JUNE 2011
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Canada needs new oil and gas markets for sustained growth
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Technology creates North American oil and gas supply glut. Canada needs new markets for sustained growth.
10
Autopilot
High decline rates, complex wells, drive service companies skyward.
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Hot play
Gas prices force explorers to hunt liquids in Deep Basin.
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PHOTO: Joey Podlubny
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Technology drives North American oil and gas supply glut. Canada needs new markets for sustained growth By Darrell Stonehouse
PROFILER 5
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anada’s upstream oil and gas industry has been very successful in developing the technologies needed for turning the country’s vast resource base into reserves in recent years. So successful, in fact, that burgeoning petroleum supplies have outgrown traditional export markets. New oilsands production, combined with new pipeline export capacity, has supply backing up at Cushing, Okla., resulting in West Texas Intermediate crude trading at a $10- to $12-per-barrel discount compared to North Sea benchmark Brent crude during the first quarter of 2011. The differential between light and heavy crude soared to $18.57 per barrel this year from $7.64 per barrel in the first three months of 2010 due to continuing pipeline restrictions to export markets. Massive shale gas growth in the United States has destroyed export demand for Canadian gas just as the shale gas revolution takes hold north of the border. Prices languish well under the $6 per thousand cubic feet of gas most reservoirs in Canada need to be profitable. And with U.S. production continuing its rapid expansion, there is growing recognition that the current situation may be permanent. Canadian industry and governments are now wrapping their heads around the new realities of North American petroleum markets, and are looking at developing a national strategy to find export markets hungry for expanding supply. “Canada has all the hallmarks of an energy superpower, but we don’t have the right strategy to get us there,” Lorraine Mitchelmore, Shell Canada Limited president and country chair, commented recently. Mitchelmore said on the plus side of the ledger, the country has enormous energy wealth, including the second-largest proven oil reserves in the world. It also has a huge gas resource in place, an open market, strong regulatory environment and secure, reliable and responsible producers. That said, Mitchelmore said the country also has some significant liabilities to overcome on the road to becoming a global player. These include an increasing environmental focus on the oilsands, an aging workforce and a major infrastructure shortfall. “We are hampered by the existing infrastructure and must find a timely way to build major new infrastructure projects that are needed to open up new markets for Canadian energy,” she noted. “These include Enbridge [Inc.]’s Northern Gateway project, TransCanada [Corporation]’s Keystone Pipeline, Mackenzie Valley Pipeline and potentially a liquid natural gas terminal off the west coast of B.C.” If the country can pull together, however, the Shell Canada president believes it can be a global force in energy markets. “Along with Norway, we are the most stable, the most reliable and the most democratic of the world’s top 10 oil and gas producers. That’s a distinct competitive advantage given the current turmoil in North Africa and the Middle East, where five of the other top 10 are located,” she said.
Natural Gas The size of Canada’s resource base isn’t in question. The arrival of extended-reach horizontal drilling and multistage fracturing technology has increased the country’s technically recoverable gas resource to
as much as 1,300 trillion cubic feet as explorers can now access previously trapped tight gas and shale gas formations, according to the Canadian Society for Unconventional Gas. That’s over 100 years of supply. The trouble is the same technological revolution has taken hold in the United States, resulting in a market awash with natural gas. U.S. shale gas production has climbed from four per cent of total production seven years ago to account for almost one-quarter of production in 2011. The United States now produces more shale gas than Canada’s total natural gas production. And despite a decline in gas-directed drilling in early 2011, that production is expected to increase again this year, according to analysts. Current estimates by the U.S. Energy Information Administration (EIA) suggest the country is facing an oversupply of three billion cubic feet of gas per day coming out of the winter. And while rigs targeting natural gas are down 10 per cent compared with last year, industry expects supply to increase by 1.5 billion to two billion cubic feet in 2011. This should keep gas prices near $4 per thousand cubic feet for the year. U.S.-based natural gas analysts BENTEK Energy predicts the rise of the Marcellus shale play, combined with new pipelines in Rocky Mountain states allowing stranded tight gas resources access to markets in California, will significantly impact Canadian exports to the United States in coming years. BENTEK says Canadian producers can expect a 30 per cent drop in exports, down to five billion cubic feet per day, by 2015. The rise in U.S. production couldn’t come at a worse time. Unconventional gas giant Encana Corporation expects production from shale plays in British Columbia alone could more than double the province’s current production of 2.8 billion cubic feet per day to seven billion cubic feet per day in the next seven to 10 years. Finding markets for this new gas will be the key for the industry to grow. The Canadian arm of global accounting firm Ernst & Young says the gas industry is going to have to develop new export markets fast. “To hang on to market share and remain competitive, Canadian companies will need to look farther afield for new customers,” says Lance Mortlock, senior manager in Ernst & Young’s Canadian oil and gas practice. “Canadian companies should be on the lookout for new long-term customers in markets like Asia where demand is rising. Canada’s ability to export this gas is key to our growth.” Mortlock says a second area of potential growth is through increased domestic demand, with gas replacing coal for power generation. Others are also pushing for natural gas to be used as a transportation fuel. But to increase domestic consumption, he says, both industry and government need to come together with a plan. On the export front, there are currently two liquefied natural gas (LNG) export applications before the National Energy Board (NEB). The Kitimat LNG terminal, owned by Apache Corporation, EOG Resources, Inc. and Encana Corporation, is the largest and furthest ahead in the process. The terminal, planned to be operational by 2015, will turn around 234 billion cubic feet of gas (700 million cubic feet per day) into up to five million tonnes per year of LNG. The approximate cost for phase one is $3 billion. An export licence application was filed with the NEB late last year. It did not include information on gas sales.
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PROFILER Edmonton
Hardisty Calgary Regina Winnipeg Horn River
Helena Prince Rupert
Bismarck
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Alberta
Chicago
Grande Prairie
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Springfield Topeka
Vancouver
Pacific Northern Gas Ltd. Pipeline Proposed Pacific Trails Pipeline Spectra Energy Pipeline
Patoka Wood River
Cushing
Keystone Pipeline Keystone Pipeline Expansion
Austin
Port Arthur
Houston
The route of the proposed Pacific Trail Pipeline that will take gas to Kitimat, where it will be converted to LNG for transport to Asian markets.
TransCanada’s Keystone XL Pipeline route. The line would move Canadian oil to Gulf Coast markets.
Encana bought a 30 per cent share in the project in early April. Backing up the rationale for building the LNG export terminals is the theory that Canadian gas prices will remain cheaper than prices in Europe and Asia for decades to come. Current LNG prices in Japan are around $12 per million British thermal units, compared to around $4.25 in Canada. Encana president Randy Eresman said in announcing its buy-in at Kitimat LNG that the project will allow the company to capture that spread. “We expect that this project will help advance North America’s natural gas economy across the Pacific to markets where demand is growing and natural gas prices are more closely tied to oil prices,” said Eresman. A second, much smaller LNG project has also been filed with the NEB. It calls for 125 million cubic feet per gas per day, and will expand in similar intervals as pipeline capacity develops. There are also rumours of Shell and Mitsubishi Motors Corporation backing a third facility. Global industry analysts Wood Mackenzie believe there is a window of opportunity for Canadian suppliers to capture some of the international LNG market. Presenting at Gastech 2011 in Amsterdam, Wood Mackenzie said it expects that around 150 million tonnes of new LNG capacity will be needed over the next 10 years to meet growing demand. This will require supply from discovered conventional resources, unconventional gas, and yet-to-be-discovered or appraised gas. “Multiple new LNG-supply projects have been commissioned in recent years and further new capacity has been sanctioned, which will largely meet growing demand out to 2015,” Andrew Pearson, head of LNG research for Wood Mackenzie, said. “But we expect that a decline in currently operational supply combined with robust demand growth will mean that around 40 new, average-sized LNG trains will need to be developed in the next decade. “We anticipate that growth in gas demand will come from emerging markets, particularly in Asia, and as a result of declining indigenous gas production from other mature gas markets, such as Europe. Hence, we forecast that LNG trade will increase at an average rate of 6.5 per cent per year out to 2025. It’s a significant prize to go after,” he added.
But the Canadian industry will be facing serious competition. Qatar is the dominant LNG exporter, producing over 77 million tonnes annually. Because of high liquid volumes accompanying gas production, supply costs are negligible. But after just completing a major-capacity expansion, Wood Mackenzie expects things to be quiet in the Arab country for the next few years. “Countries such as Australia, Russia, Nigeria and Iran have multiple discovered resource opportunities, which currently have no binding sales agreements or firm development plan in place. Australia looks to be the most likely source of future LNG development given its stable fiscal and regulatory system, but costs and partner misalignment may continue to stall some proposals,” Pearson said. “The future for new LNG supply is bright, but it will remain competitive, and the challenge is being involved in the right project, at the right time, with the right partners and stakeholders.” Industry is also looking to spur domestic demand to deflate the gas glut. Restarting the gas power market that caught fire in the late 1990s before being extinguished by high gas prices is one target. Use of natural gas for power generation increased by 70 per cent in North America in the last 12 years, but stalled out after a rush of construction that began around 1999. It appears power generators are getting ready for another gas-driven boom. Calgary-based ENMAX Corporation has dusted off plans for its 800-megawatt Shepard Energy Centre, which has sat dormant since the financial crash of 2008. Construction is set to begin this summer. The Shepard plant is likely just the beginning. In 2010, the federal government announced stringent new emissions rules on coal-fired generation, targeting both new plants and older plants reaching the end of their operating lives. There are currently 51 coal-fired plants in Canada, with 33 expected to reach the end of their productive lives in the next 15 years. The transportation sector is also being groomed to soak up excess gas. In 2010, industry and government partnered on a road map aimed at spurring the transportation industry to use more gas in its fuel mix. The
MAP: TransCanada Corp.
MAP: Pacific Trail Pipeline
Oklahoma City
St. Louis
PROFILER 7 Dawson Creek Chetwynd
Prince Rupert
Tumber Ridge
Smithers Terrace Houston Kitimat
Grande Prairie
Fort St. James Fox Creek
Bear Lake
Burns Lake
Whitecourt
Bruderheim Morinville
Mayerthorpe
Prince George
Edson
Edmonton
Hinton Jasper
British Columbia
Alberta
Calgary
The route for Enbridge Inc.’s Northern Gateway pipeline, which would take around 500,000 barrels per day to international markets. It will be twinned with a line bringing condensate to Alberta for use in diluting bitumen in transport.
target is medium- to heavy-duty vehicles that either return to home base every evening or travel in corridors where infrastructure can be economically constructed. The road map says natural gas–fuelled vehicles could save money and reduce greenhouse gas emissions. “Despite these potential benefits, market adoption for medium- to heavy-duty natural gas vehicles [NGVs] has been very limited to date,” reads the road map. “There are significant challenges associated with NGV deployment in Canada, including operating risks associated with costs and technology performance, high up-front vehicle costs, a lack of widespread infrastructure, and non-economic issues, including scarce recent experience with NGVs, insufficient information about current technology and a lack of comfort with NGVs based on past history.” Encana has been a driving force in pushing NGV vehicles. The company appointed Eric Marsh as executive vice-president gas economy and leader of the Natural Gas Economy Team to drive new uses for natural gas. In 2010, Marsh made the rounds across North America selling a clean-transportation future with NGVs. Marsh said industry is targeting having 145,000 heavy-duty trucks fuelled by natural gas on the road by 2025, along with 2.4 million light-duty vehicles. It also hopes to have two natural gas highway corridors up and running. The first corridor will run from Windsor through Toronto and onward to Montreal and Quebec City. The other will stretch from Vancouver to Edmonton via Calgary. Around 1.4 billion cubic feet of gas per day will be used in such a scenario. Talisman Energy Inc. is investigating taking a different route in bringing natural gas to the transportation market. It is partnering with South African–based Sasol Limited in doing a feasibility study on using Sasol’s gas-to-liquids (GTL) technology to convert Montney tight gas into fuels that fit today’s transportation infrastructure. Sasol has taken a 50 per cent stake in Talisman’s Farrell Creek and Cypress developments, and the two companies are already working to see if it is economic to build two 46,000-barrel-per-day GTL facilities.
Talisman senior manager of corporate projects and business developments Mike Adams told a recent conference in Calgary that the company sees opportunity in using GTL technology to turn natural gas into premiumpriced diesel, naphtha and jet fuel. “There’s a big market in North America for these products,” he said. “And you don’t have to know anything about the technology to know when you have high oil prices and low gas prices, the economics of this are enhanced. The bigger the gap, the better the economics. “The technology is there. It works. It’s expensive. The efficiency is less than in LNG, so you have to take that into account, but I think people are going to look at these technologies more and more to monetize shale gas,” he added.
Oil While natural gas producers struggle with a glut of supply, oil and oilsands producers are finding pipeline infrastructure a major hindrance to growing markets. It was thought the construction of Enbridge Inc.’s Alberta Clipper pipeline to Wisconsin and the initial phase of TransCanada Corporation’s Keystone pipeline to Cushing, Okla., which added a combined volume of around 900,000 barrels per day, would provide enough takeaway capacity to last for the medium term. However, as oil began filling the Keystone line this winter, supplies began to build at Cushing, overwhelming the regional refinery market. The glut at Cushing, combined with growing production out of the Bakken tight oil play, has caused the West Texas Intermediate benchmark to be sold at a major discount to world prices. The price spread has many oilsands producers hoping that at least one of two planned pipelines will quickly move through the regulatory process. The first is TransCanada’s Keystone XL project, which would see 500,000 barrels of oil per day shipped to U.S. Gulf Coast refineries. Speaking at the recent National Buyer/Seller Forum in Edmonton, Total E&P Canada vice-president Gary Houston said traditional Canadian oil markets in the northern and Midwest states are filled to the brim.
MAP: Enbridge Inc.
Vancouver
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PROFILER
Wood Mackenzie said it expects that around 150 million tonnes of new LNG capacity will be needed over the next PHOTO: ©iStockphoto.com/Hazlan Abdul Hakim
10 years to meet growing demand. This will require supply from discovered conventional resources, unconventional gas, and yet-to-bediscovered or appraised gas.
“This is the new reality,” Houston said. “We know they are swimming in oil because the price delivered in Chicago is $10 a barrel lower than the equivalent barrel floating on the ocean. So at 2.5 million barrels a day, we are talking about $9 billion a year lost in value to our industry, and that is not a rounding error.” Houston said with traditional markets satiated, the only new markets available for increasing Canadian production are the Gulf Coast and overseas. He added construction of the Keystone XL would help relieve some of the pressure on Midwest and northern refiners, and bring prices to Gulf Coast levels. There is, however, major opposition to the Keystone XL expansion. It comes largely from two sources: landowners and environmentalists. Landowners are mostly concerned about the impact any future spills would have on the Ogallala aquifer, a massive shallow underground reservoir that provides water for much of the U.S. breadbasket. Environmentalists share that water concern, but are also using opposition to the pipeline to attack oilsands development by proxy. Environmental assessments completed by the U.S. federal government, however, have twice found the pipeline presents an acceptable risk. A decision on whether the U.S. federal government will approve the Keystone XL is expected by the end of the year. Enbridge is also meeting stiff opposition for its Northern Gateway Project. The proposed $5.5-billion project would deliver 525,000 barrels per day of oilsands production to the port of Kitimat, B.C., where it would be loaded into large crude tankers bound for Asian markets. A parallel pipeline would deliver imported condensate to Alberta for use in the oilsands. Enbridge president and chief executive officer Patrick Daniel said at a recent speech to the Empire Club of Canada in Toronto that the Northern Gateway Project needs to be looked at through the lens of being part of Canada advancing to become an energy superpower, as envisioned as part of a national energy plan. Daniel pointed out there are distinct disadvantages to relying solely on U.S. markets for the country’s oil exports. He said with only one market, Canadian producers are price takers. “The United States likes, perhaps even prefers, Canadian oil. It is secure and reliable,” said Daniel. “But they have other options, a world of global energy options. We don’t.” Building the pipeline would give Canadian industry new options by opening up global markets to Canadian supply, he said.
“Canada’s west coast is the gateway to half the globe’s geography and nearly half of the world’s population,” he said. “It is an essential driver of our future economic success.” Enbridge is making a strong economic argument in favour of Northern Gateway. According to independent estimates, over 30 years, the project will add $270 billion to Canada’s gross domestic product—about one-fifth of Canada’s total economic output in one year. “It is literally a transformative injection of new economic opportunity to Canadians for a generation,” said Daniel. But opposition to Northern Gateway is equally strong. Many First Nations along the pipeline route have banded together with environmental groups in a well-organized campaign attacking Enbridge. Both the federal Liberal and New Democrat parties support a ban on tanker traffic in coastal waters, which would kill the project as well. Daniel said those opposing the line need a dose of reality. “The project will proceed only if we can rise above the mounting clamour of a coalition of hardline activists and their political allies committed to saying no to proposed projects and initiatives rather than seeking balanced, sustainable development and supporting continued prosperity for our entire country,” he said. “We say no to nuclear, we say no to coal, we say no to oil, we say no to fracturing wells to recover natural gas, but we say yes to light switches, cooked food, school buses and gas pedals.” Daniel said Enbridge is committed to helping make Canada a truly global energy superpower, but simple possession of vast reserves of oil, gas, coal and renewable energy sources doesn’t make it true. “An economic superpower, in whatever sector, is a country that has the influence, impact and standing on the world stage that comes from delivering to partners across the globe,” he noted. “The world is clamouring for energy, and will continue to require all sources of energy over the coming decades as we make the transition to renewables,” he added. “We could choose to keep Canada’s vast supply of oil, which we have developed ethically and responsibly, landlocked on the North American continent. We could continue to sell it at a discount, while other nations create the energy supply lines and energy market access for the rest of the world. Or we can take the steps required to bring our oil to markets around the planet. We can responsibly, sustainably and safely construct and operate nationbuilding projects like Northern Gateway. We can make the most of the opportunities available to us and build on our strategic advantages as a responsible, democratic trading nation.”
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10 PROFILER
Autopilot New technology, high decline rates, have Canada’s service sector f lying skyward
PHOTO: Joey Podlubny
By Darrell Stonehouse, with reporting by R.P. Stastny and Pat Roche
An Ensign ADR rig
W
ith Canadian oil and gas explorers increasingly focused on resource plays, service and supply companies with the right technologies can expect busy times going forward. In late April, the Petroleum Services Association of Canada (PSAC) updated its 2011 forecast, calling for around 13,000 wells to be drilled in 2011. On the surface, the numbers indicate not a very good year. For comparison, around 25,000 wells were drilled in 2006, the record year for drilling in western Canada. Yet drilling contractors and other service providers are far from depressed at today’s numbers. The resource play boom has altered how industry measures success, and even where the dollars go on the supply chain. The combination of extendedreach horizontal wells with multistage fracturing stimulations common in the tight reservoirs synonymous with the resource play concept is now driving exploration and development economics. Add to that high decline rates at most resource plays and the picture that emerges is one where more and more activity will be needed to maintain and increase production. Extended-reach horizontal wells have become the status quo in accessing tight resources across the Western Canadian Sedimentary Basin, attendees at PSAC’s mid-year forecast were told in April. “We’re forecasting that horizontal wells will account for 44 per cent of all wells by the end of 2011. That’s triple the 2007 level of 14 per cent,” explained PSAC president Mark Salkeld. The number of rig operating days has doubled in just three years because of the increased time required to drill and complete longer and deeper wells in unconventional formations. The average number of days it takes to drill a well has climbed to 11.5 in 2011 from 5.7 in 2008. “Well depth and reach is 33 per cent more than it was just five years ago,” Salkeld said. “To put that into perspective, well depths on average are almost 600 metres deeper than they were in 2008.” Drilling costs per well have increased dramatically as horizontal drilling and multistage fracturing technologies have become mainstream. Salkeld pointed to ARC Financial Corp. data showing how
things have changed at the Pembina oilfield over the last decade to prove his point. In 2000, producers spent $325,000 to drill a vertical well at Pembina. Today, the field is being drained using horizontal technology and multistage fracturing. Total well costs have climbed ninefold to $2.7 million. The growing importance of resource plays like the Pembina isn’t lost on drilling contractors. Precision Drilling Corporation president and chief executive officer Kevin Neveu told analysts in late April at the company’s first-quarter conference call that nearly 80 per cent of its rigs working in the first quarter were drilling complex horizontal or directional wells. Neveu added that demand for the high-tech rigs needed to drill such holes outstrips supply. “A prolonged Canadian winter drilling season, characterized by the highest utilization since 2006, illustrated the persistent industry shortage of Tier 1 drilling rigs,” he noted. “During the quarter, Precision signed new-build rig term contracts for seven additional Tier 1 Super Series rigs for Canada; the majority of which our customers tell us are headed for oil projects when they are completed in late 2011 and early 2012. This brings our 2011 new-build rig program to 12 rigs with 11 scheduled to be deployed in the Canadian market and one for the United States market.” But it’s not just drilling companies enjoying the resource play boom. The need for multistage fracking to make wells produce at economic levels has driven up completions and testing costs as well. Costs have climbed to 54 per cent of total well costs compared to 17 per cent in 2000. And like with drillers, pressure pump service suppliers and related completions specialists are growing to meet demand. Trican Well Service Ltd. is hiking its originally planned 2011 capital budget by $120 million to $493 million. The company spent $284.62 million last year. Calfrac Well Services Ltd. announced a capital budget for 2011 of $280 million, up from anticipated 2010 capital spending of $236 million. GasFrac Energy Services Inc. will up 2011 spending to about $150 million from $83.5 million last year.
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WCSB Horizontal Wells Drilled January - April
Number of FRACKING Intervals Per Well in Canada 17 16 15
2,500 Number of Intervals Per Well
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Vertical credit: Daily Oil Bulletin
Number of Intervals Per Well
Doug Ramsay, founder and chief executive officer for Calfrac, says much of his company’s investment in 2011 is targeted towards instituting new technology to make fracturing more efficient. Part of that investment will go to installing new pump panels that will enable one operator to control five pumps during hydraulic fracturing operations. Currently, there is one operator per pump. “Reducing the number of frac crew personnel present on a well pad 17 That’s an important consideration in terms of by half is a realistic goal. both cost and the labour 16 shortage that’s already squeezing the industry,” Ramsay says. 15 The company is also 14designing duel fuel engine systems that would initially begin fracturing 13with diesel, and then switch to raw gas as it begins to flow from the well. That innovation would reduce operating 12 costs along with slashing fuel haulage, a significant factor for remote 11 sites like the Horn River Basin. 10 It is also working to answer public concerns about water usage in 9 multistage fracturing treatments at shale gas developments. Water has 8 as development has moved from traditional become a significant issue oil and gas regions into7areas unfamiliar to the industry. “A key focus for us is6 water management. Working with Shell at Groundbirch in northeastern B.C., we’re fracking with treated sewage 5 from Dawson Creek. We’re 4 also using wastewater from Pennsylvania coal mines and in the Fayetteville shale gas play in Arkansas we use 70 3 per cent recycled water,” Ramsay says. “Ideally, we’d like to develop 2 chemicals so environmentally friendly that frac water would remain 1 potable, and that goal has already been partially realized.” 0 Macquarie Equities Research Q1 analyst Q2 Scott Q3Treadwell Q4 told Q1the audience Q2 Q3 at the PSAC update his company expects the pressure pumping market to 2008 remain tight until new equipment comes on stream later this year. 2009 “The first half of the year is likely to be flat out and as we add Vertical Horizontal capacity in the second half, we’ll get some balance to the market, though it will certainly still be short going into 2012,” he said, adding
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Horizontal
credit: Trican Well Service Ltd.
that if Horn River producers increase activity building towards producing 1.5 billion cubic feet per day to supply the proposed Kitimat LNG terminal for exporting, the gas the pumping market will again be stressed. “You need two million horsepower to service that incremental demand, half a million of that going to the Horn River. So that’s a fundamental huge step in demand.” As resource plays across western Canada mature, many analysts are predicting what looks like high decline rates at some plays will further drive service and supply activity. Earlier this year, Peters & Co. Limited reported that five multi-frac horizontal plays showed average first-year decline rates of 72 per cent, with the median first-year decline rate on 10 oil resource plays at 60 per cent. The median first-year decline rate on horizontal wells in nine gas resource plays was 75 per cent—15 percentage points higher than the oil plays The decline rates are important, Peters & Co. noted, because companies with higher proportional exposure to such plays tend to have high corporate decline rates, which Peters warned will often lead to increasing maintenance capital requirements to maintain production. An example of this is the Bakken tight oil play in southeastern Saskatchewan. According to Saskatchewan government figures, horizontal Bakken wells have an average 74 per cent decline rate during their first year of production. On average, they decline by 24 per cent in the second year and 22 per cent in the third year. Peters & Co. says what these decline rates mean is companies active in the play need to be continually drilling and completing wells just to stay in place production-wise. It points to one major producer, which it estimates will have to spend to keep production flat in the region. Q4 $785 Q1 million Q2 in 2011 Q3 justQ4 Meanwhile, Peters & Co. believes the treadmill of steep initial decline rates could2010 have a silver lining for the service sector. “We expect that oilfield service company activity will rise as operators struggle to maintain production levels in the face of rising base decline rates,” the investment firm wrote in a March 31 investor note.
12 PROFILER
Gas prices force explorers to hunt liquids in Deep Basin By Elsie Ross
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HOT
PLAY
ith natural gas prices in the doldrums, Canadian explorers are increasingly focused on finding reserves with associated liquids production to make drilling economic. The Deep Basin in west-central Alberta and eastern British Columbia has become the preferred target, with operators using new technologies in both vertical and horizontal wells in the search for liquids-rich natural gas and in some cases, light oil. One active Deep Basin player is Tourmaline Oil Corp., which holds 1,650 sections (1.1 million acres) with an average 65 per cent working interest in the heart of the play, where the whole Lower Cretaceous is gas-saturated. “It is one of the most productive sweet gas provinces on the planet,” Mike Rose, president and chief executive officer of Tourmaline Oil Corp., told a recent FirstEnergy Capital Corp. Investor Conference in New York on the play. “The unique geologic setting offers multiple stacked opportunities in a concentrated geographic area.” The company’s primary development focuses on the maximum number of tight sands (up to 15) via multi-phase fracs in vertical wellbores with four to five fracs per well and four wells per section. Rose was among the pioneers in developing multistage fracking in vertical wellbores in advance of horizontal frac technology. To maximize the gas zones, the company uses 3-D seismic to pick most of its locations and has 90 per cent of its lands covered by 3-D. “The rationale is that about half of those 15 zones produce some kind of image,” he said. Building its own facilities enables Tourmaline to be a lower cost operator and to capture liquids more efficiently, averaging between 15 and 20 barrels per million cubic feet in the area. It has built gas plants at Wild River, Berland, Hinton and Minehead. Tourmaline has drilled about 110 vertical and 10 horizontal wells and at two wells per section has an inventory of 3,100 vertical and 1,500 horizontal wells. Although the historical reserve rate of 1.6 billion cubic feet per well and two wells per section would produce 5.1 trillion cubic feet of gas, that could rise with multi-zone completions that would increase reserves to two billion to three billion cubic feet per well, said Rose.
As the area is already approved for downspacing to four wells per section and commingling, there will be no need to go through a further regulatory process, he said. According to Rose, vertical wells are the best development method for attacking the stack of Cretaceous sands. At the same time, a number of horizontal opportunities are emerging as well. “In certain areas of the tight sands and the intervening shales, which are resource plays in their own right, it does make sense to go horizontally,” he said. He added that one horizontal opportunity is the Cardium, which in the Deep Basin is in the gas condensate window and produces 40-45 barrels of liquids per million cubic feet of gas or more, he said. Tourmaline has more than 1,000 Cardium opportunities in its inventory but so far has drilled only five, with plans for a total of up to 15 tests by the end of this year. “We have had three or four really prolific Cardiums and the liquids have hung in,” he said. While the Wilrich horizontal opportunities are more localized, the company has had some spectacular results from the zone at the north end of the basin. “Having the 3-D data set is a huge advantage so we can see where we want to direct all those horizontals, and some of the zones we can actually image directly,” he noted. At Marlboro/Pine Creek, Fairborne Energy Ltd. has also been pursuing the liquids-rich Wilrich play, drilling the first horizontal Wilrich well in the basin. “The results continue to get better and the frac technique is continuing to be modified and we are now doing about 12 fracs per well,” Steven VanSickle, company president, told the FirstEnergy conference. Initial production rates average about 4.5 million cubic feet per day and 15 barrels per million cubic feet of liquids. Fairborne also has 222 net sections at Columbia/Harlech with 80 producing wells with most of its activity focused on the Viking shoreline trend.The typical vertical wells drilled in the area are the stacked Viking, Notikewin and Gething formations.
PROFILER 13
plant. With explorers targeting liquids, fractionation facilities will be in demand.
“The anchor tenant is the Viking but you can’t see the Viking on seismic so that’s what we target most on downspacing and drill through to the Gething, a two to four metre thick condensate sand,” said VanSickle.“The nice thing about Harlech is the free condensate and NGL [natural gas liquids].” With more than half of the revenue from NGL and condensate, the effective gas price is about $8 per million cubic feet. In the last well Fairborne drilled there, it completed a Viking, Middle Mannville and Gething sand that is flowing at two million cubic feet per day and 300 barrels a day of condensate. Daylight Energy Ltd. has also been chasing liquids-rich gas in its Elmworth resource play, where it has a total land base of more than 400 gross (265 net) sections of land,The company’s first Wapiti Montney horizontal well was a 1,000-metre lateral completed with 11 fracs. “These are very prolific wells,” Brian Prokop, vice-president of capital markets, told the FirstEnergy conference. Initial production was seven million cubic feet per day and the well is still doing five million cubic feet per day with 50-60 barrels per million cubic feet of high-quality liquids, of which one-half is C5 (condensate) which attracts a price $2 off West Texas Intermediate. The balance is C3 (propane) and C4. “You could actually flare off the gas and make a lot of money — not that you could do that,” he said. Daylight Energy has 42 Wapiti Montney sections it is looking to develop at three wells per section. Four more wells are planned for this year. Although Daylight Energy also has about 100 sections of Montney rights in the southern part of its lands, the gas is leaner with only five to eight barrels of liquids per million cubic feet, said Prokop. Daylight Energy’s first horizontal Nikanassin well at a bottomhole location of 8-11-67-12W6 was drilled with a 700-metre lateral leg and had initial production of five million cubic feet per day. Two more horizontal wells are planned for this year, two 100 per cent and two in a 50/50 joint venture with ConocoPhillips Company. A Canadian Forest Oil Ltd. well with a bottomhole location of 14-36-63 13W6 tested at 32 million cubic feet per day with initial
production (one month) of 20 million cubic feet per day and cumulative production of 7.3 billion cubic feet after 16 months. However, the well is not a typical or a tight well in that it had “a little bit of structure and a little bit of fracturing,” Prokop said. A typical tight Nikanassin well costs $7.5 million to drill and has initial production of 10 million to 15 million cubic feet per day with reserves of 10 billion cubic feet. Because of the Alberta government’s deep gas royalty holiday, there is effectively five years of royalty-free production, according to Prokop. With operating costs of 40 cents per thousand cubic feet including processing, the Nikanassin can be profitable with a gas price as low as $2.20. While the play can be developed vertically, operators are attempting horizontal wells with the use of new technology, he said. So far, only 15-20 horizontal wells have been drilled into the formation. Daylight Energy is in good company with larger operators such as Apache Canada Ltd., Canadian Forest, Devon Canada Corporation, Royal Dutch Shell plc and ConocoPhillips also active in the area. “The benefit of the big players is that it will validate this play much more quickly,” Prokop suggested. “The highest risk will not be getting the gas out, but how profitable it will be.” Delphi Energy Corp. is exclusively a Deep Basin player generally focusing on the shallower Cretaceous zones with varying qualities and degrees of liquids between Hythe and Wapiti and Bigstone. The gas stream liquids content ranges from less than 10 barrels (all condensate) per million cubic feet at Hythe to an average of 80 barrels in the Nikanassin at Wapiti and upwards of 120 barrels in some Nikanassin wells, said David Reid, president and chief executive officer. The Nikanassin is a well-established formation with a large amount of gas in place that has traditionally been pursued vertically. While there has been a number of horizontal wells drilled, it’s still in the early stages. “It’s a very tough rock to drill and fracture so we have been chasing it vertically,” Reid said. Wells cost $2.5 million to $3 million on production. With 107 gross (80 net) sections in the area acquired in 2009, “we have a lot of room to run with this play,” he said.
PHOTO: Joey Podlubny
Husky’s Ram River gas
14 PROFILER
AGI ENVIROTANK AGi ENVIROTANK Saskatchewan Company Leads World in Tank Manufacturing Technology
A
Saskatchewan tank manufacturing company has recently taken a unique “high-tech” approach to its business. AGI Environtank is one of the only tank manufacturers in the world using a unique leading-edge technology in the construction of steel storage tanks. Based in Biggar, Saskatchewan, the company was created in 1993 by Dave Burton, Wayne Broeckel and Herb Ford. In 1997, Dave Burton’s son, Jeff Burton and Ken Kernohan also became shareholders.
2008, AGI experienced difficulty finding enough employees to fill all of its orders. As a result it began looking for an automated equipment solution. AGI’s leadership team quickly discovered that the technology they were looking for didn’t exist in the industry, so they decided to look for similar technology in other industries. They felt they could make modifications to meet their needs. “We wanted a piece of equipment that provided us with additional capacity and
He said it was especially memorable for his father, who has been working in the industry most of his life. According to Jeff, Dave had talked about creating a type of tank mill nearly 20 years before. “He was kind of like a kid at Christmas when we got the machine. He took at stab at making one 25 years ago, but it didn’t work out, largely because we didn’t have access to the engineering capability we needed. The Internet changed all that. When we went looking this time we had
“ We wanted a piece of equipment that provided us with additional capacity and allowed us to ensure our clients a very high quality, flawless product, as well as enabling us to produce our products faster and more efficiently.” — Jeff Burton, AGI Envirotank
AGI constructs tanks for service stations and oil fields. Originally the tanks were built using teams of welders, but in the province’s boom years between between 2006 and
FAST FACTS
COMPANY NAME: AGI Envirotank
FOUNDERS: Dave Burton, Wayne Broeckel, and Herb Ford
T: 1.800.746.6646 F: 306.948.5263 WEBSITE: www.envirotank.com
allowed us to ensure our clients a very high quality, flawless product, as well as enabling us to produce our products faster and more efficiently,” said Jeff Burton. The team found that pipe manufacturing equipment was closest to what they needed; so in 2006-2007 company representatives undertook an extensive search throughout North America, examining pipe mill manufacturing companies. They eventually found a company they thought was a good fit for AGI. In 2008, they hired the organization to manufacture their mill. The two companies worked well together and were able to manufacture the unique equipment within a year. It then took AGI another year for installation, so that the new equipment went into production in 2009. Company officials have dubbed the modified product a “tank mill.” “It was a really exciting day for us when the tank mill arrived,” remarked Burton.
much more ability to track down the the right expertise.” AGI quickly found the mill to be very successful in creating higher quality tanks in a shorter time period. “The mill’s been in operation for the past six to eight months and the results have been amazing. We’ve been able to significantly increase our capacity, our quality — and our efficiency. There’s not too many things in our business that enable you to do faster and better at the same time,” he said. In December AGI was contacted by a client about creating more than 60 tanks, each one 40 feet long and 12 feet in diameter. The client wanted the tanks by the end of January. In a traditional fabrication process, each tank typically takes about two weeks to manufacture. The project was tendered to a number of companies; the client believed they would need to use more than one company because the order was so large. However
PROFILER 15
“ The mill’s been in operation for the past six to eight months and the results have been amazing. We’ve been able to significantly increase our capacity, our quality — and our efficiency. There’s not too many things in our business that enable you to do faster and better at the same time.” — Jeff Burton, AGI Envirotank
because of the new mill, AGI was awarded the entire contract. “We received the contract in mid December, took two weeks off over Christmas and had the entire order completed by the end of January,” said Burton. AGI’s tank mill can create cylinders with diameters larger than any other tank mill in North America. According to Jeff it has the ability to create cylinders whose diameters are more than twice as large as those
created by the pipe mill used by Evraz (formely Ipsco) in Regina. The mill incorporates a unique approach to tank construction. Rather than taking sheets of steel and rolling them, as is done by most tank manufacturing plants, the mill takes the sheets in a spiral right from the coil. This ensures a much quicker manufacturing process and yields a much higher quality product. The mill welds the tank and scans the welded seams using ultra sonic
testing equipment as the tank is being constructed, ensuring flawless welds. “I think we can argue correctly that our tanks are better than the industry average largely because of our welding process,” said Burton. Burton is already foreseeing significant growth in product sales; he expects that to increase as organizations become aware of the quality of product manufactured by the tank mill.
16 PROFILER
CARES LTD. CARES Ltd.
Putting You On Solid Ground Canadian Aboriginal Remediation Environmental Services
P
owerCem™® based stabilization process is a revolutionary new construction technology for road, concrete and environmental clean-up work, brought to you by CARES Ltd. (Canadian Aboriginal Remediation Environmental Services), a Metis-owned business based in Calgary. PowerCem-based additives allow CARES to generate a flexible, durable soil cement treatment, which has been designed to help the Canadian oil and gas market meet its most challenging construction requirements. “We developed it primarily for oil and gas companies doing projects where decent construction grade soils and aggregate gravels aren’t readily available,” says President & CEO George Clark, who founded CARES in late 2005. “We can come in and build a very solid road, lease or construction site, most often at a lower cost than standard construction methods, and much more quickly.” The CARES process is proven and durable. After proof of concept successes in 2006 and 2007, CARES went commercial with PowerCem in 2008, when it began taking on larger projects, including shale gas plays and SAGD oil sands plays, which require larger drilling sites. The CARES PowerCem based soil cementing solution creates a homogeneous solid top layer for the road, drilling pad or construction
FAST FACTS
COMPANY NAME: CARES Ltd.
President & CEO: George Clark
Sales Director: Brian Verigin
T: 403.262.2737 E: info@caresltd.ca WEBSITE: www.caresltd.ca
site. It eliminates the need for standard matting, since the process provides a high load bearing capacity that supports the heaviest loads. “It has ended up putting us in a cost competitive situation. In addition to already having a cost advantage over standard construction, we are now coming in at as little as half the cost or less versus matting,” Clark says. When oil and gas companies drill on a site that CARES has completed, any operational spills that might occur during the drilling process become very minor, because the CARES soil cement treatment prevents spill penetration and further soil contamination. Cleanups are quick and easy, with prevention of costly environmental damage. The environmentally friendly technology leaves a smaller footprint with a much quicker, easier clean up. “We use waste products and substandard soils that would otherwise have to be landfilled or stockpiled, and turn them into superior construction materials. The borrow pit footprint that our clients have to use, in some cases shrinks as much as 50 per cent. Using our new construction processes means you are disturbing less forest and natural vegetation. The treated soils can be ground back up when the site is ready for reclamation, as they retain original soil characteristics, partially because we haven’t introduced tons of foreign gravel into those soils. The entire process is much more carbon friendly, reducing CO 2 emissions by anywhere from 40 – 80 per cent.” The CARES new technology soil cementing process extends the benefits the drilling side receives throughout a project’s entire life cycle. Vehicles can travel in all weather conditions, at any time of the year. “Two unexpected but welcome advantages that our clients have discovered to date include improved worksite safety, because there are far fewer slip, trip and fall hazards when working on our sites. And our clients also find that they are better able to stay on budget because they can stick to their schedule. They don’t have to send heavy equipment and
manpower through rutted, muddy, unstable ground conditions.” The technology can reduce construction time by 40 to 120 per cent and boasts a field success rate topping 99.5 per cent. “We absolutely guarantee all our work for a minimum of three seasons knowing that it will hold up for decades,” Clark notes. “If anything fails, we go back and fix it at our cost. Clients have been very happy with our proactive approach to identifying and fixing any minor issues. If better is possible, why settle for just OK?” The company is fully certified to the highest level in safety programs, including listing and maintaining their excellent program on ISNetworld. CARES provides QA/QC project management along with the specialized soil cement spreading and blending services. They work in conjunction with the client’s local contractors so that they can also benefit from the construction opportunities. “We typically act as prime contractor on all our projects, and have invested this past year in new specialized equipment, so we are ready meet the growth challenges we’ve created for ourselves,” Clark says. CARES has steadily grown revenues in 2008 and 2009 in spite of the worldwide credit crunch. In 2010, thanks to several very successful projects from large oil and gas companies (our client list includes most of the Majors!), and the recovery in the price of oil, CARES more than tripled its annual revenues. In 2011, the company is on-stream to once again triple its earnings, with anticipated annual revenues helping propel them into the top 50 or better amongst Western Canadian energy services firms. PowerCem was originally developed by Robin de la Roij, who is based in the Netherlands. CARES has exclusive Canadian distribution of this patented technology and world-wide rights related to oil and gas site development requirements. The CARES PowerCem-based stabilization process has wider applications as well. CARES has already seen successes with PowerCem on roads, highways, airport runways and industrial sites that are subjected to heavy loads.
PROFILER 17
50%, eliminate need for matting, reduce gravel by up to 90%, use any insitu sand, Reduce your borrow pits by up to
silt or clay soils, vastly improve construction safety and
save money! Bold claims not made lightly when dealing with major oil & gas companies. Backed by a full repair at our cost no-quibble warranty! Portfolio RC.20080807.CA.0158 SAGD Drilling Pads
Muskeg terrain, unstable subgrades
Productive blending > 10000m2/day
Drilling on completed mat free pad
Portfolio RC.20100811.CA.0416 Low Footprint Access Roads
Caribou in Rocky Mountain Foothills
Blending in soft organic soils
Narrow right of way completed road
Portfolio RC.20091004.CA.0262 Large Shale Gas Pads—Walking Triple Rig
Shale Gas Multi-Well Opportunities
Safe and Efficient Treatments
Heavy Loads Working Year Round
18 PROFILER
CITYOFOF CITY FORT FORT SASKATCHEWAN SASKATCHEWAN Fort Saskatchewan is Open for Business
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excellent access to a wide range of shopping, recreation, sports and cultural amenities; and a safe community with family-friendly neighborhoods. Commuting to work is easy, and the region offers many high paying industrial jobs. Median family incomes are among the highest in Canada, so there is strong demand for retail and commercial services. At the same time, Fort Saskatchewan prides itself on its clean environment and sound environmental stewardship, in a community that has been built on hard work, entrepreneurship and innovation. The city’s population, now close to 19,000, has grown by 35 per cent over the past seven years. That’s 4.4 per cent per year, well above the annual provincial growth rate of 2.5 per cent over the same period of time. In Fort Saskatchewan, where the median age is 36 years, approximately 35 per cent of residents have a college or university education; more than 50 per cent of Fort residents have some form of post-secondary education when trades certificates and diplomas are included. The city’s labor force participation rate stands at nearly 74 per cent. The manufacturing sector represents 17 per cent of the labor force - more than double that of the Edmonton CMA and Alberta economies. There are a number of unique businesses operating in the area, including Sherritt International Corporation, which conducts leading edge research on metallurgical technologies. Other companies include Smith
& Nephew (Alberta), a developer and manufacturer of medical products that fight infection based on nanocrystalline silver technology; and Sulzer Metco Canada, which produces a wide range of nickel-based composite powders for aerospace, power generation and electronics applications, as well as other specialty materials. More than 5,100 employees work in the Heartland, where the largest employer in Fort Saskatchewan is Dow Chemical Canada, with more than 1,000 workers; Sherritt is the second largest employer with 740 employees. The region’s next new mega-project is North West Upgrading’s new bitumen refinery, located near Redwater in Sturgeon
FAST FACTS
ou’ll find land and opportunities available in Fort Saskatchewan, gateway to Alberta’s Industrial Heartland, where light, medium and heavy industry is flourishing. Located just a 15-minute drive northeast of Edmonton, Fort Saskatchewan has been a hub of industrial activity for a long time. It was in the 1950s that Sherritt Gordon opened its doors in the Fort. Soon after, Dow Chemical Canada moved into the city, where it operates a manufacturing site and R&D facility. “There is a long history of Fort Saskatchewan being an industrial centre within the province, in the Capital Region and in Alberta’s Industrial Heartland,” says City of Fort Saskatchewan Economic Development Director, Terry Stacey. Businesses looking for opportunities will find plenty of competitive advantages in Fort Saskatchewan, one of the Capital Region’s most affordable communities. Fort Saskatchewan boasts one of the lowest non-residential mill rates in the Capital Region, with commercial and industrial mill rates that are lower than those in most of the region’s other municipalities. The Fort offers a strong, diverse regional economy, located in close proximity to Edmonton and Alberta’s Industrial Heartland, Canada’s largest hydrocarbon processing region and one of the world’s most sought after locations for petrochemical, chemical, and oil and gas investment. Fort Saskatchewan offers an excellent quality of life, with affordable housing, a small town atmosphere and big city amenities;
City of Fort Saskatchewan
ECONOMIC BUSINESS DEVELOPMENT DIRECTOR: Terry Stacey
T: 780.992.6231 F: ecdev@fortsask.ca WEBSITE: www.fortsask.ca
PROFILER 19
County, 45 km northeast of Edmonton. This will be the world’s first bitumen refinery, combining gasification technology with an integrated carbon capture and storage solution; and the first bitumen refinery to sell C02 for the purposes of enhanced oil recovery. Much of the leading edge research for carbon capture and storage is taking place in Alberta’s Industrial Heartland, Stacey notes. Going forward, Fort Saskatchewan expects to see significant growth over the course of the next decade on a number of fronts. Key drivers of economic activity will include areas such as small business and entrepreneurship, and hydrocarbon processing (bitumen upgrading and refining; other refined products and petrochemicals; using byproducts from bitumen upgrading and refining as a new,
The city’s population, now close to 19,000, has grown by 35 per cent over the past seven years. That’s 4.4 per cent per year. unconventional petrochemical feedstock; petroleum coke, upgrader ‘bottoms’ and syngas for energy generation). In addition, the Fort would like to see more eco-industrial manufacturing services and technology development opening up in the region. As part of Alberta’s industrial heartland, Fort Saskatchewan’s location offers critical advantages to business. Land is available for the development of new buildings and projects, with competitively priced serviced and
unserviced sites. In addition, the Fort has existing buildings that could be used for a variety of industrial and commercial opportunities. Fort Saskatchewan’s competitive business climate, and its affordability and competitive cost structures benefit both businesses and residents. It’s no wonder that new companies are continuing to open up in Fort Saskatchewan. “We are working to help businesses be successful,” Stacey says.
20 PROFILER
df dfboiler boiler tube industries tube industries Proud to be an Alberta-based supplier for 15 years bends, membrane tube, welding test coupons, pipe, fittings and valves. df Boiler Tube provides repairs, alternations and fabrication under ABSA, as well as under Saskatchewan TSSA. It is also certified to Canadian Welding Bureau (CWB) Regulation W 47.1, and can design and register fittings under the Canadian Registration Number (CRN) registration of fittings. This past year, df Boiler Tube added a new Quality Control Management System to help it maintain its consistently high standards. df Boiler Tube is available 24 hours a day, which means that when you have an emergency, it’s ready and able to respond immediately. df Boiler Tube will find what you need to keep your business running. Your business needs our help when you are faced with operational downtime. At df Boiler Tube, the company’s expertise gets you back up and running, with some of the fastest turnaround times in the industry. df Boiler Tube is a 24-hour-a day, 365-day-a-year operation, and is just one call away for all of your emergency and product sourcing needs. Whether it’s getting a supplier to open in the middle of the night or hiring a charter flight, df Boiler Tube is ready, willing and able. What allows df Boiler Tube to respond so rapidly are the mills, fabricators and manufacturers that the company has qualified under its stringent Quality Control management program. These subcontractors, vendors and suppliers understand the meaning of service and are willing and able to provide df Boiler Tube with some of the fastest turnaround times in the industry. df Boiler Tube’s associations and partnerships have been forged over the last 15 years of servicing industry, which has enabled it to provide service and quality that is second to none, from simple supply to complicated logistics.
df Boiler Tube’s strong reputation is the main reason that Michigan Seamless Tube & Pipe (MST)—a leading manufacturer of carbon and alloy seamless cold-drawn pipe and tube for more than 80 years—recently gave df Boiler Tube a master distributorship in its high-quality piping products. Through this exclusive partnership, df Boiler Tube becomes a master distributor of MST’s SA 106 Grade B/C pipe products in Western Canada. df Boiler Tube will help distribute and promote MST products, which are used in a wide range of applications, including oil and gas extraction, refineries, nuclear, military and solar. As a master distributor of MST products, df Boiler will be better equipped to serve the industries within its current customer base. df Boiler Tube envisions continued controlled growth by servicing each customer’s unique requirements. And the company is always looking for the best and the brightest service-minded team members. The people it hires are very important. It is the type of people it attracts that make df Boiler Tube as successful as it is.
FAST FACTS
Boiler Tube Industries provides superior pressure products and services to customers across North America and beyond. df Boiler Tube prides itself on ensuring that every customer receives exceptional service. It is a premier supplier, with a mandate of “Service & Quality Second to None.” This means that when you do business with df Boiler Tube, you can expect peace of mind knowing that df Boiler Tube has your best interests at heart and is ready to respond to any situation, from sourcing right through to delivery. df Boiler Tube is your one-stop shop. It is recognized as a leader throughout North America and as far away as Australia. When you conduct business with df Boiler Tube, you know you are conducting business with a company that takes its job seriously. On Oct. 1, 2012, df Boiler Tube will celebrate a major milestone, marking its 15th year as a supplier in Alberta. Founded by Danny Fiala in Edmonton, df Boiler Tube has become a premier service-oriented boiler tube, plate and pressure parts supply company, gaining a reputation throughout North America as the go-to place for hard-to-find pressure components. Its client list includes some of the largest companies in the oil and gas, petrochemical, electrical power generation, agricultural and mining industries in North America and worldwide. df Boiler Tube works with more than 100 manufacturers, fabricators and steel mills to provide unparalleled emergency services. df Boiler Tube has been an audited facility since 2003. It supplies and fabricates pressure components and offers ASME Code Materials. The company procures boiler and pressure-related components from more than 100 qualified mills, manufacturers and suppliers from across North America and Europe. The company supplies pressure components including plate, tube, tube
COMPANY NAME: df Boiler Tube Industries
T: 780.472.0235 F: 780.478.5361 WEBSITE: www.dfboilertube.com
df Boiler Tube DISTRIBUTING MST PRODUCTS Edmonton, Alberta, April 1, 2011 - df Boiler Tube is pleased to be representing MST Seamless Tube & Pipe by entering into an exclusive agreement to bring their high-quality seamless piping products to Western Canada. This new partnership appoints df Boiler Tube as a master distributor for Western Canada meaning they will stock, distribute and promote MST products such as MST’s SA 106 Grade B/C piping, ensuring availability for immediate shipment. MST is strongly committed to customer satisfaction and providing df Boiler Tube with superior service and products that are highly regarded worldwide. MST’s dedication compliments df Boiler Tube’s own philosophy of guaranteeing exceptional service and thus ensuring their customers can easily move ahead with their projects. Through this partnership, df Boiler Tube has enhanced their ability to service many industries as the SA 106 Grade B/C pipe products are used in numerous applications such as nuclear, military, solar, reneries and oil and gas extraction. ABOUT df Boiler Tube df Boiler Tube was founded by Danny Fiala in 1997. In the 14 years plus since opening their doors, they have become the premier service oriented boiler tube, plate and pressure parts supply company. Through consistent and thoughtful growth they have gained a
SEAMLESS TUBE & PIPE
reputation throughout North America as the place to nd the “hard to find” pressure components. They work with over 100 manufacturers, fabricators and steel mills to give unparalleled emergency and ongoing service. For more information, visit www.dfboilertube.com. ABOUT MST For over 80 years, MST Seamless Tube & Pipe has been the leading manufacturer of carbon and alloy seamless colddrawn pipe and tube for a variety of industry applications, including aircraft and aerospace; mining and construction; automotive; and agriculture. The company operates a 320,000 sq. ft. manufacturing facility on 60 acres in South Lyon, Michigan, where every pipe and tube meets today’s world-class, global standards. Because of its size and capabilities, MST can be extremely exible and provide fast set up and quick turnaround on all orders whether they’re large or small.
df Boiler Tube Industries 11653-163 Street Edmonton, AB T5M 3W6 Phone: 780-472-0235 Fax: 780 478-5361
22 PROFILER
GOVERNMENT OF YUKON GOVERNMENT OF YUKON
Yukon’s Oil and Gas Advantage
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oil and gas industry with a clear and consistent regulatory process throughout Yukon. Building on the certainty provided by 11 First Nations with settled land claims, the Yukon government is working with Yukon First Nations to develop a solid foundation to encourage resource development and ensure that Yukon is pipeline-ready. To foster this potential growth, Yukon holds an oil and gas disposition process twice a year. This fall’s Request for Posting is accepting requests until July 13, 2011. Dates for future disposition deadlines are available through the Yukon government’s website, listed below. Offshore oil and gas development is also receiving an optimistic outlook, with prospective pipeline development expected to further spur the renewed interest over the last few years in the Beaufort Sea. Since 2007, nearly $3 billion was bid for offshore rights in the Beaufort Sea, largely by BP Exploration, Imperial Oil/Exxon Mobil and ConocoPhillips. Yukon and the federal government signed an MOU in 2008, which outlines Yukon’s enhanced role in offshore oil and gas management. The MOU provides the opportunity for Yukon to be actively involved in many aspects of Beaufort Sea activity. “Those within the oil and gas sector looking to take advantage of investing in northern resources should take a close look at Yukon,” said Minister Rouble. “Yukon’s oil and gas future looks bright.”
FAST FACTS
ecent developments in the North’s oil and gas sector has Yukon’s emerging industry poised to flourish, offering investors many opportunities to secure resources for a bright future. Boasting a rich potential for resources, Yukon’s eight onshore oil and gas basins are estimated to hold 17 trillion cubic feet (Tcf) of gas and 800 million barrels of oil. Yukon’s offshore potential in the Beaufort Sea is even more impressive with an estimated 40 Tcf of natural gas and 4,500 million barrels of oil. Yukon is facing unprecedented growth in demand for energy from new mines and base loads on the electrical grid, resulting in increased opportunities for energy generation in the coming years. The development of Yukon’s natural gas resources is one of the solutions to this situation, and is identified as a priority action item of Yukon’s Energy Strategy. Yukon’s natural gas resources are sufficient to meet Yukon’s pending energy needs with clean, cost-effective and reliable energy for many decades. Yukon also supports the Mackenzie Gas Project (MGP) and Alaska Highway Pipeline Project (AHPP) as key components to address Yukon’s pending energy gap and to provide access to market. Proceeding with the development of Yukon gas reserves to service Yukon markets could serve to ‘pre-build’ much of the required infrastructure to take
advantage of the MGP and AHPP when they are eventually built. “Developing Yukon’s natural gas resources to meet this demand will stimulate the economy, open up our basins and create a tremendous opportunity for industry,” says Yukon’s Energy, Mines and Resources Minister Patrick Rouble. The Alaska Pipeline Project (TransCanada/ ExxonMobil) completed its ‘open season’ and continues to negotiate with potential shippers. TransCanada also completed winter field work in Yukon and has plans for summer field work as well. The project would deliver 4.5 Bcf to 5.9 Bcf of gas per day to southern markets. A pipeline along the Alaska Highway also has the potential to act as a conduit for Yukon natural gas. North America’s oil and gas industry as a whole stands to benefit from this massive project and Yukon continues to work to ensure it is ready for when the pipeline comes. Adjacent to Yukon, in the Northwest Territories, Imperial Oil is leading a consortium of companies in their proposal for the Mackenzie Gas Project. If completed, the project has the potential to assist in opening Yukon’s six northern basins, containing an estimated 12.7 Tcf of natural gas. In March, 2011, the National Energy Board issued a Certificate of Public Convenience and Necessity for the project, and the proponents will now determine whether the project is commercially viable. They have until December 2013 to signal intent to act on their Certificate. “Yukon believes the market will support the development of both northern pipelines,” said Rouble. “The Yukon government endorses both projects, seeing them as pivotal to accessing northern gas and driving future economic development in the North.” Bolstering Yukon’s oil and gas industry is a regulatory framework that offers certainty, stability, transparency and simplicity. Since 1998, when the Yukon government took over oil and gas rights management from the federal government, Yukon has focused on developing a competitive oil and gas regime under Yukon’s Oil and Gas Act. This regime is strengthened by the ongoing work with Yukon First Nations to provide the
W GOVERNMENT OF YUKON OIL AND GAS RESOURCES BRANCH
EXECUTIVE DIRECTOR: Brian Love
T: 867.667.3427 E: oilandgas@gov.yk.ca TOLL FREE: 1.800.661.0408 WEBSITE: www.yukonoilandgas.com
Y N ( t a r d
YUKON OIL & GAS
PROFILER 23
Seize the Opportunity! Beaufort Sea
Yukon Sedimentary Basins roads
World Class Potential
World Class Opportunity
Yukon has eight sedimentary basins rich in potential. Natural gas potential is estimated at 17 trillion cubic feet (Tcf) and oil potential is estimated at 800 million barrels. In the Beaufort Sea offshore, natural gas potential is 40 Tcf and oil potential is 4,500 million barrels. Onshore, these resources remain virtually untapped; northern pipeline development would change that.
The Mackenzie Gas Project would bring north Yukon gas to market. The Alaska Highway Pipeline Project would provide market access to gas resources from southern Yukon. Largely unexplored and rich in potential, it’s time you considered the Yukon. Take advantage of our semi-annual disposition of oil and gas rights.
Energy, Mines and Resources
Website: yukonoilandgas.com > Email: oilandgas@gov.yk.ca
IHS
24 PROFILER
Investing in Canadian customers
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ustomers rely on IHS to offer high-quality energy information and decision-support solutions they need to make effective business decisions in an increasingly dynamic environment. To ensure we continue to provide the level of quality our customers have come to expect, we’ve launched a $10 million initiative to reinvest and enhance our Canadian energy information and products based on customer feedback. Customers can follow our progress via a special website located at www.followIHS.com.
We’re listening — and we’re making changes It’s one thing to hear your customers’ feedback; it’s another to listen to it and then do something about what you’re hearing. This is at the core of what IHS does. We take customer feedback and recommendations and use this information to create quality goals for us to achieve. Our Canadian energy customers have asked IHS for several improvements: increased efficiency when working with IHS AccuMap®, our leading oil and gas mapping, data management and analysis software; better workflow integration between IHS solutions; higher quality energy information; and increased access to IHS subject-matter experts. And since putting the plans in place in September, we’re already making progress in delivering in each of these areas.
A leading solution made even better For many Canadian energy companies, AccuMap is their go-to resource. AccuMap provides desktop access to numerous IHS databases, letting users work through a play from discovery to production within one application. We’re now making AccuMap even better by adding new functionality and improving usability. We recently added new decline analysis functionality, helping users quickly and easily assess reserves, maximize well production through accurate economic and reservoir analysis, and produce supporting documentation. Furthermore, we’ve worked with IHS partner Geomatics Data Management (GDM) to develop a set of new and enhanced pipeline and facility AccuMap data cards. The
first AccuMap data cards to leverage a more modern framework, these cards also feature enhanced GDM information. Other changes we’ve made are designed to ensure information displayed in AccuMap is consistent with information found in other IHS applications. But most importantly, we’ll be rolling out a new AccuMap map, query and user interface in the near future.
Better support for customers’ workflows Because customers working with IHS information don’t want to switch applications and disrupt their workflows, we’re focused on increasing application and platform integration. One of our achievements came with the recent integration of three popular products: IHS PETRA®, our reservoir analyses solution; IHS PetraSeis®, which enables 2-D and 3-D seismic interpretation of well data; and IHS GeoSyn™ for Geological Modeling, a synthetic generation, AVO analysis and 2-D modeling package. By integrating these offerings, we’ve created a seamless and complete geological and geophysical workflow solution that enables interpretation, synthetics and seismic modeling, and eliminates the need to move data between applications using flat files during the seismic workflow. Coming soon, you’ll hear about how we’ve refined and simplified our AccuMap and PETRA integrated workflow, setting up a smooth transition between the products so as not to interrupt the steps needed to perform critical tasks. Users will be able to create queries and maps in AccuMap using IHS quality information and then launch PETRA directly from AccuMap to view and further analyse the information.
Continually improved energy information IHS continues to be unmatched in terms of the investment we’ve made in our information, our historic coverage and the depth and breadth of our data. To ensure we deliver high-quality information, we’ve developed our own process for transforming raw data into energy information that is correct, current, complete and consistent. Still, there’s always room for improvement. So when customers told us that they wanted even higher quality information, we took action.
FAST FACTS
IHS
COMPANY NAME: IHS
T: 403.770.4646 E: sales.cdn@ihs.com WEBSITE: www.followIHS.com
We’ve kicked off an 18-month project to increase our well and curve coverage in core exploration and development areas. We anticipate adding over 200,000 curves to the database. Once this project is completed, we expect to have the industry’s largest and most complete well log offering. The GDM Oil & Gas Pipeline Network, a new offering currently in development, will leverage our data to provide the industry’s first comprehensive network of wells, pipelines and facilities. It will help companies understand their current and historical pipeline inventory and better manage it from a regulatory, environmental and maintenance perspective.
Increased access to IHS experts IHS information and analytical tools are chosen by industry leaders because they’re created, managed and maintained by a team of energy information experts. With requests for access to those experts increasing, we’re offering numerous ways for customers to connect with and learn from our employees. In recent months, we’ve created the IHS Customer Advisory Group — a team of IHS subject-matter experts dedicated to helping customers address information issues. The team works closely with IHS Customer Care, senior subject-matter experts, product management and industry organizations to solve information issues for our customers. Customers also can post questions about IHS information and analytical tools at the expanded IHS Online User Community, monitored by the Customer Advisory Group, IHS product managers and IHS Customer Care.
Follow our progress To learn more about the improvements we are making to our Canadian energy information and solutions, please visit www.followIHS.com or contact sales.cdn@ihs.com.
26 PROFILER
MINIMAL IMPACT MINIMAL IMPACT M
inimal Impact is a privately owned Canadian oil and gas service company that is committed to providing exceptional customer satisfaction. Along with conventional drilling, one of Minimal Impact’s specialties is horizontal directional drilling, servicing B.C., Alberta and Saskatchewan. Minimal Impact specializes in a full range of directional drilling services for the oil and gas, telecommunications, electric, water and sewer industries, providing pipe installations for the most challenging and environmentally sensitive projects.
“ No job is too small or too big. We have pretty much conquered everything from a two-inch pipeline to a 42-inch pipeline. We offer a turnkey package.” — Chris Turner, Business Development Manager, Minimal Impact
Minimal Impact Air Drilling Service Minimal Impact Air Drilling Service is an environmentally sound solution to directional drilling, ideally suited for sensitive environmental installations in fractured formations, loose soils, and other challenging geological
FAST FACTS
COMPANY NAME: Minimal Impact
Business Development Manager: Chris Turner
formations. The Air Drilling System uses pneumatic percussion tools similar in concept to a jackhammer, but it operates at a higher frequency — as high as 2,200 beats per minute. Powered by high volume air pressure, the Air Drilling System does not use drilling mud, as do conventional drilling techniques. Instead, it introduces a minimal amount of water – two to four gallons per minute (seven to 15 litres per minute) into the air stream, for transmitter cooling, hammer lubrication, dust suppression and hole cleaning. The air acts like a continuous supply of mud, but does not impact the environment, nor does it need to be cleaned up or disposed of afterward. “It’s very environmentally safe,” says Minimal Impact Business Development Manager, Chris Turner. “It’s minimal. You are only using two to four gallons a minute, as opposed to 250 to 500 gallons a minute, which is what is normally used in conventional mud motoring.” The Minimal Impact Air Drilling Service delivers a significant increase in rock penetration, compared to conventional rock systems. It also brings increased production in a wider range of conditions than is possible with conventional drilling methods, yet without the same negative environmental impact. Minimal Impact Air Drilling Service lessens the number of drilling conditions that could be considered difficult or unfeasible for horizontal directional drilling. While drilling rock is still more difficult and time-consuming, these tools are much more efficient than conventional drills in these types of situations. Thanks to Minimal Impact Air Drilling Service, installations that would have been considered impossible just a few years ago, can now be considered routine. Minimal Impact is set up for all sorts of horizontal directional drilling assists. All of Minimal Impact’s rigs are now set up to do air drilling, which works very well in hard rock applications and in tough ground formations, Turner says.
T: 403.993.6142 E: minimalimpact@telus.net cturner@minimalimpact.ca
WEBSITE: www.minimalimpact.ca
Minimal Impact Pipeline Installation The largest civil trenchless contractor in Western Canada, Minimal Impact offers over 100 years of combined experience in providing trenchless pipeline construction services, and has developed the most environmentally
friendly pipeline construction methods available on the market today. “No job is too small or too big. We have pretty much conquered everything from a two-inch pipeline to a 42-inch pipeline. We offer a turnkey package,” Turner says. This cost-comparative construction alternative allows producers to dramatically reduce their operational and carbon footprints, and minimize environmental impact. Minimal Impact, whose goal is to be the foremost provider of innovative trenchless solutions and value for clients, is continuing to raise the bar for environmental excellence through its trenchless technologies. By offering economic, minimal impact horizontal directional drilling and six-metre narrow right-of-ways, the company works hard to lower its clients’ carbon footprint. Minimal Impact is committed to protecting the environment and to building in safeguards that will continue to protect a project long after it is complete. With experience, versatility and environmental sensitivity in all types of soil and project conditions, Minimal Impact’s professionals will discuss, identify and develop plans to assure that clients’ goals are achieved.
A Trenchless Service Provider A multi-faceted company, Minimal Impact’s goal is to be the safest, most productive, innovative, reliable and cost-effective trenchless service provider in Western Canada. Headquartered in Spruce Grove, with satellite offices in Crossfield, Hinton, Whitecourt and Grande Prairie, Minimal Impact specializes in innovative trenchless solutions, with innovative trenchless technologies that align its construction procedures with oil and gas environmental best practices.
PROFILER 27
Minimal Impact. Maximum Preservation.™
Drilling services include: Installation of steel and composite pipes, up to 54 inches in diameter; Installations under water ways, wetlands, environmentally sensitive areas and congested urban envi ronments over one km in distance, using conventional drilling meth ods; and up to t wo - and - a - half km using intersect technologies.
Other key services include:
· Minimal impact construction services · Minimal impact pipeline construction · Intersect crossings · Parallel installations and crossings · River crossings · Underground intersects · Wetlands and water crossings · Roadway and utility crossings · Slope and obstacle crossings · Harmful Alteration Disruption or Destruction repairs to water crossing
· Shore approaches and outfalls · Harbour crossings · Pipe ramming · Pipe bursting · Slip lining · SAGD maintenance · Trenchless pipeline rehabilitation and maintenance
· Watercourse open cuts · Slope stabilization · Geotechnical · Crossing design
NEOTEC 28 PROFILER
NEOTEC
Streamlining workflow with Neotec
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have the same production challenges that any offshore system will have.” For example, prior to implementing a pigging operation, transient simulation of a multiphase pipeline will allow a more detailed assessment of operational risk, debottlenecking, and system capacity constraints by providing an understanding of liquid holdup in the system and how that liquid travels through the system during pigging. Aside from the potential safety and capacity issues, this will also allow the user to define a more efficient pigging schedule. In addition, multiphase transient issues such as liquid loading, common in gas production wells, can be better understood, and production optimized by using transient simulation to qualify and develop alternative operating scenarios. SPT Group has dedicated considerable effort to focus on workflow, in order to make life easier for the end user. It has built a workflow that allows direct communication from its steady-state PIPEFLO product into OLGA, SPT’s dynamic simulation tool for transient flow modelling. “By building this workflow, we’re trying to encourage industry to think in different terms than they might have done historically,” Smith says. “There is continuity from steadystate design and conceptual work, into the detailed design and operational considerations that can be handled with transient simulation. As a result of the acquisition, we have been able to tighten the connection between our existing products and create new ones.” One of SPT Group’s new products is PIPEFLO Dynamic, which pulls some of the traditional dynamic capabilities from OLGA into the steady-state workflow. Released last October, PIPEFLO Dynamic combines elements of both of these technologies to create something new and even more accessible. In the post-Macondo era, Smith notes, there is a real focus on clearly understanding downhole safety issues, and planning to avoid or address challenging situations. Similarly, contingency planning is taking on a new and greater urgency. SPT Group is focused on building the workflow necessary to support the requirement to address these considerations.
These solutions provide valuable input, primarily to the engineering design of planned operations, but also for effective planning regarding concerns with respect to safety and the environment. SPT Group products that can be used for such work include; Drillbench (dynamic drilling and well control), OLGA ABC (Advanced Blowout Control), WELLFLO (steady-state production and drilling), and OLGA for Wells (dynamic production simulation). Much of the focus, post-acquisition, has been on streamlining workflow to make the best possible tools available to users, with as few challenges as possible. As a result, workflow efficiencies are greatly enhanced. “One of the greatest factors is the time savings in the model building that needs to be done by the user,” McCarthy says. “We have been told by clients that sometimes, when having to rebuild a model in a different tool (moving from steady-state to dynamic simulation) the effort can amount to man-months of additional work. Being able to export files and share data will provide significant savings in time, and reduce the likelihood of errors being introduced when you are rebuilding models.” SPT Group’s mission is to deliver unique solutions to increase the value of their clients’ oil and gas projects. “We are very solutionoriented,” Smith says. “Whatever challenges companies are facing with their flow systems, be it downhole in wells or in surface pipeline systems, we are here to work together to help them solve their problems.”
FAST FACTS
PT Group provides a complete and unique platform for flow simulation technology and competence, with essential steady-state and dynamic software tools for optimizing oil and gas production systems, from design through to operations. In February 2010, Calgary-based Neotechnology Consultants (Neotec), a longstanding provider of leading global steadystate multiphase flow modelling software, was acquired by SPT Group of Norway, the world leader in dynamic flow modelling. The acquisition was intended to take full advantage of the close synergies between the two companies, says SPT Group Senior Vice President Steady-State, Steve Smith. SPT Group, which is focused on dynamic multiphase flow simulation, provides software with a time-dependent element - which is a technical step beyond steady-state flow modelling. Now, the integrated company offers a unique blend of products and services. “There is no other company that can offer the breadth of flow modelling and simulation that we can,” Smith says. “As a result of this acquisition, SPT Group now has a Calgary office that offers a full suite of products, from steady-state through to dynamic,” adds Tena McCarthy, Sales Manager, Canada and Alaska. “Historically, we had only been offering steady-state solutions. We are now able to support the full dynamic portfolio including services, to our client base.” In addition to its Calgary office, SPT Group operates nearly a dozen offices globally, all of which have the capacity to deliver full steadystate to dynamic solutions, with both software and services. “One of the benefits of bringing the two companies together is that we have opened up a much broader capacity in the Canadian market,” Smith says. In its other offices as well, SPT Group has extended its reach: it can now offer the software previously developed by Neotec, as well as the services that accompany them. “Particularly in Canada, we see this as a strength. Our experience to date is that the onshore market has not yet widely adopted multiphase dynamic simulation, yet their systems
COMPANY NAME: Neotec
T: 403.277.6688 F: 403.277.6687 WEBSITE: www.sptgroup.com
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T c a
S m s a D W v d
P b s b s s
F in
Bridging the gap between Steady-State and Dynamic solutions World leaders in steady-state and dynamic modelling The highly skilled professionals of SPT Group have a common goal of bringing state-of-the-art competence and technology to our customers. SPT Group is the world leader in steady-state and dynamic modelling for the oil and gas industry providing a range of software and consulting services within multiphase flow and reservoir engineering. We develop and market OLGA®, Drillbench®, MEPO®, OLGA® Online, PIPEFLO, PIPEFLO Dynamic, WELLFLO and FORGAS; products and solutions that maximize value for engineering and operations through the entire field development lifecycle. Providing practical expertise from our services group and bringing our technology into a dynamic on-line production support system plays significant roles in the SPT Group business model. This maintains the communication between software users and developers - conveying practical understanding of market demand. For more information: +1 403 277 6688 info@neotec.com / www.sptgroup.com
SPT Group provides highly skilled professionals worldwide to support development and engineering services within multiphase flow and reservoir engineering.
30 PROFILER
World-wide weather protection and construction solutions
B
ased in Edmonton, Alberta, Norseman Group is a world leader in supplying the oil and gas industry with weather protection and construction solutions to meet customers’ demanding needs. Committed to safety, quality and service, Norseman is the preferred supplier to many companies in the oil and gas industry, selling its products worldwide, with customers throughout North and South America, Russia, Kazakhstan, Europe and Africa. “When it comes to supporting severe weather operations, we are the go-to company,” says Norseman Group of Companies VP Marketing, Mark Mascotto. Norseman Group, through its subsidiaries Norseman Inc. and Norseman Structures Inc., has been in the fabric structure business since 1921, when it started as a manufacturer of outfitter and exploration tents. Norseman has been manufacturing and selling building enclosure systems since the 1960s, and was
already a major supplier of fabric building and drilling rig enclosure systems to the oil and gas and commercial markets. Since those early days, Norseman has expanded to support the oil and gas industry with an extensive product line, ranging from drilling rig enclosure systems to portable fabric buildings for warehousing, workshops, plant enclosures and general storage purposes. The company manufactures its products in 200,000-plus square feet of quality-controlled facilities in Saskatoon, Edmonton, Calgary, Langley and Toronto. Norseman Structures Norseman Structures, a subsidiary of Norseman Group, is a world leader in the steel-framed, fabric-covered building industry. Norseman Structures, which manufactures engineered fabric membrane structures, offers a broad product
FAST FACTS
NORSEMAN NORSEMAN GROUP GROUP
COMPANY NAME: Norseman Group
VP MARKETING: Mark Mascotto
T: 1.800.268.1918 F: 780.452.2334 WEBSITE: www.norseman.ca
line, an extensive distribution network and the largest manufacturing capa city in the industry. A Norseman Structure provides an affordable alternative to conventional construction techniques and is a low environmental impact building solution engineered to be permanent, but designed to be relocated. “This is a very popular product for a number of reasons. We provide a very fast delivery, quick installation and relatively low-cost alternative to standard forms of construction,” Mascotto says.
PROFILER 31 These buildings are ideal for a wide range of uses. In Western Canada, Norseman’s portable fabric buildings are used extensively in the oil sands, as well as in many other oil and gas and industrial applications. For instance, they are a popular storage choice for waste recycling plants, mining operations, equipment storage or salt storage, where leaching into the ground could be an issue. Other uses for Norseman’s portable fabric buildings worldwide include everything from event and recreational centres to warehousing, bulk storage, and dairy and livestock barns. Norseman Inc.: Construction Solutions Another Norseman Group subsidiary, Norseman Inc., sells large construction site enclosure and wind panel systems, which allow companies to operate in a more comfortable environment, sheltered from the elements. The same system can be used at large construction and building sites during the winter. Norseman is now looking to extend this line to a next-generation product that actually generates its own heat. Coming Fall of 2011, this new product is designed for situations where it isn’t practical to have large industrial heaters pumping out hot air. This product applies heat to specific areas where users must maintain a set temperature. Norseman Inc.: Industrial Foam Solutions Norseman Inc. is also one of the largest, most technologically advanced custom foam manufacturers in North America. Norseman’s industrial foam solutions include Thermal Expansion Boxes (TEBs), a product that facilitates pipeline expansion and contraction and is made from laminate layers of specialty foam panels. TEBs are built for critical points of a pipeline, where pipe expansion due to pressure and heat can exert considerable stress. TEBs protect the pipe by allowing movement into a resilient material. Although Norseman has successfully been providing TEB solutions for almost 15 years, the product was officially launched within the past two years. “It has been a very popular product,” Mascotto says. Another Norseman specialty foam solution is Nordic Void Form. Nordic Void is designed for use underneath large concrete pours, where ground heave in areas of expansive soils can damage footings and the integrity of large concrete foundations. “Our solution has much better long-term integrity than traditional void products like regular EPS board, essentially styrofoam,” Mascotto says, noting that large oil sands infrastructure projects are using Nordic Void and its compressive and hydrocarbon resistant properties to mitigate the impact of ground heave over extended periods of time. “Products like styrofoam have no ability to recover from compression after even one frost-thaw cycle,” states Mascotto. “Compounding this, traditional styrofoam products also break down rapidly in hydrocarbon-rich soils like those found in the oil sands, jeopardizing structures which require long-term integrity of the foundation.” Outperforming for 85-Plus Years For more than 85 years, Norseman has prided itself on its reputation for manufacturing quality solutions that outperform conventional products in many ways. High quality, integrity, designing the right solution for customers’ needs and delivering what’s promised year after year : these are some of the reasons customers turn to Norseman. “We’ve proven we can deliver those solutions to customers throughout our product line,” Mascotto says. “We are the only company in the world who consistently provides all of these things.”
Rig Enclosures • Built to withstand demanding rig site & weather conditions • Innovative and modular designs Visit us at the Gas & Oil Expo booth #1841
1.800.268.1918 www.norseman.ca
32 PROFILER
TOG SYSTEMS
TOG SYSTEMS
Specializing in Remote Communications and Customer Service for the Oilfield
O
utstanding service and quality equipment. This is the driving focus of TOG Systems, which has been active in the oilfield communications industry since 2003. Headquartered near Grande Prairie, TOG has built a substantial customer base across Western Canada, serving more than 50 clients, both large and small. TOG’s original mandate remains clear: to bring a higher level of customer service and communication equipment to the oil industry. TOG continuously works to transcend the harsh conditions of the oil patch, where power requirements are demanding, challenges extreme, weather conditions severe, and working conditions difficult.
Equipment TOG Systems stands behind its equipment, 100 per cent. If clients experience equipment failure which is not the result of misuse, the service call is absolutely free. TOG eliminates hidden or surprise costs by using one convenient daily rental rate, enabling you to budget effectively for your projects. TOG specially designs communication equipment rigorous enough to face the extreme conditions in the oilfield and integrates the needs of the customer with extensive field experience and engineering
testing the whole way through, and because we test in our oilfield environment, we are confident that [our equipment] works.”
— Diane Nordhagen, CEO and owner, TOG Systems
solutions to craft the right solution for today’s challenges. Through this process of collaborating with TOG’s end users and suppliers, TOG Systems has made sure equipment standards have significantly improved. TOG specializes in working with the manufacturer to modify existing equipment for application in the oil industry. Often, these modifications arise from direct customer input. “We offer our clients a variety of solutions to meet the individual needs of the clients,” says TOG Systems owner and CEO, Diane Nordhagen. “We are extremely flexible.” TOG Systems, which manufactures its equipment in Alberta, directs the entire process, right through to CSA approval. “Because we are in control of the quality and testing the whole way through, and because we test in our oilfield environment, we are confident that it works,” Nordhagen says. TOG’s products and services include: • • • • • • • • •
Private & Public Microwave Networks Satellite Systems Wireless Rig Phone Systems Cell Phone Boosters or Cellular Amplifiers Radios Portable Towers Office, Computer and Hardware Packages Cellular Data and Voice Gateways Regular On-site Maintenance
Tailored data and voice packages can be configured to meet the needs of customers in any remote locations. e.g. camps, rigs, plants, etc.
TOG Systems prides itself on its specialized knowledge of the oilfield’s unique requirements, and the company has that knowledge to build and adapt its equipment and ser vices to best meet industr y needs. Looking for ward, TOG is focused on fur ther improving its customer ser vice. “We’ve been for tunate, in that we’ve maintained or increased our grow th, year af ter year,” says Nordhagen, who sees a bright future for TOG. “Our customer base has been expanding steadily, even through this slow turn.” Whatever your communication needs, you can feel confident when dealing with TOG Systems - a company you can rely on.
FAST FACTS
Customer Support Timelines are key and TOG makes it a priority to guard your personnel and projects by eliminating or reducing communication downtime with a quick response dispatch time of one hour, unless otherwise indicated by you, the customer. Immediate customer service is such a priority at TOG that all service calls and requests handled in-house, 24 hours a day, seven days a week. TOG Systems stocks and regularly inspects equipment for timely delivery. Installation and service is provided out of Grande Prairie, Chetwynd and Calgary. All TOG employees are extensively trained, salaried and full-time. This ensures customers receive consistent, knowledgeable, professional service from technicians who work long-term in a primarily seasonal industry.
“ Because we are in control of the quality and
COMPANY NAME: TOG Systems
OWNER/CEO: Diane Nordhagen
T: 780.356.3965 E: info@togsystems.ca WEBSITE: www.togsystems.ca
34 PROFILER
tundra process solutions tundra process solutions Turnkey Solutions Provider is Growing and Diversifying
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undra Boiler & Instrumentation Ltd. is pleased to announce it has changed its name to Tundra Process Solutions Ltd. “We have been growing quickly, and we have outgrown our name, says Tundra’s Chief Operating Officer, Iggy Domagalski. Calgary-headquartered Tundra Process Solutions is now a full process solutions company, offering instrumentation, artificial lift, boilers, water treatment, piping, motors and drives. Established in 1999 by President Dan Peet, over the years Tundra has diversified into a company offering much more than boilers and instrumentation. During the past four years, Tundra has seen strong internal growth, and has evolved into a complete, turnkey solutions provider offering process control equipment for the industrial and commercial markets with a diverse range of products and solutions, along with fully qualified service technicians. Its new name reflects the following additions to the business: • Power Products – Toshiba motors, adjustable speed drives and motor controls; • Artificial Lift – the revolutionary DynaPump hydraulic artificial lift system; • Water Treatment – Veolia, HPD and Whittier Filtration water treatment solutions; • Piping – Tri-con pre-insulated pipe and Future Pipe composite pipe
We chose to do a lot of hiring during the downturn - we thought it would position us well for when things turned around.” It seems to have been the right decision, because Tundra has emerged from the economic downturn even stronger than before, providing better solutions to customers and with an even more effective team. Based on the growth it has seen in the past couple of years, the company has expanded its offices, and currently employs approximately 80 people. In addition to its Calgary headquarters, Tundra Process Solutions operates offices in Fort McMurray, Lloydminster and Saskatoon. The company is also in the process of moving into a new 25,000-square-foot facility in Edmonton. Tundra Process Solutions: Your turnkey solutions provider for process control equipment.
FAST FACTS
When the company first opened its doors in 1999, it was as an instrumentation firm known as Tundra Controls. It changed its name to Tundra Boiler & Instrumentation Ltd. in 2007, after acquiring Canadian Boiler Industries, the Alberta supplier of Cleaver Brooks and Nebraska Industrial water tube boiler products. In 2007, Tundra also formed a strategic partnership with Veolia Water Solutions & Technologies, one of the world’s largest water treatment firms. Two years later, Tundra signed a distributor partnership with Toshiba Power Products for Toshiba’s low and medium voltage motors, adjustable speed drives, motor starters and custom control gear. In order to bring a stronger focus to upstream oil and gas, Tundra linked up with well optimization specialist, DynaPump Inc. of Texas, which produces a revolutionary hydraulic artificial lift system that uses less power than a conventional pump
jack, yet at the same time can produce more oil. The units weigh less, are more energy efficient, and cost less, with greater lifting capacity compared to conventional rod lift systems. “It also really helps reduce downtime,” Domagalski says. A U.S.manufactured product, DynaPump has seen stellar results since Tundra introduced it to the Alberta marketplace. As just one example, more than a year ago, Tundra installed a couple of DynaPump units on two wells owned by a major oil producer. These problem wells had previously been experiencing significant downhole issues, requiring a workover rig to come in every two months. Since Tundra installed the DynaPump units, the wells have been operating smoothly, with zero workovers required - and the DynaPump units are still going strong. Tundra has expanded into piping with key partnerships. For example it distributes and represents Future Pipe composite pipe and Tri-con pre-insulated pipe. Tundra also specializes in water treatment solutions. For instance, it is providing oil sands producers with water treatment evaporators and boilers, offering a unique boiler and water treatment combination for in situ oil sands operations. Its water treatment and steam generation solutions use a unique technology featuring water recycling and reuse, which allow a significant reduction in water use, when used in combination with its boilers. Tundra also provides oil sands producers with a dedicated project manager, to ensure the process goes as smoothly as possible. It’s just one more example of Tundra’s dedication to providing a complete solution for its customers. Tundra is constantly adapting to the market’s changing needs, and the company plans to continue expanding in order to better serve its customers. “It seems like Alberta has come out of any slump it was in,” Domagalski says. “Things seem to be going pretty well. We hired some great people and got some really great product lines when times were tough, and it put us in a good position; it allowed us to continue growing.
COMPANY NAME: Tundra Process Solutions
KEY CONTACT: Iggy Domagalski, C.O.O.
T: 403.255.5222 F: iggyd@tundrasolutions.ca WEBSITE: www.tundrasolutions.ca
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WE’VE OUTGROWN OUR NAME
Tundra Boiler & Instrumentation is now: TUNDRA PROCESS SOLUTIONS LTD. Instrument & Valve Solutions
Power Product Solutions
Steam Generation and Water Treatment Solutions
Artificial Lift Solutions
Pipe Solutions
We Are Your Total Solution!
NEW World Class Solutions Proudly Represented By Tundra: Specialised Detection, Diagnostic & Measurement Solutions
Coriolis, Vortex, Mag, Ultrasonic Transmitters, Pressure, Temperature, Analytical, Wireless
Hydraulic Artificial Lift Systems
Wedge, Venturi, Flow Nozzles, Orifice Plates
Calgary Office Ph: (403) 255-5222 | Fax: (403) 253-4448 7523 Flint Road SE, Calgary, AB T2H 1G3 Edmonton Office Ph: (780) 482-3444 | Fax: (780) 451-6422 11203 186 Street, Edmonton, AB T5S 2T7 new 25,000 sq ft facility!
Adjustable Speed Drives, Motors, Motor Controls, Engineered Panels
Industrial Pumps
Comprehensive Water & Wastewater Solutions
Pre-Insulated Pipe
Online Corrosion Monitoring
Composite Pipe
Fort McMurray Office Phone: (780) 381-6008 212, 401 Athabasca Avenue, Ft. McMurray, AB T9J 1H1 Saskatchewan Office Phone: (306) 260-9818 | Fax: (306) 384-6288 531 Centennial Drive North, Martensville, SK S0K 2T0 www.tundrasolutions.ca
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Xtend Energy Services Xtend Energy Services
Specialists in Extended Reach Horizontal Drilling
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tend Energy Services offers innovative, customer-driven solutions to overcome the challenges associated with drilling long-reach horizontal wellbores. Xtend’s unique products and complementary services lead to substantial increases in horizontal drilling performance and capacity. Active company co-founders Larry Comeau and Brian Schmidt established Xtend Energy Services in 2003 with a mandate to develop cost-effective technology to mitigate the effects of friction in deviated and horizontal oil and gas wells. Xtend Energy quickly developed and brought to market the Xciter, a variable frequency vibration tool that can be used in close proximity to directional bottom hole assemblies (BHA). The Xciter is a robust, user-friendly tool added to the drill string to enhance slide and rotary drilling performance under the most challenging wellbore conditions. It is designed to mitigate the effects of wellbore friction, enabling faster drilling. The tool uses a positive displacement motor (PDM) to rotate multiple-sized masses to Xcite the drill string, which assists in breaking the static friction
associated with slide drilling in the build and horizontal sections of the well. It achieves amplitude and frequency control by changing flow configuration within the tool. Optimum placement of the Xciter in the drill string is determined by a combination of torque and drag analysis and charted historical performance. Xciter connections are compatible with all standard drill strings. The Xciter operates with conventional fluid or two-phase flow and it is compatible with EM, measurement while drilling (MWD) and logging while drilling (LWD) equipment. The first Xciter prototype was tested in the spring of 2004, and was rapidly accepted by the Western Canadian energy industry due to its many strengths.
Enhanced ability to achieve desired build rates; Better control of weight on bit (WOB) extends drill bit life and, in many cases, reduces the number of bits required to reach projected depth; Enhanced tool-face control results in reduction of orienting time; Reduced tripping time due to fewer pipe swaps or bit changes; Reduces or eliminates stick/slip; Longer horizontal sections; Faster connection times;
Benefits include: Minimal pressure drop. Increased rate of penetration (ROP) while sliding in directional wells, build sections and horizontal sections; and effective weight transfer to bit, resulting in improved tool-face control;
While a multitude of variables can exer t a significant influence on overall drilling per formance, the two most impor tant variables, in relation to the
PROFILER 37
Xciter’s optimum per formance, are pump rate and the Xciter’s position in the BHA. Proper positioning of the Xciter in the BHA is the most critical factor in ensuring the tool’s optimum per formance. The closer the Xciter is
FAST FACTS
COMPANY NAME: Xtend Energy Services
T: 403.995.9739 F: 403.995.9738 WEBSITE: www.xtendenergy.ca
positioned to the BHA, the better the drilling per formance. Over the past few years, wellbore tor tuosit y has increased signif icantly due to increased leng th, sidetracks and wellbore trajector y. This has not caused a decrease in overall gross ROP—in fact, the opposite has occurred. Analysis indicates the majority of the increase in gross ROPs, in conjunction with increased wellbore tor tuosity, is directly related to increased ROPs while sliding; and the significant time savings, with the reduction or elimination of pipe swaps. The Xciter has also proven to dramatically reduce the chances of becoming differentially stuck. It keeps the drill string moving when slide drilling by Xciting the BHA and a por tion of the drill string. It has enabled longer lateral sections to be drilled without a loss in ROP. On the majority of wells analyzed, the average ROP on both sliding and rotating has been increased.
Xtend Energy is continuing to enhance the tool effectiveness at higher flow rates in the build sections, and to modify Xciter placement in conjunction with amplitude and frequency changes for HZ sections. The company monitors many ongoing drilling operations and provides assistance to the operator as required. In addition, Xtend compiles drilling data to chart trends and anomalies. Xtend Energy is able to draw on this data to suggest modifications to the drilling parameters in order to reduce drilling costs. Based in Okotoks, Alberta, Xtend Energy operates across Western Canada and in the U.S., servicing customers from a shop in Nisku, Alberta, and a shop in Griffin, Saskatchewan. The company, which now boasts more than 80 tools, is continuing on an aggressive growth curve. The business is growing, and as it expands, Xtend Energy is working hard to continue fine tuning the Xciter, making it even more effective.
Cuttings Mobilizer
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Debris Management Tool 1
the ULTIMATE in hole cleaning Designed for maximum performance and easy handling in horizontal or deviated wells, the Cuttings Mobilizer is useful in reducing torque and drag problems by removing cuttings resting on the low side of the wellbore, while strategic placement of clusterite and stabilizer orientation are tailored and built into the tool to assist in reaming operations.
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By keeping the wellbore clear of cuttings, another major benefit of the Cuttings Mobilizer is the reduction of the ECD (equivalent circulating density).
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The Cuttings Mobilizer incorporates the following features: 1 2 5
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* Patent pending
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Short Overall Length: Designed for easy rig floor handling and more cost effective manufacturing and transportation. Conventional Right-Hand Wrapped Stabilizer: Full 360° support minimizes wear to the major diameter of the tool joint and rotor blades. Combination Left/Right-Hand Wrapped Stabilizer: Assists in hole cleaning and moving cuttings and debris during back-reaming operations. Clusterite Covered Leading Edges: Aggressive stabilizer edges break up large hole debris and cuttings but will not affect hole gauge. Cuttings Agitation: Rotor blades lift cuttings off of the low side of the borehole and auger them into the mud flow.
Innovative engineering. Downhole excellence. 403.730.6660 Arrival Oil Tools Inc.
| www.arrivaloiltools.com
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In the Horn River Basin, every hour counts.
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But shaving 23 days off the budgeted 64 day delivery is nothing short of amazing.
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Our recent performance in the Horn River Basin will be tough to beat. Extensive planning between the operator and Calfrac’s team resulted in an unprecedented average of 3.5 fracs/day – a significant advance over industry’s previous record. With just 1.5 hours between stages and zero screenouts, we completed the operation in 41 days – significantly exceeding expectations. All executed with a flawless safety record.
Calfrac. We’re breaking new ground... every day.
www.calfrac.com
For more information, contact: Gary Rokosh P.Eng. Vice-President, Sales, Marketing & Engineering 403-218-7483 Chad Leier P.Eng. Manager, Sales & Marketing 403-218-8180
www.rosenau.org
EXPEDITED SERVICE bETwEEn: Rosenau Transport Ltd. provides transportation services such as LTL, Full Load, Bulk, Hot shots/Express, Consolidation, Overnight service, Decks, Container Chassis, Heated Vans, and Scheduled Delivery throughout several terminals, with a large fleet of modern tractors and modern trailers.
Daily service between:
Brandon • Brooks • Calgary • Chetwynd • Dawson Creek • Edmonton • Fort McMurray • Fort Nelson • Fort St John • Fox Creek • Grande Prairie • Lethbridge • Lloydminster • Medicine Hat • Prince George • Red Deer • Regina • Saskatoon • Sparwood • Swift Current • Tumbler Ridge • Wainwright • Whitecourt
ROSEnAU
TRAnSPORT LTD. 1-877-963-9484
Grande Prairie - Dawson Creek - Fort St John - Fort Nelson - Chetwynd - Tumbler Ridge - Prince George