Profiler Service and Supply Issue - February 2013

FEBRUARY 2013

Service & Supply Issue

Nervous

ENERGY

2013: A year of uncertainty 2013 for service and supply community

PM40069240

Drilling contractors turn over rig stock to meet operator demand for high-efficiency mobile rigs Supply catches up with demand in North American pressurepumping market

MultiStim

Multi-Stage Fracturing

with Removable Ball Seats and Shiftable Sleeves is an innovative completion technology from Logan Completion Systems that is especially designed for producers who are tackling multi-stage fracs. One-trip installation for faster completion times and frac valves with fully removable ball seats post-fracturing — without milling or drilling — reduces well costs, improves production, and maximizes your profits. The key feature of the MultiStim System is the use of the full-bore inner diameter which allows conventional tools to be run after the seats are removed. Cementing, or plugging and perforating operations are not required. MultiStim is suited to extended reach horizontal wells. Sleeves can be selectively opened and closed post-fracturing to allow customized stimulation, testing or production management of the entire wellbore for the life of the well. The MultiStim Fracture Isolation Liner System and MultiStim Cup Frac Tool System (a straddle cup system) are suitable for acid, proppant or energized fracturing operations in all types of formations. Contact us for complete details. www.logancompletionsystems.com

Ball seats successfully retrieved from a recent nine-stage frac 635 8th Avenue Southwest, Suite 850 Calgary, Canada T2P 3M3 403.930.6810 | Fax 403.930.6811

FEBRUARY 2013

FEATURES

5

8

7 5

The new drilling tool box Drilling contractors turn over rig stock to meet operator demand for high-efficiency mobile rigs

7

Under pressure Supply catches up with demand in North American pressure-pumping market

8 Nervous energy 2013: A year of uncertainty for service and supply community

COMPANY PROFILES 13

18

Willy D Boilers www.willydboilers.com

14

Oil Boss Rentals Inc www.oilbossrentals.com

20

Thru Tubing Solutions www.thrutubing.com

NCS Oilfield Services Canada Inc www.ncsfrac.com

16

22

Pajak Engineering Ltd www.pajakeng.com

Infinity Oilfield Services Inc www.infinityoilfield.com

ADVERTISERS’ INDEX OUTSIDE BACK COVER

Calfrac Well Services Ltd www.calfrac.com

INSIDE FRONT COVER

Logan Completion Systems www.logancompletionsystems.com

Cover illustration by Anthony Tremmaglia

PRoFILeRMAGAZINe.CoM

3

EDITOR’S NOTE

PUBLISHER Maurya Sokolon | msokolon@junewarren-nickles.com

Hurry up and wait

C

anada’s oil and gas industry finds itself in a unique situation going into 2013. on one side of the coin, the arrival of extended-reach horizontal drilling and multistage fracturing has opened up the potential to add reserves at a rate not seen in 50 years. operators have spent billions of dollars competing for positions in unconventional oil and gas basins across western Canada, and tens of billions of dollars more exploring and developing this new resource. And the unconventional oil and gas revolution is just beginning, if a recent report on the shale resource potential in Alberta is any indication.

The report by the Alberta Geological Survey, examining six major plays, found there are over 3,400 trillion cubic feet of natural gas in place, 423 billion barrels of oil and almost 59 billion barrels of natural gas liquids.

The problem facing industry is finding markets for all of this petroleum.

The natural gas glut in North America is now in its fourth year, with no signs of it ending.

In fact, the latest supply reports out of the United States show that production is now at all-time highs, despite a pullback in rigs targeting natural gas that began a year ago.

A lack of market access is also punishing Canadian oil producers, who face an over-$20-per-barrel discount to world prices, due to a lack of pipelines connecting to global markets.

There are numerous plans in place to connect both oil and gas supplies to new markets.

Four LNG export terminals planned for the West Coast are working their way through the regulatory and corporate approval process. Three oil export pipelines are also navigating the same processes.

But all these projects are years from fruition. And that leaves a lot of operators and service and supply companies nervous in the short term.

Major operators are presenting flat capital budgets or cutting expenditures in 2013 in response to the short-term uncertainty. Some are leaving the door open for increases in the second half of the year, if prices improve.

Uncertain about their customer budgets, Canada’s big drilling contractors and pressure pumpers have cut capital expenditures in 2013 as the boom in rig building and pressurepumping horsepower expansion, fuelled first by the shale gas rush and then tight oil development, has levelled off. This is sure to trickle down to production-oriented service and supply companies as the year plays out.

It all makes for a very strange time to be in the oil and gas industry.

With huge potential supply in the ground, there is a big urgency to drill and complete wells, and grow production. But countering that urgency is the short-term reality of uneconomic gas prices and oil-price discounts taking a huge bite out of potential profits. expect this “hurry up and wait” environment to continue through 2013 and likely for a few years to come.

Until the pipe starts being laid heading west across the Rockies and south to the U.S. Gulf Coast, investors are going to keep a tight leash on the dollars needed for oil production to grow.

Natural gas producers are going to have even a longer wait before investors return in a big way.

For service and supply companies, expect flat to modest growth until the headlines change.

Darrell Stonehouse dstonehouse@junewarren-nickles.com

4

FeBRUARY 2013

EDITORIAL Editor Darrell Stonehouse | dstonehouse@junewarren-nickles.com Contributing Writers Jacqueline Louie Editorial Assistance Manager Samantha Sterling | ssterling@junewarren-nickles.com Editorial Assistance Tracey Comeau, Brandi Haugen CREATIVE Print, Prepress & Production Manager Michael Gaffney | mgaffney@junewarren-nickles.com Creative Services Manager Tamara Polloway-Webb | tpwebb@junewarren-nickles.com Creative Lead Cathlene Ozubko Graphic Designer Janelle Johnson Contributing Photographer Joey Podlubny SALES Sales Manager – Advertising Monte Sumner | msumner@junewarren-nickles.com Sales Brian Friesen, Tony Poblete For advertising inquiries please contact adrequests@junewarren-nickles.com Ad Traffic Coordinator – Magazines Denise MacKay | atc@junewarren-nickles.com DIRECTORS President & CEO Bill Whitelaw | bwhitelaw@junewarren-nickles.com Vice-President Rob Pentney | rpentney@junewarren-nickles.com Director of Sales & Marketing Maurya Sokolon | msokolon@junewarren-nickles.com Director of Events & Conferences Ian MacGillivray | imacgillivray@junewarren-nickles.com Director of The Daily Oil Bulletin Stephen Marsters | smarsters@junewarren-nickles.com Director of Digital Strategies Gord Lindenberg | glindenberg@junewarren-nickles.com Director of Content Chaz Osburn | cosburn@junewarren-nickles.com Director of Production Audrey Sprinkle | asprinkle@junewarren-nickles.com Director of Finance Ken Zacharias, CMA | kzacharias@junewarren-nickles.com OFFICES Calgary 2nd Flr-816 55 Avenue N.E. | Calgary, Alberta T2E 6Y4 Tel: 403.209.3500 | Fax: 403.245.8666 Toll-free: 1.800.387.2446 Edmonton 220-9303 34 Avenue N.W. | Edmonton, Alberta T6E 5W8 Tel: 780.944.9333 | Fax: 780.944.9500 Toll-free: 1.800.563.2946 SUBSCRIPTIONS Subscription Rate In Canada: 1 year $89 plus GST, 2 years $139 plus GST Outside Canada: 1 year $179 Single copies & back issues: $10 plus GST & $2.50 postage & handling Subscription Inquiries Telephone: 1.866.543.7888 Email: circulation@junewarren-nickles.com Online: junewarren–nickles.com Profiler is owned by JuneWarren-Nickle’s Energy Group.

GST Registration Number 826256554RT. Printed in Canada by PrintWest.

ISSN 1204-4741 | © 2013 JuneWarren-Nickle’s Energy Group.

All rights reserved. Reproduction in whole or in part is strictly prohibited.

Publications Mail Agreement Number 40069240. Postage paid in Edmonton, Alberta, Canada.

If undeliverable, return to: Circulation Department, 80 Valleybrook Dr, North York, ON M3B 2S9. Made in Canada We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

FEATURE

The NeW drilling tool box Drilling contractors turn over rig stock to meet operator demand for high-efficiency mobile rigs

By Darrell Stonehouse

D

and utilization on that rig is going to be pretty low because it’s not what the market wants.”

Precision president and chief executive officer Kevin Neveu said the decommissioning of the rigs is part of a five-year effort to transform the drilling contractor from a Canadian company to a North American powerhouse with 300 high-performance rigs operating in every unconventional play in Canada and the United States. Precision managed the risk of turning over its fleet though long-term contracts with customers, he added.

“Since 2007 this transformation has included over 110 new-build rigs and over 40 rigs upgraded, with all of these investments supported by long-term customer contracts delivering excellent financial returns to Precision. our diversified geographic breadth and our high-performance rig fleet provide revenue visibility and stability, which seemed improbable five years ago,” Neveu said. “our decision to retire and dispose of the legacy Tier 3 rigs is an important turning point in this transition for Precision. While some legacy Tier 3 rigs may have market niche opportunities, the drilling industry’s growth and success will be driven by improved drilling efficiency, safety performance and environmental responsibility.”

Like Precision, Trinidad Drilling Ltd. is also in the process of transitioning its fleet to meet demand from operators for highperformance, high-mobility rigs with advanced drilling controls. In its third-quarter report, Trinidad said more than three-quarters of its fleet now meet these requirements. The company predicts weak demand for “older-style mechanical rigs” going into 2013.

Trinidad’s experience drilling in the haynesville shale play in the United States shows the importance of the new high-performance rigs to

PhoTo ILLUSTRATIoN: JANeLLe JohNSoN

emand for drilling rigs that can efficiently punch out extendedreach horizontal wells from multi-well drilling pads in unconventional oil and gas plays has forced drilling contractors to almost completely turn over their rig stock in the past five years.

The reinvention of the drilling fleet is only part of a major restructuring in the Canadian drilling industry. Drilling contractors are also focused on controlling the financial risks of the major capital investment needed to build new fit-for-purpose rigs through the use of long-term contracts, while looking to manage the risk of a volatile North American drilling marketplace through international expansion.

Just how quickly the drilling fleet is being overhauled was illustrated in December of 2012 when Precision Drilling Corporation announced it was decommissioning 52 drilling rigs, as Canada’s largest drilling contractor continues its move to meet North American demand for high-performance rigs. Precision is shutting down 42 Tier 3 rigs. Tier 3 rigs are older-style rigs unsuitable for horizontal drilling. It is also shuttering 10 Tier 2 rigs. Precision defines a Tier 2 rig as a unit that can drill horizontally, but isn’t mobile for pad-drilling operations.

Precision said the decision to decommission the rigs was driven by the day rates and utilization of the rigs—not by their age or size.

“You can have a 10-year-old rig that has a top drive and big mud pumps and moves quickly. Nobody really cares if it’s 10 years old or not,” explained Carey Ford, Precision’s vice-president, finance and investor relations. “But you can have a fi ve-year-old rig—and there’s been some rigs that have been in the market like this—where it’s fi ve years old, but it’s 2,000 horsepower, it doesn’t move very quick, and even though it has an AC [alternating current] top drive and nice controls and everything, the day rate

PRoFILeRMAGAZINe.CoM

5

FEATURE

well operators. Since entering the haynesville, Trinidad has been able to cut the number of days to drill a well from 65 days to 40, saving operators around $1.4 million per well.

Trinidad is also managing risk using long-term contracts. All new rig builds and major enhancements to the existing fleets are backed by contracts with the payback on new rig builds coming within three to four years. The company adds that the contracts provide revenue stability and encourage utilization of the rigs by operators.

While the ability to drill long horizontal wells efficiently is one factor forcing the turnover in the drilling fleet, the growing use of multi-well drilling pads is also playing a major role. operators like pad drilling because it cuts costs and lessens the environmental footprint of drilling operations.

“You put the rig on the pad and you can just drill the wells and complete them back-to-back as you go, because then you don’t have to move the rig,” Bellatrix exploration Ltd. executive vice-president Brent eshleman recently told the Daily Oil Bulletin. “Moving a rig even a

“

The Kuwait wells Precision will be drilling are deep, high-pressure oil wells, said Neveu.

“It’s real high-performance drilling, high expectation on the contractor. These rigs are deeper and higher-pressure BoP [blowout preventer] stacks than any rigs that currently exist in the Middle east,” he said. “It’s also fair to say the world’s supply of deep, high-pressure rigs is just about at zero.”

Precision, though, also believes there are remaining applications throughout the Arabian Gulf for some of its other big, heavy rigs with 5,000- to 10,000-pound BoP stacks.

The three rigs Precision currently has operating in the Arabian Gulf in Saudi Arabia are just a first step, and even with the two rigs for Kuwait it is still probably five, six or seven rigs short of a meaningful reach for Precision, said Neveu.

“We always have been quite buoyant about the Kuwait market and we think most of the Arabian Gulf has potential; potentially more rigs in Saudi [Arabia], even looking at other countries in the Arabian Gulf,” he explained.

These rigs are deeper and higher pressure BoP [blowout preventer] stacks than any rigs that currently exist in the Middle east. It’s also fair to say the world’s supply of deep, high-pressure rigs is just about at zero.

”

— Precision Drilling’s Kevin Neveu on Middle east expansion short distance can cost upwards of $200,000, and constructing roads and other infrastructure for each well rig cost money as well. It doesn’t take long before you’re saving yourself at least $300,000 per well. So if you’re to drill eight wells a pad, you’d save yourself, I’m going to say, $2.5 million.” ensign energy Services Inc. first began drilling multi-well pads in the late 1980s in the Cold Lake oilsands plays. ensign president and chief executive Bob Geddes recently told the Daily Oil Bulletin that drilling companies continue adding services to make multi-well drilling pads more efficient for the operator.

“What is changing on the rig is the use of larger mud pumps and the use of integrated controls, where the drilling contractor is doing a lot of the directional work. That’s where the evolution is going,” he said, adding such integrated controls means third-party directional services are becoming less necessary on drilling rigs, as companies such as ensign can increasingly do it all.

Geddes says he believes producers will continue to demand pad rigs as a more cost-effective means of extracting resources, as drilling itself becomes more efficient.

“Certainly, there’s a number of good reasons why it’s being done.

You’ve got lower surface impact. We’re able to go out further and further horizontally without any impact at the surface, and more cost-effectively,” he said.

Canadian drillers also continue expanding internationally in an effort to manage risk and grow revenues. ensign has long had a global presence. Precision announced in December of 2012 that it is building two high-performance rigs through its subsidiary, Grey Wolf Drilling International, for the Kuwait deep market. This follows the entry into the Saudi Arabia market last year, where the company currently has three rigs operating. Company president Neveu says Precision hopes to grow its Middle east activities going forward.

“The lessons we learned through the 2012 start-up in Saudi Arabia should give us a running head start on the Kuwait contract,” he said.

6

FeBRUARY 2013

While shallow gas drilling may be on life support in Canada, in Australia is it just beginning to boom. And Calgary-based Savanna energy Services Corp. is positioning itself to profit from the coming gas rush.

Ken Mullen, Savanna’s president and chief executive officer, told shareholders at the company’s annual meeting that in the next three years, companies such as ConocoPhillips and Royal Dutch Shell plc are expected to spend $75 billion to $80 billion developing coalbed methane fields and building pipelines and liquefied natural gas (LNG) facilities in Australia.

“We’ve made very good penetration in that market, continue to do so and will continue to do so as we move forward,” said Mullen.

The company has seven rigs in Australia: four proprietary CT-1500 hybrid drilling rigs (modified to meet the country’s regulations) and three service rigs. Savanna was attracted to the country for its relatively shallow gas with high repeatability and very little need for geological study, he said.

“It’s really a function of punching holes and putting them on production,” said Mullen. “Savanna built its reputation doing that and that reputation was actually what initially dragged us down there. Although we were seeking international opportunities, they actually sought us out at the front-end because of the reputation and expertise that we had. We’ve done nothing over there but continue to build upon that.”

Mullen told the meeting one of Savanna’s constraints to growth in Australia is that the country’s oil and gas industry is in its infancy.

To develop its massive coalbed-methane resource, an LNG plant and two pipelines have to be built and all the wells drilled, and the country doesn’t yet have the right resources, he said. he compared it to the situation in Alberta a few years ago when shallow gas was the hot commodity and entire government departments were dedicated to processing licences to continue the flow of drilling. “In Australia they have three guys, because they’ve been drilling 30 wells a year and now they have to drill, as an industry, 5,000 or 6,000 wells.”

Feature

Under pressure

Supply catches up with demand in North American pressure-pumping market

By Darrell Stonehouse, with notes from the Daily Oil Bulletin staff

Photo: Joey Podlubny

T

he last two years have been good times for North American pressure pumpers, as an explosion in multistage fracturing operations in tight oil plays added to ongoing shale gas drilling, resulting in massive growth in pressure-pumping demand.

But continuing weakness in natural gas prices finally took its toll on shale gas drilling in 2012, reducing the number of massive multistage fracturing treatments across North America. Add to that a huge increase in pressure-pumping capacity and supply finally caught up with demand last year, putting pressure pumpers in a hold pattern going into 2013.

In the United States, both prices and margins for pressure-pumping services were on the decline as 2012 ended.

Schlumberger chief executive officer Paal Kibsgaard told shareholders in the company’s third-quarter results conference that they have been laying down fracturing spreads in some unconventional oil plays in the United States as a result of the over-supply of equipment and resulting drop in prices.

Kibsgaard said he expected profit margins on fracturing to continue dropping into the first quarter of 2013, as well as liquids drilling remaining stagnant.

“Now, what’s going to happen beyond that, I would say there’s really three main questions in my mind. Firstly, will there be a first-quarter recovery in the liquids? This is key to maintaining the current pricing overall, both for fracking as well as for the other product lines,” he said.

“The second question is will there be a market share play in the frac market and a new pricing floor given the fact that there is significant excess capacity in the market and also, when new capacity comes, is this going to be another source of market share plays?” he said.

“And the third question in my mind is in terms of how North America overall is going

to perform, what are really the normalized frac margins? The way I see it, or we see it, the frac market in North America today is largely a commodity market with a very low barrier to entry, where capacity is really driving the pricing, and we peaked around 30 percent margins, and the trough is now in low single digits. And I would say in my mind that the normalized margins are more in the middle of this. They’re certainly not toward the upside,” he concluded.

Canada’s two big independent well completion outfits, Trican Well Service Ltd. and Calfrac Well Services Ltd., are both planning for a flat year in 2013.

Trican is cutting 2013 spending to $32.3 million from about $360 million (down from $678 million initially) in 2012.

The budget contains minimal expansion capital, and the rationale does not reflect an expectation that producers will impose spending cuts in the New Year.

“It has more to do with the fact that we spent heavily in 2011 and 2012, adding quite a bit of capacity to the market,” said Dale Dusterhoft, chief executive officer. “We think 2013 will be flat over 2012, and we won’t need to add any more capacity. We’ve added enough and we’re at a point where we can just keep that same level.”

Despite his view that the year will be flat overall, Dusterhoft foresees a “very busy” first quarter. After that, much of what happens will depend on producers and the cash flow they’re generating, which in turn depends on oil and gas prices, ever the industry’s wild cards.

“If oil or gas is higher than what producers think, then they’ll jump spending in the second half. It’s really going to be almost a tale of two parts to the year. The first half is pretty well set, while the second will depend very much on the cash flow of our clients,” he said.

South of the border, Trican operates coiled tubing units, as well as service rigs and the

pressure-pumping trucks that are now a familiar sight on many leases. When it comes to capacity, Dusterhoft acknowledges the U.S. pressure-pumping market is overbuilt, but said the situation in western Canada is closer to being balanced.

Trican has no plans to bring pumping trucks to Canada from the United States. The problem is that any equipment sent here has to be manned, which currently is not always easy, regardless of which market Trican operates in, he said.

Calfrac announced a 2013 capital budget of approximately $117 million in December.

The capital program is focused on maintenance and support capital, and further investment in logistics equipment.

Approximately $25 million of capital is allocated to support Calfrac’s growing Latin American operations, including an investment in coiled tubing and fracturing equipment, as the company’s outlook for activity in this region continues to improve.

The 2013 capital program does not contemplate any additional expansion capital for Calfrac’s Canadian, U.S. and Russian operations.

In addition, approximately $110 million remaining from Calfrac’s existing capital program is expected to be spent in 2013.

“The 2013 capital program demonstrates Calfrac’s continued commitment to maintain its equipment fleet in peak operating condition, while introducing further enhancements to improve the company’s service quality and operational efficiency,” the company said in a release.

Calfrac will continue to assess opportunities to strategically expand its geographic presence in a prudent manner through a period of uncertain oilfield service activity, and will also continue to evaluate its capital program in order to make any required adjustments as greater visibility unfolds in 2013, the company said.

P R O F I L E R M A G A Z I N E . C O M

7

FEATURE

8

FeBRUARY 2013

FEATURE

Nervous energy 2013:

A year of uncertainty for service and supply community

By Darrell Stonehouse Illustration by Anthony Tremmaglia

T

he North American natural gas market remains out of balance, with supply still outstripping demand. oil pipeline bottlenecks continue slowing the flow of Canadian crude to markets, leading to steep price discounts, and efforts to alleviate both these issues are moving slowly, with little relief seen in the short term.

This all adds up to a year of great uncertainty for Canadian service and supply companies. And that uncertainty has many stalling expansion plans until a clearer vision of the path ahead emerges.

Capital spending in the western Canadian oilpatch will likely “pull back a little bit” in 2013, despite a slight increase in natural gas prices recently, Roger Serin, managing director and head of energy research at TD Securities, said in late fall at the Petroleum Services Association of Canada’s (PSAC) 2013 Forecast. “on a conventional basis, we think spending will fall by five to 10 per cent in 2013, after about a 10–15 per cent drop this year. If anything, we’re probably conservative on that number,” he said.

No confidence in natural gas recovery Serin is bearish about gas prices because U.S. production remains stable amid a steep drop in the U.S. gas-drilling rig count, and because some of the U.S. shale gas production—the equivalent of western Canada’s entire output—is now spilling into Canada, displacing Canadian gas. he expects the NYMeX gas price to remain below US$4 per million British thermal units, “for some time.” he noted the Alberta AeCo price is roughly 50 cents lower than the NYMeX price.

Serin said exports to the United States used to make up as much as 65 per cent of Canada’s gas production. It’s now about 55 per cent.

“And I’m going to tell you, over the next couple of years, it’s going to fall even more because Marcellus production from the U.S. northeast is not only going to grow for northeast U.S., but we recently started importing Marcellus gas into Canada to the tune of half a billion cubic feet a day, and that will probably grow to north of one billion cubic feet a day,” he said.

This underscores the urgency of planned exports of Canadian gas to Asia, he said, stressing the need for everyone—including governments—to work toward that goal.

“LNG [liquefied natural gas] matters, even if you’re not with a company that’s exporting LNG,” he said. “And the reason it matters is it will significantly drive activity in the Western Canadian Sedimentary Basin [WCSB]. And unless we get an export opportunity for natural gas, whether to new markets in the U.S. or Japan, Korea, China in the form of LNG, we’re going to be awash in natural gas, in my view, for some time. And that will keep natural gas prices suppressed. Period.

Full stop. So I don’t think gas prices go much above US$4. I think netbacks for LNG will be $4–$5 on long-term contracts. So I think there’s a lot of work to be done to get LNG projects approved.” he said the good news for Canada’s conventional oil and gas sector is the return of the supermajors to the basin.

“The supermajors are back and with well costs in the Duvernay between $10 million and $15 million, it’s a good thing, in my view, that they are,” he said.

Serin expects significant capital spending in the Montney liquid-rich gas play, the Cardium tight oil play and the emerging Duvernay liquids-weighted shale play.

“The Montney in northeastern B.C. and straddling into west-central Alberta will be a key part, in my view, of LNG exports, and, in fact,

PRoFILeRMAGAZINe.CoM

9

FEATURE

has the opportunity to largely, if not completely, displace horn River demands for natural gas being exported,” he predicted.

In the Duvernay, the industry has spent about $4.5 billion to acquire land in the past couple of years.

“Generally when you buy the land, you drill it,” said Serin, who expects Duvernay capital spending to exceed $1 billion in 2013.

Canadian natural gas–giant encana Corporation believes gas prices will rebound somewhat in 2013, company president and chief executive officer Randy eresman told shareholders at encana’s third-quarter conference call.

In early 2012, encana shut in about 500 million cubic feet per day of production in response to low prices. eresman said the decision to cut production was made after gas prices dropped below US$2.50 per million British thermal units. The company brought that gas back on stream in August.

Potter said he sees gas prices in the $4 range, assuming there is a normal winter next year, as demand is the limiting factor for the commodity. however, while some might think a modest increase in demand would result in a return to drilling, Potter noted there is currently a lack of rig infrastructure allowing for simply increasing production. To reallocate capital back to dry gas means dry gas developers must compete with tight oil and liquid-rich plays, he noted.

“And the reality is most of them don’t compete until you see a gas price in the $5–$6-per-thousand-cubic-feet range. So we think producers are going to be a lot more hesitant moving back to dry gas than a lot of people in the market do,” he added.

Growing oil production looks for new markets Canada’s oilsands operators and conventional oil producers are ready, willing and able to ramp up production.

seen two major projects already been delayed with XL and “We’ve Northern Gateway. We’ve seen costs increase, with Gateway assuming about C$500 million for enhanced safety and Keystone XL having additional costs rerouting away from the Sandhills in Nebraska.

”

— Gerry hannochko, Standard & Poor’s

With the forward curve reaching about $4 for 2013, “we thought it prudent to bring those volumes back on,” he said. eresman sees a number of sources for optimism going into 2013. on the demand side, he said, gas use is growing in the power sector as it replaces coal.

“Relative to 2008 levels, we estimate that approximately eight billion cubic feet per day of natural gas demand has been gained from coal-to-gas displacement,” he said. on the supply side, eresman noted that North American gas production has plateaued year-over-year, with declines in more-mature or conventional basins largely offsetting growth from new plays.

“This year, we’ve seen a more than a 50 per cent drop in gasdirected rig counts in North America. And while rig completion efficiencies have improved relative to a few years ago, if this reduced rig-count trend continues, there should be an impact on 2013 natural gas production levels,” he said.

CIBC World Markets Inc. institutional equity research executive director Andrew Potter is in line with encana’s view for 2013.

Speaking at the annual CFA Society Calgary oil & Gas Forecast Breakfast, Potter said with current U.S. rig counts, the production there will stall at about 65 billion cubic feet a day. At the same time, he said, Canadian deliverability to the United States is expected to decline by about 0.5 billion cubic feet a day by next year.

“You can’t have declining supply and increasing demand and expect the prices to stay static. At some point, the prices have to go high enough to prompt more gas drilling, or see demand destruction,” he said.

10

FeBRUARY 2013

Plans are in place to potentially grow bitumen production by up to 350,000 barrels per day annually over the next decade. Conventional producers will likely drill upwards of 8,000 wells in 2012, and a similar number next year, according to PSAC’s 2013 forecast.

But for the growth to continue, all the proposed export pipeline capacity and more will need to be built, and soon, according to CIBC’s Andrew Potter. “even if you build every single pipe that’s on the table right now… you’re still short pipeline capacity,” he noted.

Unfortunately, Potter told a recent gathering in Calgary, the outlook for new pipelines is worse than it has ever been. While he expects Keystone XL to be approved at some point, he does not expect a West Coast pipeline to be built this decade. Further, he expects there to be political challenges in converting portions of TransCanada Corporation’s underused natural gas pipeline in eastern Canada to oil service.

Standard & Poor’s (S&P) Rating Services shares this view. In a new report S&P says increasing oil production in the WCSB needs to find a home, and regulatory delays in approving new pipelines are putting this future growth at risk.

During a midstream briefing in Calgary, Gerry hannochko, a director with S&P, noted that in terms of pipeline projects, there are over C$15 billion in projects in the queue to increase capacity by nearly two million barrels per day, including Alberta Clipper, Keystone XL, the TransMountain expansion and the Northern Gateway pipeline.

“Production is coming; you’re going to need a home for it and there’s simply not enough takeaway capacity in the basin right now,” he said.

PhoTo: JoeY PoDLUBNY

FEATURE

But, he pointed out, the regulatory/environmental risks may slow approvals.

“We’ve seen two major projects [that have] already been delayed with XL and Northern Gateway,” hannochko said. “We’ve seen costs increase, with Gateway assuming about C$500 million for enhanced safety and Keystone XL having additional costs rerouting away from the Sandhills in Nebraska.”

Passing of the omnibus bill by ottawa may speed the regulatory process, he added, but he noted there’s now increased public scrutiny of pipeline projects.

“We think that the overall trend here is going to be longer approval timelines…in spite of efforts to try to streamline these,” he said.

Ian Anderson, president of Kinder Morgan Canada, says one key to moving pipeline projects forward is to work to understand and mitigate concerns in communities along pipeline routes.

“National interest doesn’t matter a damn to that person who is sitting in Chilliwack whose yard is potentially going to be dug up for a new pipeline to go through,” he said during a keynote address to the Canadian heavy oil Association fall business conference. “It doesn’t matter a damn to that First Nation in the North Thompson Valley who is questioning the integrity of pipelines that cross the many streams and creeks that go through their traditional lands.

“It’s got to get localized,” Anderson stressed. “It doesn’t mean the national interest doesn’t exist, it doesn’t mean it’s not critically important, but as a project proponent, as an industry, as a sector, it’s got to somehow get localized.”

Kinder Morgan is planning the expansion of its current 1,150kilometre Trans Mountain pipeline between Strathcona County, near edmonton, and Burnaby, B.C. The proposed expansion, if approved, would create a twinned pipeline that would increase the nominal capacity of the system to 750,000 barrels per day from 300,000 barrels per day.

The company is planning to file the facilities application with the National energy Board in late 2013. Filing the application will initiate a regulatory review of the expansion facilities. If the regulatory application process is successful, construction of the new pipeline could begin as early as 2016. The expanded capacity would be ready for use in 2017.

“Today, we’re moving off of the West Coast down the Trans Mountain system, probably a vessel a month, which is making its way to China,” Anderson said. “When people talk about the fact that we need to access the market, the answer is we need to access the market more.” he added that the planned West Coast transportation projects are not a silver bullet solution to move growing oilsands production to market.

“I don’t think the West Coast proposals are the only projects that need to proceed; we need all of them right now,” he said. “We need capacity to the Gulf Coast, whether that’s Keystone and Seaway and other projects.”

Service sector freezes budgets, waiting for operators, governments to solve oil and gas market issues Capital spending by western Canada’s oilfield service companies soared in 2012, but early indications are that 2013 will not follow the same course, based on recent budget announcements and

indications that company executives are waiting for a better idea of what lies ahead.

In some cases, service companies’ 2013 capital budgets are a fraction of 2012 figures, as management teams allocate less to growth capital and more to maintenance spending. In recent years, initial budget figures have often been just a starting point for companies, which typically revise the figures during the year.

This year, drilling contractors were typical, with some cutting spending by 50 per cent or more. Precision Drilling Corporation, for example, rolled out a $1.14-billion budget for 2012 in December 2011, but a year later, the figure was down to $920 million. For 2013, the budget was cut to $485 million, 53 per cent of the 2012 figure.

In Canada, service companies expect a winter “pretty similar” to last year’s, in terms of activity, according to Brian Purdy, vice-president and oilfield services analyst for Global hunter Securities LLC. “And if activity is about the same, you probably don’t need more equipment, which they added through 2012. I think the fracturing and drilling [fleets] are probably sufficient for the indications of demand this winter.”

For its part, contract driller Western energy Services Corp. will spend some $60 million in 2013, with $28 million for expansion capital and $32 million in maintenance spending. Like other drillers, the company spent aggressively on rig iron in 2011 and 2012, but will ease off in the new year (Western’s fleet includes 49 drilling and five service rigs).

“I think most of us view 2013 as likely flat, compared to 2012, and take the view that we probably have sufficient equipment to meet the demands of new customers,” said Dale Tremblay, Western’s chairman

PRoFILeRMAGAZINe.CoM

11

FEATURE

Driller association predicts activity decline The Canadian Association of oilwell Drilling Contractors (CAoDC) projects the industry will drill 10,409 wells in 2013. A well count of 10,409 wells is approximately six per cent below 2012 activity.

The association arrived at the lower well count based on continued uncertainty around commodity prices. Additionally, the well count reflects an industry engaged in complex drilling programs that require more time to drill. For its 2013 forecast, CAoDC projects industry will average 11.4 days to drill a well.

The CAoDC-registered fleet will begin 2013 with 830 rigs.

CAoDC members will have added 30 rigs to the fleet through 2012, but CAoDC does not anticipate further expansion in 2013.

“It’s more likely contractors will retire older equipment,” says CAoDC president, Mark Scholz.

The retirement of older equipment has been an ongoing trend over the last three years as the newer, more advanced equipment is better suited to explore unconventional plays.

The annual well count is a useful barometer to identify the strength of industry activity, but rig contractors charge for services based on operating days. For this reason, operating days are an important indicator of the health of the rig sector.

CAoDC anticipates that 10,409 wells will generate an average of 118,401 operating days.

Drilling activity follows a distinct annual cycle. Rig utilization and operating days are highest in the first quarter. Secondquarter activity drops due to spring breakup. The third quarter sees a nominal increase over the second, and activity trends higher in the fourth quarter.

CAoDC projects fleet utilization in the first quarter of 2013 to be 60 per cent (498 rigs). Industry is anticipated to pack 44,367 operating days in this period. Second-quarter activity is always a challenge to forecast as spring breakup is a signifi cant factor. For the second quarter of 2013, CAoDC projects an average utilization of 20 per cent (166 rigs active) and 14,789 operating days. This projection mirrors second-quarter activity seen in 2012. For the third quarter, the CAoDC is forecasting 35 per cent utilization (or 291 rigs) and 25,925 operating days.

The final quarter will be higher as industry ramps up for winter drilling. The CAoDC forecast pegs utilization at 45 per cent (374 active rigs), similar to current activity levels. In terms of operating days, the fourth quarter should see 33,320 days.

and chief executive officer. “Based on [what] we’ve built over the past couple of years, we should have enough to handle the demand,” he said in an interview. of service sector executives canvassed before Christmas, most were upbeat about the first quarter, based largely on the brisk pace of equipment bookings, including rig bookings. At Western, Tremblay

12

FeBRUARY 2013

expects all 44 of his Canadian fleet of deep-drilling rigs to be fully booked through January and February, something he chalks up to the fleet’s recent vintage and long-reach—3,000-metre—capability.

Savanna energy Services Corp. plans a 2013 capital budget that will be roughly flat, at $107 million, although the company is cautious about North American activity over the rest of the year. In 2012, the drilling and service rig contractor spent about $104 million, down from an initial budget of $152.80 million, later cut to $126.90 million.

Savanna noted that PSAC and the Canadian Association of oilwell Drilling Contractors are calling for flat or reduced industry activity in 2013. Ken Mullen, Savanna president and chief executive, said his company’s $107-million budget is not final, and depends on how busy producers will be a few months down the road, a question that few in the industry can answer at this point.

“I think everyone is quite comfortable with the outlook for Q1 in Canada,” he said. “The second quarter is a free pass. We’re trying to get visibility beyond that, and I think most producers are struggling with that…. We’re not expecting a downturn, but we’re not comfortable that it’s going to be solid, either. There’s not good visibility for anyone.”

While not expecting capital-spending cuts from customers, neither does Mullen foresee an environment in which producers will easily boost spending. In the United States, where Savanna has a limited presence in the drilling market, he’s confident his firm’s modern drilling rigs will stay busy (three-quarters of the fleet is rated at 2,000 metres or more).

In western Canada, where Savanna operates 71 drilling rigs, the outlook is less clear, in part due to greater uncertainty about the timing of drilling activity and when it will ramp up, Mullen said.

Whether or not Savanna will hike capital spending later on is another story, he added.

“We know what spending we’re comfortable with at this point. If we see a demonstration of better visibility in the second half of 2013, then we’ll increase the budget accordingly. And if we don’t, we won’t.”

For PSAC president Mark Salkeld, the keyword is caution. “In the service sector, there has been a lot of spending, with a certain amount still going on,” he said. “But service companies are fairly confident of the quality of their field equipment that we can go a year or so without having to spend a whole bunch beyond regular maintenance,” he said.

“We’re expecting a relatively good, steady winter, with our normal ramp-up and then 100 hectic days. Then, we’ll go into spring breakup,” he said. After breakup, PSAC members are confident things will then start to gain momentum going into the third and fourth quarter, he added.

In support of his optimism, Salkeld cited a number of recent deals that augur well for future investment in the industry in western Canada, including a planned joint venture between encana Corporation and a subsidiary of PetroChina, which will target Alberta’s Duvernay formation.

“We’ll go through winter with the equipment we’ve got, just spending the basics needed to maintain and complete the projects already going,” he said. “We’ll start to see some positive outcomes to these foreign investment deals toward the latter half of the year, and we’re optimistic that things will start to pick up.”

Fabricating and serving boilers across North America

W

illy D Boilers & Fabricating is a locally owned and operated ABSA certified company, fabricating and shipping complete boiler packages across North America. From as far north as the high Arctic to as far south as the Gulf of Mexico and across the continent, the reach of Willy D’s is continually expanding as rigs, strip sites, frac sites and pipelines continue to benefit from our expertise in package boilers. With the unique ability to provide their customers with the best of the past to the latest technology, Willy D Boilers stands alone. This Alberta-based firm specializes in providing new and refurbished boilers, boiler recertification and repairs along with boiler rentals, parts and 24/7 field service.

Since its establishment in 2008, Ceo and founder Mario Michel has been dedicated to the quality of the company’s people, products and the integrity of the business. “Spare nothing to give the customer what they need and ‘full steam ahead,’” says Michel.

Recently, Willy D Boilers has expanded to an 18,000-square-foot facility with a five-acre yard in Nisku. There the company manufactures burners, control panels and custom skid shacks and buildings. They can do complete installations as well as troubleshooting across North America. operations manager Steve Skoreiko and Ceo Mario Michel have worked diligently to add new members to the team with expertise in natural gas–fired

systems, instrumentation and office management in order for Willy D Boilers to meet the future head on. Now with over 20 employees, Willy D Boilers is poised for the next decade. “With over 100 years of combined boiler experience and technical support, we can now meet every need of our customers,” says Skoreiko. “‘Full steam ahead’ is not only our motto: we live it!”

Willy D Boilers is proud to be an exclusive distributor of Williams & Davis Boilers for western Canada. Williams & Davis Boilers offers a complete line of package Scotch Marine, high- or low-pressure boilers that have been constructed to meet the extreme conditions of the oilpatch, yet engineered to exceed the expectations of stationary operation. Reliability and the highest quality vessels designed exceeding ASMe codes for over 90 years—this has been their standard.

Two pass or three pass, on/off, high/low, fully modulated, dual fired, just oil or just gas, Willy D Boilers has it all. Customers may spec their requirements, either type of fuel, firing system, brand names or consult with the experts at Willy D Boilers for all of their needs. Looking to the past for simplicity and durability, and to the future for efficiency and high tech, Willy D Boilers is prepared to meet our customers’ needs.

FAST FACTS WILLY D BOILERS AND FABRICATING LTD. ADDRESS: 1703 8 Street Nisku, AB T9e 7S8

CONTACT: T: 780.955.7182 F: 780.955.7175 E: info@willydboilers.com

www.willydboilers.com

PRoFILeRMAGAZINe.CoM

13

COMPANY PROFILE

WILLY D BOILERS AND FABRICATING LTD.

COMPANY PROFILE

THRU TUBING SOLUTIONS TTS Drilling is releasing its newest product to the horizontal drilling market—the Casing XRV.

T

TS Drilling Solutions is releasing its newest product to the horizontal drilling market—the Casing XRV™. The Casing XRV™ utilizes the same technology as the Drilling XRV™, which breaks the friction between the wellbore and drill pipe. The Casing XRV™ will help combat the friction between the wellbore and casing or other completions being run in the horizontal leg.

“We are very excited about the potential that this tool brings to the horizontal market,” says Rob Phillis, Country Manager for TTS Drilling and Thru Tubing Solutions.

“once again we see the strength of our organization, to take a problem and find a solution for it. This is a clear example of our leading role in horizontal drilling, completions and interventions. The Casing XRV™ will allow producers to successfully run their completions to TD, avoiding missing their target depth and losing production.”

Besides saving time, the Casing XRV™ will allow for the completion of previously unattainable depths, and help ensure that the completion is not set in compression. It also has a capacity to handle extreme

chemical and thermal environments. The Casing XRV™ is a user-friendly tool in that it can be set up to run with a wide range of pump rates and pressure limitations. one of the biggest advantages of the XRV™ technology is that it has no moving parts and no elastomers to be concerned about failures with. It is also worth noting that the internal diameter of both the Drilling XRV™ and Casing XRV™ are drillable, giving more options in fishing situations or other unforeseen complications during drilling or completing horizontal wells.

Key Tool Features: • Excellent tool face control • Minimal MWD interference • Increased sliding ROP • No temperature limitations or fluid compatibility issues • Less WOB requirements result in longer PDC bit life • Wide range of flow rates

The XRV ™ is a downhole vibratory tool that creates an oscillating axial force in the workstring.

This oscillating force helps combat friction between the drillpipe and the wellbore, which aids in moving the pipe in hole, reduces slip-stick, transfers weight to the BHA, and improves tool face control during sliding. Improved sliding and tool face control during steering operations eliminates or decreases extra slide attempts, saving time and improving overall ROP.

14

FeBRUARY 2013

Save time & improve overall ROP 200% - 500%!

Historical field data shows increases in sliding ROP of 200% - 500%, and rotary ROP of 150% - 300%.

The absence of elastomers in the XRV™ eliminates chances of failure caused by high temperatures, harsh fluids or circulation loss due to plugging of the bit or other BHA components. This rugged design makes it ideal for prolonged operation in demanding environments.

A full range of Safety Joints are available to accommodate all sizes of XRV ™ tools.

These tools are manufactured with a proprietary thread designed to prevent unwanted back-off failures. Stress reliefs in the tools minimize bending loads on the break point, allowing high flexibility.

All XRVs™ and Safety Joints are quality inspected and tested to maintain superior results during field operations.

www.ttsdrilling.com headquartered in oklahoma City, okla., and established in 1997, Thru Tubing Solutions provides coiled-tubing downhole tools, running and retrieving services, abrasive cutting and perforating, snubbing, and related tools and services geared toward workovers. Thru Tubing Solutions opened its doors in Canada in 2006, where it now employs 65 staff. The company’s operational head office for Canada is located in Red Deer, Alta., with a sales office in Calgary and branches in Grande Prairie, Alta.; estevan, Sask.; and Fort Nelson, B.C. New in 2012, TTS Drilling Solutions opened a full service facility in Leduc, providing XRV™ friction breaking tools and safety joints for the drilling industry.

“We are a solutions company, a technically strong company. That’s what we pride ourselves on,” says Phillis. “We are successful because of a group effort. If a customer has a problem, somebody in this company will have an idea that will work to solve it, and we’ll make it happen. The company listens to its employees, and recognizes each one for what they bring to the table.” Thru Tubing’s strength lies in its employees. “Tied into that is the innovation that comes from our

employees who think outside the box,” Phillis notes. “This is where our engineering group comes into play. They are a dedicated group whose main focus is improving and expanding our service offerings, and with the years of experience behind them, they are very successful at what they do.”

With a high percentage of horizontal wells being drilled in western Canada and around the world, companies must deal with frictional sticking issues. This is where Thru Tubing Solutions’ new Casing XRV™ and Drilling XRV™ tools can make a significant difference.

“This has never been done in the world before,” says Phillis, noting that Thru Tubing ran the Casing XRV™ technology successfully in Canada for its very first run. “It’s the only one of its type on the market, and it allows coiled tubing and drilling rigs alike to reach deeper horizontal targets. It allows you to drill and complete a well the way you want to.”

The Casing XRV™ Anti-Friction Tool uses the same oscillating axial force technology that Thru Tubing’s original XRV™ Tool does to break the friction of completions being run in horizontal wellbores. The XRV™ tool was originally designed for coiled-tubing

applications in deep horizontals. “What is revolutionary about the XRV™ tool is the way we do it: there are no moving parts and no elastomers,” Phillis says. With the XRV™, he adds, “it doesn’t matter what kind of fluid is pumped through the tool; it doesn’t hurt it.”

With the Casing XRV™ Anti-Friction Tool, Thru Tubing has taken the XRV™ technology and applied it to the completions industry, allowing oil companies to not only complete the wells they are currently drilling, but also to extend their reach. “They can drill deeper wells with longer lateral sections and complete them successfully, which means more bang for your buck. It’s being able to get to the target depth and successfully run the completions so you can realize the maximum potential of the well.”

Now on the market, the Casing XRV™ Anti-Friction Tool will be Thru Tubing’s major new product offering for 2013. “It’s cheap insurance. It’s peace of mind, knowing they’ll be able to realize production instead of falling short of their target,” Phillis says.

“With the cost of drilling wells this deep, and if they can’t get casing down there or completion to get all the pay zones, the lost revenue from all that production is astronomical—we’re here to make sure that potential for loss is minimized.”

FAST FACTS Improve Casing Installations

The Obvious Solution

Under certain wellbore conditions, the completion string is exposed to a high-stress state, which may cause issues during the life of the well. The Casing XRV™ allows operators to run casing to TD without unnecessary force, thus protecting the string from excessive fatigue.

The need for extended reach tools is steadily increasing as operators try to maximize production. The Casing XRV™ is an exciting new application to run casing into long horizontal laterals.

The Casing XRV™ can be customized to meet your operational requirements.

THRU TUBING SOLUTIONS AND TTS DRILLING SOLUTIONS COUNTRY MANAGER FOR CANADA: Rob Phillis D: 403.391.1446 T: 780.986.0807 Toll-Free: 1.877.336.5550 E: rphillis@thrutubing.com

www.thrutubing.com www.ttsdrilling.com

PRoFILeRMAGAZINe.CoM

15

COMPANY PROFILE

PAJAK ENGINEERING LTD. In everything that it does, Pajak engineering works hard to ‘show you the value.’

“W

e’ve tried very hard to differentiate ourselves with a value-add package on both sides of the equation—one for the client and one for the supervisor,” says Pajak engineering Controller, Chris Lassu. “We want to provide a better service for both our consultants and our clients.” established in 1966, the Calgary-based company provides wellsite supervision and project-management/engineering services to clients in 15 countries, with a base in Doha, Qatar, and Abu Dhabi, UAe, and a satellite office in Denver, Colorado.

Pajak, which supplies consultants and engineers with a wide range of skill sets to clients around the world, represents approximately 400 consultants, including 23 people who work at its Calgary head office.

Many of the overseas projects that Pajak is working on are oil-based. “We have a lot of people in South America now—Colombia has been a big region for us,” Lassu says. “We’ve got people mobilizing in Libya again, as well as in Doha. And we’re looking to get a big presence in Abu Dhabi with ZADCo, which is a partnership between Abu Dhabi’s national oil company and exxon Mobil.”

Domestically, Pajak has handled project management for the past 40 years. Now, it’s looking to expand its focus to include project management for larger companies internationally as well. “It’s a big initiative,” Lassu says.

Current projects include a core hole project, which Pajak is doing for Imperial oil this winter in northern Alberta, and a tender that Pajak is working on with a company out of houston, for a project for the Pakistan State oil Company.

Pajak always seeks to add value for both its clients and its supervisors. on the client side, Pajak’s prequalification self-assessment program provides a baseline of competency for its supervisors.

16

FeBRUARY 2013

Clients “get more than just a resume when they’re looking for a Pajak supervisor. When the client calls Pajak, we want them to have a certain level of assurance they are going to get a top-quality guy—because Pajak has done the due diligence, called the references, checked their regulated tickets, done the drug testing, and done all the things that allow them to have that confidence. And going forward, we are trying to find other ways to add value to the client.” on the supervisor side, “we really try to give a level of service with favourable payment terms, and we carry a very comprehensive group insurance package that is available to them, which is pretty rare for a subcontractor.”

Pajak prides itself on the level of service it provides for its consultants, ranging from invoicing to answering questions while consultants are out in the field. “We have a whole engineering part of the business that can support the guys in the field, given our horsepower here,” Lassu says. In addition, Pajak employs a full-time human resources and compliance professional to handle consultants’ certifications and concerns.

Pajak has built its own online system to ensure that consultants are compliant with the necessary certifications. Its proprietary system, C-Tips (Consultant Timesheet invoicing profile system), which took more than three years to develop, “helps us manage our consultants efficiently. It’s a very user-friendly, simple system to use. We built this system from the ground up and it’s totally customized to what we do.”

For example, C-Tips features automatic ticket tracking. When consultants send in their tickets, Pajak updates the information into the system, which will provide automatic email reminders of pending expiry dates, with 30-, 60- and 90-day alerts, which allows

Pajak and its field consultants to stay on top of all regulated tickets and certifications.

C-Tips also includes an online billing system for consultants, who can bill Pajak digitally from anywhere in world. They can also update their contact information, look at their tickets, manage their credentials, and store documents, contracts and a variety of other information, all online.

Pajak helps its consultants develop their careers for the long haul. “A lot of people come to Pajak with the hopes of getting a longer-term international contract,” Lassu says, noting that international operations tend to be more lucrative than domestic operations in terms of the day rates.

“We’ve been able to continue helping them with their career experience, to the point where in 10–15 years they are top notch. We have a lot of guys who started very green and are now drilling superintendents for an operation overseas. I don’t think a lot of other firms can say that.”

FAST FACTS PAJAK ENGINEERING LTD. T: 403.264.1197

www.pajakeng.com

COMPANY PROFILE

OIL BOSS RENTALS INC. Dedicated to innovative solutions

O

il Boss Rentals is an Albertan company that prides itself on offering innovative solutions and competitive pricing for everyday problems.

Founded in 2001 by Gerry Casorso, General Manager and owner, oil Boss Rentals is a family-owned and -operated company that puts top-of-the-line equipment and excellent service as its No. 1 priority. headquartered in Rocky Mountain house, oil Boss Rentals also operates a secondary northern office in Lac La Biche and lay-down yards in Athabasca, Whitecourt, Bonnyville and Fort McMurray.

This october, in its third rental company acquisition in three years, oil Boss Rentals acquired Mid-West hot Shots and Rentals Services.

“It’s a strategic move to help strengthen our commitment to service. It’s going to help us diversify ourselves, as we now have a permanent service location and office in Lac La Biche within the oilsands,” Casorso says.

“It will help us better service the customers we currently have, and grow the business within the oilsands. This way, our northern

Gerry Casorso and family.

customers will have better service and more equipment readily available, to help bring the comforts of central Alberta to isolated areas in the oilsands.

“It’s our commitment to service that carries us and our relationships with our customers that allow us to carry on doing business within the oilpatch. Anybody can have the equipment for rent, but it’s our commitment to service that makes the difference. They’re getting their best experience with oil Boss that we hope is better than the rest, and that’s why they would continue dealing with us. our competitive pricing and innovative solutions for everyday problems shows in all our equipment, which is GPS-tracked and regulated, so we can monitor and track equipment, and troubleshoot any issues in the field.” oil Boss also prides itself on being an environmentally friendly company, with a mission to become one of the most environmentally friendly companies in Alberta—and helping customers do the same.

In all that it does, oil Boss Rentals continually seeks to improve the customer service it provides. As just one example, to meet customers’ demands, oil Boss Rentals has designed, engineered and built 30-cubic-metre hot tub units to keep fluids warm during the winter.

In another milestone, oil Boss Rentals is now an accredited energy Resources Conservation Board (eRCB) facility handling oilfield waste, one of only a dozen companies in Alberta to have earned this designation. “There are plenty of companies

renting out combo environmental trailers, but very few of them are regulated to do so properly, operating within eRCB regulations,” Casorso says.

You will find oil Boss Rentals active in the community in a variety of ways. The company, which believes in being a good community partner, is a strong supporter of the local communities it operates in. From minor hockey to dance academies, and from 4-h and rodeo-related sports to STARS, the company provides a helping hand whenever it can. “We are really a community-involved business,” Casorso says.

Among its many community sponsorships, oil Boss Rentals seeks to promote activity and leadership skills in Alberta youth. “They get lots of that from hockey and a lot of these programs we support,” says Casorso, who recognizes that success is a team effort.

Thanks to a strong support group made up of employees, subcontractors and suppliers, and good working relationships with its customers, oil Boss Rentals is looking to the future with optimism.

“We are actively looking for our next opportunity to grow the business.”

Looking forward, Casorso sees the oilsands fuelling Alberta’s short-term growth.

“We are really committed to service and to the oilsands area,” he says. And in the long term, when natural gas prices have recovered, “then we can flourish throughout Alberta and the western provinces.”

FAST FACTS OIL BOSS RENTALS INC. T: 403.844.3031 Toll-Free: 1.888.844.3031

www.oilbossrentals.com

18

FeBRUARY 2013

YOUR OiL & GAS RENTAL LEADERS YOUR OiL & GAS RENTAL LEADERS • • • •

Jumping Jack Tampers Plate Tamper Hydraulic Mini Excavator Variable Reach Rough Terrain Forklift • Caterpillar Skid Steer Loader • Heater Trailer • Dragon Heater

• • • • • • • •

Office Trailers Roughneck Trailers Shacks/Command Centres Light Towers, 8kW, 20kW Light Towers, 56kW Twin 60kW Genset 20kW Silent Generator Environmental Combo Trailer

• LT/Combo • Elevated Work Platforms • 60' Articulating Self Propelled Work Platform • Portable Catwalks • Rig Mats • Transcube/Fuel Totes

• • • • • • • • •

Hot Tub Units – 30m3 210cfm Compressor Cellular Repeaters Portable Radios MUD-CAN GER-CAN Electric Heaters Herman Nelson Heater Flameless LPG Heaters

Servicing Western Canada LLoydminster

•

Lac La Biche

•

WhitecoUrt

•

r o c K y m o U n ta i n h o U s e

1-888-844-3031 www.oilbossrentals.com

•

KindersLey

COMPANY PROFILE

NCS OILFIELD SERVICES CANADA INC. A Catalyst For Technical evolution

20

FeBRUARY 2013

“NCS research and development efforts span a wide array of new products under development, including a closeable frac sleeve, pump-down Mongoose BHAs, individual frac port pressure and temperature data collection, and a myriad of other unique and valuable projects.

Photo left page: NCS’s test fixtures provide BhA testing at temperature, and in flowing environments.

Photos below: 1. John Ravensbergen, VP of engineering, reviewing test results; 2. NCS’s newly developed i-force sub for downhole force measurements; 3. Don Getzlaf, NCS’s Director of Technology.

”

S

ince the field deployment of its first frac sleeve in 2010, NCS oilfield Services has demonstrated a consistent and effective determination to refine, perfect, and deploy new and innovative ideas to improve the financial performance of its clients. Indeed, the very first NCS frac sleeve went from a napkin drawing to a designed, tested, and field-deployed product in just 59 days. That sort of speed requires focus, commitment, and expertise, along with a dogged determination to achieve one’s goals. To deliver on those core values, NCS has invested in the creation of a leading-edge engineering and design team, located at its facilities in southeast Calgary. The company’s Director of Technology, Don Getzlaf, is leading the NCS engineering team in some groundbreaking directions, producing new tools and methods to further extend the company’s operating envelope, and developing new technologies for multistage fracturing. one good example of new and unique technology under development is the company’s proprietary stress/strain BhA. The device provides high-resolution data that collects accurate information about how much push or pull force is reaching the BhA. This information can be invaluable when combined with surface measurements, as it provides an understanding of the tubing forces and movements along the length of long horizontal laterals, and will result in coiled tubing modelling that can be accurately calibrated against actual downhole data. As a result, those models can subsequently provide a reliable and dependable result, allowing well designs to be extended while maintaining confidence in reaching the desired depths with CTU. It also provides a data-collection platform for the development of new BhAs that are actively being designed, specifically engineered to reach significantly longer lateral depths.

Currently, NCS research and development efforts span a wide array of new products

under development, including a closeable frac sleeve, pump-down Mongoose BhAs, individual frac port pressure and temperature data collection, and a myriad of other unique and valuable projects. In total, NCS has more than 30 individual projects in various stages of development and review, most of which will come to fruition within the coming year. Those projects promise to deliver greater efficiency, cost savings, and improved reliability for NCS clients in 2013.

As stated by eric Schmelzl, NCS VP of Strategic Business, “oil and gas producers are experts in the management of risk; systems that deliver the most reliable and repeatable results are the lifeblood of the well manufacturing process, and those traits are at the heart of all NCS’s R&D efforts.”

To date, the NCS Multistage Unlimited system boasts an operational success rate of more than 96%, and that figure continues to improve, as revisions to various system components have made operational problems more and more infrequent.

“We are getting very close to having a system that is 100% dependable, repeatable, and economical,” Schmelzl says. “our current Multistage Unlimited product offering is nearing the point in its development where it is almost as good as it can possibly be. With that in hand, we are now focusing on developing tools and methods that can make a step change in our operating envelope, and the lessons we have learned along the way will accelerate our progress along that path.”

There is no doubt that NCS is not sitting back or resting on its successes to date. Its investment in R&D activities and resources continues to grow, along with its track record and reputation for exceptional field performance and reliability. As with all entrepreneurial spirits, NCS is not satisfied until the next challenge is conquered, and from higher ground the horizons are extended yet again.

1

3

2

FAST FACTS NCS OILFIELD SERVICES CANADA INC. SALES MANAGER: Lyle Laun T: 403.969.6474 E: LLaun@ncsfrac.com

www.ncsfrac.com

PRoFILeRMAGAZINe.CoM

21

COMPANY PROFILE

INFINITY OILFIELD SERVICES INC. Infinite Service—Infinite Success

I

nfinity oilfield Services is a rapidly growing oilfield services company specializing in water-management systems, remote-access solutions, and wellsite services that enhance client operations and meet regulatory compliance standards, while reducing overall project costs.

Formed in 2002 by Dwight Gallinger and Stacy Peterson, Infinity’s management team brings more than 60 years of oilfield industry experience to the job. Infinity has the knowledge and the experience to get the job done right.

customers, and they mentioned they could use some assistance in implementing a large water-transfer project.”

It was at that point that Infinity entered into the water-management business. The company has since designed and developed a state-of-the-art, electronically controlled pumping and water-management system that is now used by some of the largest oil and gas exploration and production companies operating in the WCSB. Infinity’s electronically controlled water-management system has raised the bar in the water-

“We believe the combination of our water-transfer system, along with water heating and filtration, provides a comprehensive service offering that will allow us to meet our customers’ watermanagement needs.

”

Water management forms the core of Infinity’s service offering, featuring fully automated, environmentally responsible solutions for moving water from remote sources to project sites. With an eye towards helping customers improve their business operations, Infinity entered the water-management business in 2009, in response to a customer’s request to take over their water-management project.

According to Gallinger, “We were doing some well consulting work for one of our

22

FeBRUARY 2013

— Stacy Peterson

management industry. Its customizable system allows users to digitally record volumes, pressures, pumping parameters and water levels at all locations, allowing its clients to meet stringent regulatory requirements related to their water use and permit management.

Infinity utilizes a system of electric submersible pumps and variable frequency drive controllers, along with an intricate SCADA system, to electronically control the flow of water to and from a well-fracturing

location. Depending on terrain and volume needs, Infinity has been able to pump up to 30 km with a single pumping station, at a flow rate of 1.5 m3 per minute. In other customer applications, Infinity has pumped at flow rates of up to 30 m3 per minute.

The strength and reliability of this SCADAcontrolled system has allowed Infinity to provide water to a customer’s well-fracturing operation on a real-time monitoring basis, resulting in a reduction of well-fracturing time, less ancillary equipment on location, less need for storage tanks or water-transport trucks, and an auditable record of water volumes pumped.

According to Peterson: “In an environment of lower commodity prices and increasing completion costs, exploration and production companies are continually looking for safe, cost-effective solutions to improve their bottom line—and we believe our water-management system delivers on all counts.”

The use of Infinity’s water-management system has allowed its clients to reduce the amount of truck traffic on community roads and wellsite locations, resulting in a safer and more cost-effective solution than the traditional approach of trucking water to a well-fracturing location.

To meet its customers’ needs for heated, clean water, Infinity recently added a 21-million-BTU heating system to its operating fleet, as well as self-cleaning filtration systems. The initial heater and filtration systems were added to the fleet in

late 2012, with additional units anticipated to be added in 2013. “We believe the combination of our water-transfer system, along with water heating and filtration, provides a comprehensive service offering that will allow us to meet our customers’ water-management needs,” Peterson says.

Not forgetting its roots, Infinity continues to provide well optimization and wellsite compliance services, such as abandonment consulting, and vent and casing testing.

Infinity’s fleet of remote-access amphibious

vehicles are ideally suited for year-round access into Alberta and B.C.’s northern operating locations. Infinity’s experience allows the company to deliver cost-effective wellsite compliance and optimization solutions for its customers.

“As natural gas prices increase, customers will be looking for effective well-optimization solutions to get their wells back on full production, and we have the knowledge, safety practices and expertise to meet their needs,” Gallinger says.

FAST FACTS INFINITY OILFIELD SERVICES INC. T: 403.230.6031 E: info@infinityoilfield.com

www.infinityoilfield.com

PRoFILeRMAGAZINe.CoM

23

SAFETY Strong safety systems. Thorough training.

Diligent environmental management.

Calfrac believes safety is always a top priority. While we recognize that safety is the joint responsibility of our entire workforce, we also know that it is management’s responsibility to establish strict safety policies and procedures, as well as creating a culture that supports them.

“Goal Zero” is one of these policies and we have proven it is achievable — our Grand Junction, Colorado district operated for 365 days without a lost-time incident. Just one example of Calfrac’s excellent overall safety performance in 2011.

We know what it takes; industry leading safety, training and

www.calfrac.com “WE’RE BREAKING NEW GROUND…. EVERY DAY”

health initiatives — and most importantly, people looking out for one another.