tightening [in the oilsands], but we’re a long ways from where this industry was two or three years ago. We’re not even close,” March said. “When Shell Canada finishes their work this year, Kearl will be the only big project going in the oilsands.” In northeastern British Columbia, Imperial has been active in the Horn River Basin, and March voiced satisfaction over the company’s recently completed winter drilling program, which saw 11 wells drilled, including two horizontal. “We’re still testing [the wells], but early returns are very, very promising,” he said. — DAILY OIL BULLETIN OIL & GAS INQUIRER • JUNE 2010
75
Vertigo Theatre thanks its corporate partner
Vertigo Mystery Theatre Season Sponsor
In our business, you need a good accomplice
“Captivate a new audience!”
Unique sponsorship opportunities are available contact Development at (403) 260-4759
CAUGHT IN THE ACT “GET www.vertigotheatre.com ”
isn’t it time for a brush up? CLIENT: Prostate Cancer Canada JOB:PCC F D W R DATE: March 15, 2010 PUB INSERTION: May 2010
SIZE: 3.43 x 4.62 in (1/4) COLOUR: CMYK FINAL OUTPUT : ARTIST:Glenn, pix@istar .ca
whether you’re just starting your journey in the oil and gas industry, or a Veteran looking for a refresher
expand your oil and gas knowledge with our training courses oilpatch101.com oilsands101.com Oilpatch 101 is a non-technical business fundamentals course for anybody operating in, or in support of, Canada’s oil and gas industry.
Visit our online sites for available dates, course outlines, and to register.
Oilsands 101 provides a detailed and comprehensive introduction to the Canadian unconventional oil industry.
the most trusted source for energy information in canada
76
JUNE 2010 • OIL & GAS INQUIRER
Central Canada
A hopeful Quebec gets ready to produce "gaz naturel"
Photo: Questerre Energy Corp.
by Lynda Harrison
Quebec’s government offers most generous royalty rate in North America to natural gas producers.
The stars appear to be aligning nicely for a natural gas industry in Quebec, according to the president of the Quebec Oil and Gas Association (QOGA). André Caillé has previously headed up both the Crown power utility Hydro-Quebec and Gaz Metropolitain, the province’s natural gas distribution utility. “Quebec is changing. It’s going to be a fossil fuel producer now,” Caillé says. The breakthrough well that excites Caillé was St. Edouard #1A, drilled in February by Talisman Energy Inc. in the Utica shale gas play. The well, which produced more than 12 million cubic feet (Mcf) per day, was the fourth and final one under a farm-in by Talisman on lands owned by Questerre Energy Corporation. “The well is commercial. Not at this week’s price, but at $4 or $5 we can produce commercial gas. We are very, very much encouraged by the fact the gas is there,” Caillé says. “There’s no doubt about that.” He thinks the province can produce gas commercially when the commodity price is $4 at the Alberta border. “Before the gas gets out of the ground here, it’s already worth $1 an Mcf because there’s
no transportation cost associated with it from Empress to Montreal.” The QOGA, formed in April 2009 with about 30 member companies, held its first conference last fall. Attendance of nearly 300 people was higher and from further afield—as far away as Europe and Australia—than expected. A second meeting is planned for October 2010. The Quebec government expects to table specific legislation for oil and gas, currently covered in mining legislation, in the National Assembly in September. Recently, the association successfully lobbied the provincial government to keep royalty rates at 10 per cent to 12.5 per cent, possibly the lowest in North America. A task force is working on “one-window shopping” for regulatory permitting, in the hopes that a prompt regulatory process will enable the province to compete with Alberta and British Columbia for investment. Increased investment will encourage more drilling, which currently stands at about 10 wells per year with costs as much as $10 million per well. The QOGA is working to reduce that to $5 million per well. Another QOGA objective is to see
service companies develop in Quebec, but for the short term Caillé and other industry players expect to get rigs from western Canada and Pennsylvania, incurring large mobilization costs. Quebec currently consumes about 200 billion cubic feet of gas per year, accounting for 12 per cent of its overall energy demand. GazMet says when producers are ready, it will be ready. Marie-Noelle Cano, a GazMet spokeswoman, says increased sales will come from new residential construction, with one in five homes being equipped with gas-fired heating. Caillé estimates that increased gas consumption at the expense of competing fuels will lower carbon dioxide emissions by five or six per cent. Quebecers also know that gas’s environmental footprint is smaller than any other fuel sources, he notes. “A wellhead is nothing compared to an electrical [dam],” he says. The province has no shortage of willing workers. “I cannot remember another industry that has proposed to create as many jobs in the region between Quebec City and Montreal,” says Caillé. “These are electricians, pipefitters, people that are looking for jobs now, and by Quebec standards these are well-paid jobs. Many young people will be able to earn their living in the village where they were born.” QOGA is working with a local college, Cégep de Thetford, to provide a training program for potential rig workers that could start as early as next year. “We need these people tomorrow,” said Caillé. The province could certainly use the influx of cash a gas industry would supply. Le Soleil newspaper columnist Pierre Couture estimated gas royalties collected by Quebec could some day exceed $1 billion per year. According to Couture, the government is “desperately” seeking new revenue to balance its budget and to do that, the province will need an additional $5 billion in the next three years. “The discovery of a significant natural gas deposit in Quebec will forever change the face of public finances in the province,” wrote the newspaper. — DAILY OIL BULLETIN OIL & GAS INQUIRER • JUNE 2010
77
Servicing the Oilfield Industry
Experience the next Generation of oil & Gas traininG
Dedicated to Supplying Custom Packaged Equipment, Pressure Vessels and Piping for: • Oil/Gas Production • Oilsands, SAGD • Heavy Oil Processing • Refinery Operations • Domestic and International Projects Stock Packages Available Including: • Separators 24" - 72" • Dehydrators 16" - 36" • Line Heaters Weld Overlay, Clad and Solid Alloy Fabrication Including: • Stainless Steel • Nickel-Based Alloys such as 200, 400, 600, 625, 825, C276 and C22
RegisteR now!
Next two-day course runs June 23 - 24, 2010
Our Facility Allows For: • 32' Under Hook • 120-Ton Lifting Capacity • Bay Sizes for Vessels and Packages to 26'W x 150'L • Excellent High Load Corridor Access For information contact:
oilpatchex.com
Opsco Manufacturing A Division of Ensign Energy Services Inc. 285175 Kleysen Way SE, RR #55 Calgary, AB T2P 2G6
Tel: 403.272.2206 Fax: 403.273.0377 RFQs: opscomfg.rfq@ensignenergy.com Web: www.opscoenergy.com
“Performance Excellence – Second to None”
No matter what the print requirement, we always strive to exceed our customers’ expectations.
We offer award-winning print communications to help our customers succeed. PrintWest is known for our quality and ability to get the job done and delivered on time and on budget.
Francis Lefaivre | National Sales Director | email: f.lefaivre@printwest.com direct: 403.516.3487 mobile: 403.463.0962 toll-free: 1.800.387.2446 ext 3487
78
JUNE 2010 • OIL & GAS INQUIRER
www.printwest.com
East Coast
ExxonMobil and Encana trigger offshore optimism in Nova Scotia
Photo: Encana Corporation
by Pat Roche
These ships are transporting elements of Encana’s Deep Panuke gas project offshore Nova Scotia.
Only a few years ago, Nova Scotia’s offshore faced a bleak future. Output from the Sable natural gas project was declining and the only other discovery slated for development—the Deep Panuke gas project—was on hold. Now the outlook is decidedly brighter, largely thanks to a new evaluation by ExxonMobil Canada of old discoveries near its Sable Island project. Construction of the Deep Panuke production facilities is to be completed this year and the roughly $800-million project is expected to be onstream in the first half of 2011. The operator, Encana Corporation, has drilled a disposal well and is currently re-completing the first of four production wells. The project has a design capacity of 300 million cubic feet (MMcf) a day, but the start-up rate from the four initial production wells will be roughly 200 MMcf/d, the company said. Work is under way at Goldboro, N.S., to install three kilometres of onshore pipeline to connect the offshore pipeline installed last year with the Maritimes & Northeast Pipeline system. Meanwhile, E x xon Mobil Canada has been evaluating unspecified old
discoveries near the Sable Island project for more than a year to determine if one or more of the offshore prospects may be economic to develop. The Sable Offshore Energy Project now includes six gas fields—Thebaud, Venture, North Triumph, South Venture, A lma, and Glenelg—near Sable Island. Partners in the Sable project are ExxonMobil, Imperial Oil Resources, Shell Canada Energy, Pengrowth Corporation, and Mosbacher Operating Ltd. Ownership percentages vary with each licence. The eastern Sable Island Bank area includes undeveloped gas discoveries which are under various ownership arrangements. ExxonMobil and its partners are “considering the feasibility of bringing in additional gas supplies to the [Sable project] from some undeveloped fields—including Glenelg and Citnalta—and potentially from additional prospects in the same general vicinity as these fields and flowline route corridors,” the company said in an environmental filing for a planned seabed survey. The seabed survey would help identify hazards at potential wellsite locations and pipeline routes. Hazards could include
shallow gas, steep or unstable substrates, and seabed obstructions. Activities would include sonar scans, underwater videography, sediment sampling, and core sampling at each potential wellsite and along potential flowline routes. Two-dimensional seismic data will be acquired within areas of roughly one square kilometre at each wellsite as part of the seabed survey. The entire survey, including the small seismic acquisition, is expected to take one to two months, and ExxonMobil hopes to complete the work this year. Other details haven’t been disclosed, such as the full list of discoveries being evaluated and the number and location of potential wellsites and flowline routes. “We have said we are evaluating ‘several’ SDLs [significant discovery licences] to determine whether one or more may be economic to develop,” said Merle MacIsaac, an ExxonMobil spokesman in Halifax. “We haven’t quantified the size of any potential SDL development, nor have we quantified the resources we are dedicating to the evaluation.” Recent Sable production, which has fluctuated with downtime for maintenance and enhancements, such as compression addition, typically has been in the 350–400 MMcf/d range. ExxonMobil Canada, as the operator, isn’t saying when the 10-year-old project would shut down if no additional gas comes onstream. ExxonMobil is “looking at ways and technologies that could make the SDLs economic,” Glenn Scott, president of ExxonMobil Canada, said in a speech to a Nova Scotia oil and gas group in Halifax last year. But he cautioned: “It remains to be seen if SDL development is warranted.” Operations and maintenance spending on the Sable project exceeds $150 million in a typical year. Still, just the fact that the operator is looking at extending the life of Nova Scotia’s only producing offshore project is reason for optimism. Nova Scotia waters hosted Canada’s first offshore oil project, Cohasset-Panuke, which produced from 1992 through 1999. — DAILY OIL BULLETIN OIL & GAS INQUIRER • JUNE 2010
79
MCI SOLUTIONS SOLAR CHEMICAL INJECTION PUMPS
30TH
ANNIVERSARY EDITION Available June 2010 OVER 70,000 COPIES DELIVERED ACROSS THE WESTERN CANADIAN SEDIMENTARY BASIN! Visit our booth at the Global Petroleum Show and pick up your new directory! June 8-10, 2010 Stampede Park, Calgary, Alberta Or visit us at cossd.com or call to order your complimentary* copy today!
CELEBRATING
30 YEARS OF
• Eliminate chemical over-injection due to variable line pressure. • Accurately meter chemicals to ensure zero waste between 0.12 – 59.1 L/day. • Maximize chemical dispersion at low volumes with the duty cycle nearing a constant rate. • Reduce commissioning and maintenance with our variable speed controlled brushless motor: no electrical contactors, no timers and no dip switches. • No more vented drive gas, compression packing, chemical leaking or drive stalling. • Pump sold separately or in packages including: Component System, Standard Skid (no tank), 100 & 300 Gallon skids. • Use the MCI Pump with the optional Solar Power Package or standalone with site power.
(Calgary) 1 800 387 2446 (Edmonton) 1 800 563 2946
BUSINESS
Certified Packages: Class 1/ Division 1 & Class 1/ Division 2
*Shipping charges not included
8540 Old Fort Road SS2, Site 26, Comp. 2 Fort St. John, BC V1J 4M7
Phone: 250.263.0977 Fax: 250.263.0978
THE BUYER’S GUIDE FOR THE CANADIAN OIL & GAS INDUSTRY
chris@mcisolutions.ca www.mcisolutions.ca
responding now to global challenges
one of the high-level international multi-energy gatherings of 2010, after g8/g20 and before coP16.
Energy in transition for a living planet®
Premier World EnErgy EvEnt 3,500 leaders from all EnErgy sEctors 300 EXHIBItors | 5,000 vIsItors over 200 sEssIons and EvEnts
r egister now at >>>wecmontreal2010.ca
XXIst World Energy Congress September 12 to 16
Hosted by
Exhibit managed and sold by
® "LIVING PLANET" is a WWF trade mark and is used with permission. Sponsored by
GDF SUEZ Logotype version Pantone 11/07/2008 82, bd des Batignolles - 75017 Paris - FRANCE Tél. : +33 (0)1 53 42 35 35 / Fax : +33 (0)1 42 94 06 78 Web : www.carrenoir.com
RÉFÉRENCES COULEUR
PANTONE 425 C
PANTONE 3285 C
10167_WEC_NTM-OGI-OIR_OIM_180x118-1_0.indd 1
80
JUNE 2010 • OIL & GAS INQUIRER
CLIENT
WEC
10-05-06 16:30 ÉPREUVE
International
Controversial geologist pans U.S. shale gas plays as likely losers by Pat Roche
Arthur Berman says shale plays are economically vulnerable to rapid decline rates and low gas prices.
Consultant Arthur Berman, a former Amoco geologist and an associate editor of the American Association of Petroleum Geologists Bulletin, has controversial views on the likely rate of production decline in shale gas wells. Last November, for example, World Oil refused to run one of his columns. On April 13, Berman was in Calgary, speaking to a large meeting sponsored by Packers Plus Energy Services Inc. His Calgary presentation dealt strictly with U.S. shales. Berman says American reserve estimates are overstated by at least 25 per cent, while costs are grossly understated. “Unfortunately, based on what I’ve seen so far, they require peak market conditions to be commercial. Those peak market conditions have only existed for 18 months out of the last 15 years,” Berman states. “Companies that bet everything on shale plays…are going to have a significant competitive disadvantage throughout 80 per cent of the price cycle.” Even so, in his judgement, shale gas plays are working for producers that are approaching them correctly. “And so I’m not against the plays,” Berman stresses. “What I am against is the sort
of one-size-fits-all approach to choosing locations, to deciding where to buy land, how to drill, and particularly how to drill and complete these wells.” He believes sha le gas plays are fraught with risk because no one knows how the wells will perform over many years. “We know very, very little about these plays that we’re spending so much time, energy, and money on.” Berman says. “We make some assumptions, mostly about decline rates…and that’s the basis for our enthusiasm.” Beyond its implications for industry, this is important because public policy issues are being decided in the United States, Canada, and even Europe based on the assumption that there is maybe a 100year supply of cheap gas, Berman says. “If that’s not true, then we have a problem.” In the United States, companies often acquired hundreds of thousands of acres on very short-term exploration leases. “We get the leases and we announce success. We haven’t drilled any wells, but we know that the Barnett is supposed to have 30 [trillion cubic feet] of gas and my company has X per cent, and therefore, we publish
these resources,” Berman charges, referring to much of the industry. Because of looming lease expiries, companies were initially drilling to hold land, not where their scientists told them to drill. “And in the Barnett [a Texas shale play]—12,000 wells later and probably $35 [billion] or $40 billion—we find the sweet spot by the Braille method,” Berman says. In the Barnett, on average, the geologist estimates that 75 per cent of the estimated ultimate recovery (EUR) is achieved in the first five years. He focuses heavily on the Barnett because it is the only shale play with hundreds of wells that have produced for five or six years. “We’ve looked at about 2,000 wells and we see about 1.25 Bcf [of EUR per Barnett well] as being the most likely case. You need about 1.5 Bcf to break even [even if gas prices were almost double current levels],” Berman claims. That analysis is criticized because much of Berman’s production assessment comes from older wells, and newer wells are potentially more productive because technology constantly improves. “I believe that we are getting better in certain areas of the play,” the consultant says, but overall “the second half of 2008 was the worst…for EURs in the Barnett shale, ever.” Berman calculates that the Fayetteville and Haynesville shale plays appear to suffer from similar difficulties as the Barnett. “Twelve per cent of the wells that I’ve looked at [in the Haynesville play] will reach that economic threshold,” he says. “So this is kind of a development scenario where your failure rate is 90 per cent.” The consultant feels shale gas plays in the United States are being approached with a gold-rush mentality that “almost ensures the victory of expediency over any kind of science, technology, or portfolio management. These plays make absolutely no sense at current gas prices. And the way that operators are drilling like mad—at least in the U.S.—ensures that the prices are going to stay low and we’re going to destroy more capital.” — DAILY OIL BULLETIN OIL & GAS INQUIRER • JUNE 2010
81
On the Job
onthe
JOB Careers in the Oilpatch
Dale Terry Age: Title: Company: Location: Education:
45 Construction manager Norseman Inc. Edmonton NAIT carpentry
What do you do? My background is in carpentry, particularly concrete forming and scaf folding. For the past seven years, I’ve worked for Norseman’s Por table Building division, first as a field crew leader and then as a construction superintendent. Eight months ago, I took over managing all of the construction operations. How is business these days? The pace is really picking up. Especially here in Alberta and Saskatchewan, there’s activity at pretty much all of the big oilsands sites. Last year, our division was a little slower, with many companies putting a hold on their new development plans. It was nice to be able to spend a little more time at home. We’re busier now, but we are still selective in hiring competent, hard workers. What are the most challenging aspects of your job? In the field, it’s weather—working outside, particularly when it’s minus 30 or colder. Sometimes it gets so windy we can’t use the trucks to pull the fabric covers over the steel framework. Psychologically, it can be hard to spend so much time away from home. We have four kids—seven straight years of diapers and now they’re all in sports. Fortunately, my wife Jenna is amazing, and my present position allows me to spend more time at home. What are some key indicators of quality for this type of product? One indicator is the use of steel in the building. Our structures have almost t wice as many steel trusses as many of our competitors. We’re also one of the very few membrane-structure companies in Canada that control the entire process, from design and fabrication (we make our own steel frames and membrane covers ourselves) to installation and after-sale service. In March of this year, one of your competitors filed for bankruptcy protection. Reportedly, there have been problems with engineering and consequent liabilities for repairs. How do the difficulties facing that company affect Norseman? Customers, both our own and others, have been calling us about it and that’s natural under the circumstances. For tunately, Norseman has the best safet y record in the membrane structure industry. Our products have always been engineered
Photo: Mike Byfield
to meet the strict standards of the National Building Code of Canada and even beyond. Not one of our engineered buildings has ever collapsed. And our focus on safety extends to our own people. Field erection of our structures has always been handled by Norseman-trained personnel, and we’ve never had a major accident during installation.
OIL & GAS INQUIRER • JUNE 2010
83
Conference & Exhibition – July 20–22, 2010 Calgary TELUS Convention Centre, Calgary, Alberta, Canada • • • • • • • •
Define optimum start-up strategies for maximum oil recovery Regulations for Oil Sand related recovered sulphur Discover how timelapse seismic is being used as an effective tool Discover safe, viable alternatives to conventional insitu operations Global project studies from Trinidad, Argentina and Mexico Achieve energy savings by utilizing low-grade waste heat Discover technology that increases yields and quantities Reduce costs and greenhouse gas emissions
Oil Sands and Heavy Oil Technologies Conference & Exhibition is a unique annual event for the industry which combines a world class conference with exhibitors showcasing the latest technological developments. Our conference program addresses the challenges faced by the industry with dedicated tracks on key topics including: • • • •
Insitu Methods Geophysical Issues Sulphur Issues Carbon Capture Sequestration (CCS) Projects
• • • •
Project Management and Economics Global Projects Water Treatment Extraction and Upgrading
To find out more about the conference and the potential to network with key industry players visit
www.oilsandstechnologies.com. Owned & Produced by:
Flagship Media Sponsors:
Media Partners:
Promo Code: OGJ01
Tools of the Trade
TOOLS
OF THE TRADE PatchMap A LOOK AT NEW TECHNOLOGIES
Who is SkyBase Mapping? SkyBase Mapping [SkyBase Geomatic Solutions Inc.] morphed from a contract oilfield-survey company into a digital- and paper-mapping company that primarily creates mapping for Garmin software and GPS units. For the oil and gas sector ‘patch,’ we produce PatchMap. For weekend ‘bush warriors’, there’s BushMap, a less expensive product. Then came AgMap for anyone servicing the farm sector across the Prairies, and also a web-map service for automated vehicle location companies. What is PatchMap? PatchMap is a set of digital maps containing all of the oil and gas field locations ever applied for, along with the most complete road dataset available. PatchMap presently covers all of Saskatchewan, Alberta, and northeastern British Columbia. The maps can be used in Garmin GPS units, desktop computers, and notebooks for anything from normal search and navigation, to job bidding and crew dispatching. Small views of the map are increasingly being seen in field reports. The ‘moving map’ personal computer [PC] version [utilizing nRoute] allows for the most complete usage, but most people are just interested in ‘getting there,’ so they gravitate to the GPS version. We have about 1,000 PC customers, and between two and three times that for GPS. What are the competitive advantages of PatchMap? No other product is even close to being as detailed and complete as PatchMap. The SkyBase dataset has an additional 88,000 kilometres of roads, with more being constantly acquired. Our mapset gets updated about four times each year. Every oilfield location point has additional information, such as name and operator, license date and number, and strike zone [oilfield] and surface location. Following the practice of the Energy Resources Conservation Board, all directionally drilled wells are named by their bottomhole. Whether the surface or the bottomhole is used, crews will get to the correct location. So far, our customers are primarily companies and individuals located in these areas. In the future, we expect major producers to recognize the savings in time and money that PatchMap can bring to all of their field operations. Where do you see PatchMap heading next? On certain GPS units, a verbal safety warning advises if you get too close to a sour wellsite. Both sour and abandoned locations are already visually indicated on our maps. As a pilot project regarding road hazards, we have built-in verbal warnings for narrow bridges, approved chain-up areas, blind-approach corners, steep hills, railway crossings, etc. Through JuneWarren-Nickle’s Energy Group, we have implanted certain listings from COSSD [Canadian Oilfield Service & Supply Directory] that can be called with a single-button push and will soon add Rig Locator search capabilities. We are also looking at a Citrix-based PC deployment, which will be favoured by the big companies. There are many more trucker-related issues being evaluated for future solutions, so don’t let us out of your sight.
Information supplied by: Robert Coutts, President of SkyBase Geomatic Solutions Inc.
OIL & GAS INQUIRER • JUNE 2010
85
Political Cartoon
Advertisers' Index 1174365 Alberta Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 1214848 Alberta Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 & 66 Abacus Datagraphics Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Allan R. Nelson Engineering (1997) Inc . . . . . . . . . . . . . . . . . . . 52 All Weather Shelters Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Annugas Compression Consulting Ltd . . . . . . Inside Back Cover ASAP Heating & Well Servicing Corp . . . . . . . . . . . . . . . . . . . 36 ATCO Structures & Logistics Ltd . . . . . . . . . . . . . . . . . . . . . . 65 Bear Slashing Ltd . . . . . . . . . . . . . . . . . . . . . Outside Back Cover Belzona Western Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Bidell Equipment LP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Bilton Welding and Manufacturing Ltd . . . . . . . . . . . . . . . . . . 74 Black Sivalls & Bryson (Canada) Ltd . . . . . . . . . . . . . . . . . . . . 58 Brother’s Specialized Coating Systems Ltd . . . . . . . . . . . . . . 58 Brownlee LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Calgary Health Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Canadian Association of Petroleum Producers (CAPP) . . . . . . 6 Canadian Enviro-Tub Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CARES Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Caush Xhufi (Professional Geophysicist) . . . . . . . . . . . . . . . . 24 Christina Lake Lodge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 City of Grande Prairie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 CJS Coiled Tubing Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Continental Electric Motor Services Ltd . . . . . . . . . . . . . . . . 26 County of Grande Prairie No. 1 . . . . . . . . . . . . . . . . . . . . . . . . . 34 Crompton Western Canada Inc . . . . . . . . . . . . . . . . . . . . . . . . 16 Dean’s Pump Service Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 DFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
86
JUNE 2010 • OIL & GAS INQUIRER
Diversified Glycol Services Inc . . . . . . . . . . . . . . . . . . . . . . . . 58 Eagle Drilling Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Edmonton Exchanger & Manufacturing Ltd . . . . . . . . . . . . . . 22 Falvo Electrical Supply Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Flexpipe Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-31 Gaugetech Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Grande Prairie Regional College . . . . . . . . . . . . . . . . . . . . . . . 56 Imperial Oil Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ITT Water & Wastewater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Joule Technical Sales Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Kubota Canada Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 LJ Welding & Machine . . . . . . . . . . . . . . . . . . Inside Front Cover Lloydminster Heavy Oil Show . . . . . . . . . . . . . . . . . . . . . . . . . 82 Lockhart Oilfield Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . 46 LoTech Manufacturing Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 MaXfield Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Maxon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 MCI Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Mechanix Wear Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Meridian Mfg Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 MPI-Marmit Plastics Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 NAIT Corporate and International Training . . . . . . . . . . . . . . . 62 Northern Mat & Bridge Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Northgate Industries Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Northstar Energy Services Inc . . . . . . . . . . . . . . . . . . . . . . . . . 4 Norwesco Canada Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Oil Lift Technology Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 OilPro Oilfield Production Equipment Ltd . . . . . . . . . . . . . . . 70
Oil Sands and Heavy Oil Technologies . . . . . . . . . . . . . . . . . . . 84 One 4 Haul . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38-39 Opsco Energy Industries Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Penfabco Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Phoenix Fence Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Platinum Energy Services Corp . . . . . . . . . . . . . . . . . . . . . . . . 25 Platinum Grover Int. Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 PrintWest Communications . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Production Control Services . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Propak Systems Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Prostate Cancer Canada Network . . . . . . . . . . . . . . . . . . . . . 76 Radafab Oilfield & Industrial Supply Inc . . . . . . . . . . . . . . . . . 66 RTS Services Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Strad Energy Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Suncor Energy Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Systech Instrumentation Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Tank Gauging Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 TCA Marketing Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 T & E Pumps Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Titan Logix Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Tomco Production Services Ltd . . . . . . . . . . . . . . . . . . . . . . . 23 Vector Communications Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Vertigo Theatre Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 V.J. Pamensky Canada Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Waydex Services LP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Westeel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 World Energy Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80