Profiler GPS Issue June 2012

June 2012

With energy to burn, Canada is a global player. It just needs markets for its massive resource base.

Superpower Brought to you in partnership with the: Publications Mail Agreement NO. 40069240

Tight oil plays promise another generation of conventional light oil exploration and development

Short-term pain, longterm gain forecast for Canadian natural gas industry

Rosy forecasts for oilsands production are one thing.

Making them happen is another thing entirely.

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June 2012

Cover story

Publisher Maurya Sokolon | msokolon@junewarren-nickles.com editorial Editor Darrell Stonehouse | dstonehouse@junewarren-nickles.com Contributing Writers Lynda Harrison, Jacqueline Louie, Elsie Ross Editorial Assistance Manager Samantha Sterling | ssterling@junewarren-nickles.com Editorial Assistance Kate Austin, Laura Blackwood, Tracey Comeau, Alison Dotinga, Brandi Haugen, Marisa Kurlovich

Superpower With energy to burn, Canada is a global player. It just needs markets for its massive resource base.

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6

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Features Reversing the decline Tight oil plays promise another generation of conventional light oil exploration and development

16 Working through the glut Short-term pain, long-term gain forecast for Canadian natural gas industry

23 How much, how fast Rosy forecasts for oilsands production are one thing. Making them happen is another thing entirely.

30 Measuring success Service companies enjoy rapid growth in 2011, more cautious in 2012

38

If undeliverable, return to: Circulation Department, 80 Valleybrook Dr, North York, ON M3B 2S9. Made in Canada

Cover illustration by Anthony Tremmaglia

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june 2012

COMPANY PROFILES

64 46

88

3D Drilling Tools Inc www.3ddrillingtools.ca

136

80 Infratech Corporation www.infratech.cc

116 Skyway Canada Limited

www.skywaycanada.ca

48 Alberta Welltest Incinerators Ltd (AWI) www.awincinerators.com

82 IPC – Integrated Protective Coatings Inc www.ipccoatings.com

118 Stewart & Stevenson Canada

www.stewartandstevenson.ca

50 All Around Oilfield Services Ltd www.aaoilfield.com

84 IVIS Inc www.ivisinc.com

52 Apex Equipment Ltd www.apexequipmentltd.com

86

Kudu Industries Inc www.kudupump.com

54

CanElson Drilling Inc www.canelsondrilling.com

88

Meridian www.meridianvalve.ca

56

City of Fort Saskatchewan www.fortsask.ca

90

Meridian Manufacturing www.meridianmfg.com

58

CPTDC www.cptdc.com

92

Myshak Sales & Rentals Ltd www.myshaksales.com

60

Cummins Western Canada www.westerncanada.cummins.com

94

NCS Oilfield Services Canada Inc www.nscfrac.com

96

Nisku Industrial Coatings Ltd www.niskucoatings.com

62 DSI Thru-Tubing Inc www.dsinc.ca

120 Surface Solutions Inc

www.surfacesolutions.ca 122 Thru Tubing Solutions

www.thrutubing.com 124 Triple Random Inc

www.triplerandom.com

64

Firemaster Oilfield Services Inc www.firemaster.ca

98

NWP Industries Inc www.nwp.ca

66

Flo-Back Equipment Rental & Sales www.flo-back.com

100

Podollan Group of Companies www.podollan.com

68

Great North Equipment Inc www.greatnorthequipment.com

102

PROMORE www.promore.com

106

Quantum Downhole Systems www.quantumdownhole.com

70 Hamdon Wellsite Solutions Ltd www.hamdon.net

108 Renegade Oilfield Services

www.renegadeoilfield.ca

72 Hi-Tech Seals Inc www.hitechseals.com

Western Fiberglass Pipe Sales Ltd www.westernfiberglass.net

128

Xtra Energy Services www.xtraenergy.ca

130 Arctic Boilers & Fabricating Ltd

www.arcticboilers.com 131

Calibre Drilling Ltd www.calibredrilling.com

132 Diamond Drill Ltd

www.diamonddrill.ca 133 Hotsy Cleaning Systems

www.hotsyab.com 134

Nu-Line Pipeline Services Inc nuline@ocll.com

135

Panama Enterprises (1990) Inc www.panamawindsocks.ca

136 Team Snubbing Services Inc

www.teamsnubbing.com 137 Victory Pressure Services

ccrawford@gmail.com

110 Rotating Right Inc

www.rotatingright.com

74 Highland Projects www.highlandprojects.com

126

138

76 ICS Group Inc www.icsgroup.ca

112 Sawridge Inns & Conference Centres

www.sawridge.com

78 IHS Energy (Canada) Ltd www.ihs.com

114 Schlumberger Canada Limited

www.slb.com

Willy D Boilers and Fabricating Ltd www.willydboilers.com

ADVERTISERS’ INDEX outside back cover

Convey-All Industries Inc www.convey-all.com

15

FB Industries Inc www.fbindustriesinc.com

inside front cover

Little Guy Oilfield Rentals Inc www.littleguyrentals.com

37

inside back cover

3

Profire Combustion Inc www.profireenergy.com Spirit Pipelines Ltd www.spiritpipelines.ca White Bear Work Wear www.whitebearworkwear.com P R O F I L E R M A G A Z I NE . C O M

5

6

june 2012

Cover Feature

Super
 power With energy to burn, Canada is a global player. It just needs markets for its massive resource base.

By Darrell Stonehouse With notes from the Daily Oil Bulletin staff Illustration by Anthony Tremmaglia

T

here is little question Canada is a global energy superpower. With over 175 billion barrels of reserves in the ground, the country has an over-200-year supply at current production rates. With the advent of horizontal drilling and multistage completions, recoverable natural gas supply stretches at least 100 years.

It used to be Canada had a ready-made market for all the oil and gas it could produce south of the border in the United States. Each day in 2011, Canada shipped more than 2.1 million barrels of oil through pipelines to the United States, making it the number one exporter to the world’s biggest petroleum consumer. In 2010, around nine billion cubic feet of natural gas per day went to the U.S. market, again making Canada the largest exporter.

Energy markets, however, are at a turning point. In developed economies like North America, oil and gas demand is stagnant or declining at a time when domestic production is exploding. In developing countries, demand is climbing and the hunt is on for new supplies. The challenge for Canada is finding ways to prosper in this changing marketplace.

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

7

Cover Feature

Oil With the largest oil market in the world due south, sending excess Canadian oil production to the United States used to be a nobrainer. But with the U.S. government refusing to grant permission for the northern leg of TransCanada Corporation’s Keystone XL pipeline, designed to take around 830,000 barrels a day of oil to Gulf Coast refineries, Canadian companies are having to rethink their export plans.

But the Keystone XL is only a small part of a bigger picture of radical change in the U.S. oil market. In a report released in March, Citigroup says a combination of tight oil and liquids growth, new reserves coming on stream from the deepwater Gulf of Mexico and an increase in bio-fuel manufacturing will drive U.S. liquids production up from nine million barrels per day currently to 15.6 million barrels per day by 2020. Citigroup adds U.S. demand is expected to decline by two million barrels per day over the same time period, due mostly to people driving less and better fuel standards.

While the Citigroup forecast may seem optimistic, they aren’t alone in thinking U.S. liquids supply is set to boom.

Proven-plus-probable

tight oil reserves

500 million barrels

Current

Speaking on Platts Energy Week, Marshall Adkins, managing director and head of energy research for multinational financial services company Raymond James Ltd., said he believes the steady increase in oil supplies, along with the sharp demand decline, have the United States on the road to energy independence. Adkins is co-author of the firm’s just-released research paper, which concludes that not only can the United States drill its way to energy security, but it can do it in less time than just about anyone else predicts.

“We may only have two per cent of the world’s reserves, but we already are producing 10 per cent of the world’s production right now, so the infrastructure and wells that exist in the U.S. are allowing us to produce a whole lot more oil than the reserves there,” Adkins said.

“Secondly, we think those reserves are going to go up, and up meaningfully, now that we’re able to access formations, particularly the shale plays that were uneconomical in the past.”

Technological advances in horizontal drilling have resulted in a fivefold increase in well productivity over the last five years, compared with 20 years of decline in U.S. well productivity

Production

3.5

million barrels per day

Proven oil/field

Condensate Reserves

175.2 billion barrels

The changing oil landscape

The world, in particular Asia, wants Alberta’s resources and our only major constraint is transportation.

An Emerging Oil Superpower

— The Calgary Chamber of Commerce

Production Forecast (million barrels per day all liquids)

Canadian Oil Forecast

Oilsands Production Forecast (million barrels per day)

7

6.5

6 5

4.7

4 3 2

3.5

3.5 2.27

2.02

1 0

2011

2012

2013

Sources: Citigroup, National Energy Board, ERCB

8

june 2012

2014

2015

2016

2017

2018

2019

2020

Cover Feature

Technically recoverable

of about five per cent per year.

“To imagine a 500 per cent increase in well productivity in just a five-year time frame completely changes the game here in the U.S.” Adkins and his colleagues at Raymond James say this will lead to a massive supply increase that “we’re already starting to feel the effects of here in the U.S.” The increase is expected to accelerate in the next year or two as Gulf of Mexico production comes back online.

“If we’re able to grow production in the U.S. 10–15 per cent a year—which we think we can—you combine that with modestly lower demand and within eight to 10 years we think you’re…not going to have to import any more oil. You’re going to be energy independent from an oil perspective,” he said.

In 2010, the United States imported a net 49 per cent of its oil supply and the Raymond James paper shows a much more wildly optimistic scenario compared with the findings of the U.S. Energy Information Administration (EIA), which says the United States will be importing about 37 per cent of its oil supply in 2035.

Adkins said the Raymond James paper started as a study of the current natural gas supply glut

tight oil resource

24

billion barrels

and its effects on future production growth. “What fell out was ‘Wow, U.S. oil supply is really going up fast and it’s really going to completely change the game for the U.S. energy side.’”

The change in U.S. oil and liquids supply dynamics comes at a time when Canada is ramping up production as well. Citigroup sees Canadian liquids production growing from 3.5 million barrels per day in 2011 to 6.7 million barrels by 2020, driven largely by oilsands growth. The Canadian Association of Petroleum Producers is less aggressive in its outlook, seeing total liquids production climbing to around 4.2 million barrels per day.

Both forecasts indicate new markets and transportation infrastructure will be needed for the upswing in production. With five million barrels of heavy oil refinery capacity, the U.S. Gulf Coast is the natural market for most of Canada’s oilsands and heavy oil production, and will remain a primary target. But pipeline bottlenecks in the United States are already costing Canadian producers billions in lost revenues due to increases in oilsands flows and growing production from the Bakken play in North Dakota.

Current

Production

8.1

million barrels per day

Proven oil/field

Condensate Reserves

20.7 billion barrels

“ U.S. oil supply is really going up fast and it’s really going to completely change the game for the U.S. energy side.”

Growing Supply, Shrinking Demand

— Marshall Adkins, managing director and head of energy research, Raymond James Ltd.

16

United States Oil Forecast

Production Forecast (million barrels per day all liquids) Tight Oil/Liquids Production Forecast (millions of barrels)

U.S. Crude Oil Import Forecast (million barrels per day)

14.1

14 12 10 8

10.5

9.21

8.5

8.1

7.44

6 4 2 0

3 2.1 0.7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Citigroup, US Energy Information Administration P R O F I L E R M A G A Z I NE . C O M

9

Cover Feature

“ C anada is leaving billions of dollars on the table with oil and gas producers unable to access higher-price markets.”

Where the opportunity lies

— Ben Brunnen, director of policy and government affairs and chief economist, Calgary Chamber of Commerce

World Oil Demand Forecast (millions of barrels per day)

OECD Countries

Developing Counties

Transitional Economies

World

100 80

97.8

92.9

86.8

60 40

47.2

46

46.1

45.2

41.8

35.9

20 0

5.1

4.8

2011

2012

2013

2014

5.3

2015

2016

2017

2018

2019

2020

World Oil Demand Growth Areas (millions of barrels per day) 8.1

OPEC Countries

9.2

1.8

9.9

8.9

11.6

China

13.8

4.9 6.2

Southeast Asia

6.8

1.4

2011 4

South Asia

4.8

2015

5.8

1.8

2020 3.4 3.7 4

MENA 0.6

increase 2011/2020 5.2

Latin America 0.8

0

7.6

2

4

5.7 6

6

8

10

12

14

16

Source: OPEC 2012 Oil Report

Synthetic crude oil was trading at $21 per barrel under West Texas Intermediate (WTI) in mid-March as oversupply cut demand at U.S. refineries. Western Canadian Select, a heavy blend of crude shipped from Alberta, was trading at a $34-per-barrel discount. Add to this WTI trading at around an $18-per-barrel discount to global barrels like the North Sea standard Brent Crude. In mid-March, synthetic crude was selling at almost a $40-per-barrel discount to global prices while Canadian Select was facing a differential of over $50 per barrel.

10

june 2012

According to Raymond James, raw bitumen producers who must dilute product with condensate for it flow to markets are in even worse shape. Facing a 35 per cent discount against WTI, high condensate prices above WTI are adding to costs and lowering the implied price of bitumen being exported to around $45 per barrel. All told, CIBC World Markets Inc. estimates that the Alberta is losing $18 billion per year because of the failure to diversify markets for oilsands production, and this state of affairs is expected to continue until at least 2014.

Cover Feature

Photo: Joey Podlubny

Boat moving out of Kitimat. The B.C. port is ground zero in Canada’s effort to develop international markets for its oil production.

Canadian pipeline company Enbridge Inc. is offering up a short-term answer to the current bottleneck at Cushing, Okla., that is driving down prices. Enbridge and partner Enterprise Product Partners, L.P. are nearing completion of the first phase of the reversal of the Seaway pipeline, which will provide 150,000 barrels per day of southbound takeaway capacity from Cushing to the Gulf Coast. The reversal is expected to be completed in June. Pump station additions and modifications, which are expected to be completed by the first quarter of 2013, will increase capacity to 400,000 barrels per day, assuming a mix of light and heavy grades of crude oil.

Further ahead are plans to twin the Seaway pipeline, which will add another 450,000 barrels per day of capacity headed to the Gulf Coast by 2015 if the project gets the go-ahead.

TransCanada is also going ahead with building the southern leg of the stalled Keystone XL line (Gulf Coast Project) to push oil from Cushing to Gulf Coast refineries. It expects the 700,000-barrel-per-day line to be open mid-2013. It hopes to have the remainder of the line running from Alberta into Nebraska approved and in service by 2015.

But the arrival of the Seaway and Keystone XL southern leg will only partially help find new markets for Canadian oil. TransCanada estimates that the growth in U.S. light crude oil production will amount to two million barrels per day within the decade, eating up a significant share of new capacity. For production to expand to Citigroup’s optimistic 6.7-million-barrel-per-day forecast, international markets will be needed.

With Asia driving growth in global oil demand, it is the obvious destination for growing Canadian oil supplies. In its 2012 Oil Report, the Organization of the Petroleum Exporting Countries expects demand in Asia to increase by over eight million barrels per day by 2020, led by China where demand is expected grow by almost five million barrels per day.

Currently, Kinder Morgan Energy Partners L.P.’s Trans Mountain Pipeline System, running from Alberta to the West Coast, is the only export route open to Asian markets. It has a capacity of around 300,000 barrels per day. In April, the company announced it was proceeding with a planned expansion that would add an additional 550,000 barrels per day of capacity, with hopes it would be operational by 2017.

Also in the works is Enbridge’s Northern Gateway Project, which would see 525,000 barrels per day shipped to the West Coast from Alberta. National Energy Board (NEB) hearings are underway on the project, which is facing major opposition from First Nations, environmentalists, and the fishing and tourism industries.

Community hearings for oral statements have been scheduled into July 2012 with an NEB decision by the end of 2013. The federal government, though, has served notice that it wants to streamline the regulatory process for major resource projects, including Northern Gateway.

To get growing oil production to market, the Calgary Chamber of Commerce believes energy transportation corridors to Asia need to be built as part of a Canadian energy strategy.

“Canada is leaving billions of dollars on the table with oil and gas producers unable to access higher-price markets,” Ben Brunnen, director of policy and government affairs and chief economist with the chamber, says.

The current supply glut at Cushing has pushed down prices for Alberta producers, he says. With China and other Asian nations offering important new potential markets, “a particularly pressing need is additional energy transportation corridors to the West Coast.”

In releasing its position paper on energy corridors, the chamber pointed to a Wood Mackenzie Limited consultant’s study that estimates that China will need about two million barrels per day of heavy oil by 2020, making it an ideal market for Alberta’s oilsands.

“The world, in particular Asia, wants Alberta’s resources and our only major constraint is transportation,” says the chamber. Better access could mean higher prices for producers and greater tax and royalty revenue for government, it suggests.

“We have a precedent with provincial and federal governments, as well as aboriginal groups, cooperating to increase port, road and rail capacity to enable trade to the emerging Asia-Pacific region,” says the chamber. “Why not build on this momentum and turn the focus to energy transportation?”

However, it warns that Canada must move quickly to seize the opportunity to serve Asian markets.

“And it must be done strategically, rather than one-by-one project approvals.”

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

11

Cover Feature

Canadian proven

Canadian Unconventional Gas Resources (TCF) Gas in Place CBM

investment and between five and six per cent of national GDP (gross domestic product), he points out.

“The Northern Gateway Project, which will source its feedstock primarily from the oilsands, will provide a new west-coast option to access growing Asian markets,” says Brunnen.

The chamber believes that accessing new Asian markets can be done safely and responsibly, says Brunnen. “Our country has, and continues to set, the standard in terms of workplace safety and environmental stewardship.” Northern Gateway has already established a $1.5-million training fund that demonstrates the project’s commitment to creating new opportunities in Canadian communities, he says.

Gas Reserves

Marketable

801

34–129

Tight Gas

1,311

215–476

Shale Gas

1,111

128–343

It will take leadership from Alberta working with its New West Partnership trade partners (British Columbia and Saskatchewan), along with the federal government to establish those west-coast energy transportation corridors, it suggests.

In a letter to the Northern Gateway joint review panel on behalf of the chamber, Brunnen says Canada needs to position itself strategically in response to new market opportunities for energy that are opening up in Asia. The oil and gas industry is a growing part of the Canadian economy, with oilsands investment now representing 25 per cent of total private-sector

62

trillion cubic feet

Canadian annual

Gas Production 2011

6.2

trillion cubic feet

Natural gas If North American oil markets are at a turning point, the continental natural gas market is in total chaos.

With technological advances unleashing a torrent of new supply from shale and tight gas plays, the price of gas has fallen to levels not seen in a decade. And the explosion in U.S. gas

NATURAL GAS

A Full tank but no place to go

9

LNG is priced in relation to oil in Asian markets and is currently trading at about $15 per thousand cubic feet.

Canadian Gas Forecast

Canadian Annual Gas Production Capacity Forecast (TCF)

Canadian Gas Consumption Forecast (TCF)

Canadian Unconventional Gas Production Forecast (TCF)

8

7.7

7 6

7 6.1

5 4 3 2

3.7 3.5

3.3

3.4

2.7 1.8

1 0

2010

2011

2012

Source: US Energy Information Administration

12

june 2012

2013

2014

2015

2016

2017

2018

2019

2020

Cover Feature

U.S. proven

supplies has proven disastrous for the Canadian industry.

Canadian natural gas exports are at a 20-year low, according to the EIA. The EIA reported U.S. production climbed by 4.8 billion cubic feet per day to a record high of over 66 billion cubic feet per day in 2011.

It expects production to climb by another 1.7 billion cubic feet per day this year, despite lower drilling rates. And the news only gets worse.

By 2020, the EIA expects U.S. gas production to increase by around 3.6 trillion cubic feet from current levels, with pipeline imports declining by 2.2 trillion cubic feet per year.

Where does this leave the Canadian gas industry?

In a desperate hunt for alternative markets for its own growing supply. And, like with oil, the country is looking to Asia as the answer to the export quandary.

According to the EIA, global gas demand is expected to climb by 20.5 trillion cubic feet by 2020, led by China, where demand is expected to climb by 2.5 trillion cubic feet from 2011 levels. Much of this will be met by liquefied natural gas (LNG).

LNG is priced in relation to oil in Asian markets and is currently trading at about $15 per thousand cubic feet.

Gas Reserves

272 trillion cubic feet

U.S. Unconventional Gas Resources (TCF) Technically Recoverable CBM

125

Tight Gas

450

Shale Gas

850

Canada has seven planned LNG export terminals announced.

KM LNG Operating General Partnership, which late last year received its 20-year export licence approval from the NEB, is the front-runner at this point. Its proponents—including Apache Corporation, EOG Resources, Inc. and Encana Corporation—propose to build a facility near Kitimat, B.C. A final investment decision is expected in the last half of the year.

The NEB also approved earlier this year BC LNG Export Co-operative LLC’s 20-year licence to export LNG from Canada to the Pacific Rim. This would be a smaller-scale project near Kitimat.

Progress Energy Resources Corp., in partnership with Malaysia-based PETRONAS, is

U.S. annual

Gas Production 2011

21.6 trillion cubic feet

The big wildcard in the LNG market is the United States, which is also looking for a home for its growing gas production. There are currently seven facilities in the planning stages.

Moving the Importer to Exporter

United States Gas Forecast 20

U.S. Annual Gas Production Capacity Forecast (TCF)

U.S. Annual Gas Import Forecast (TCF)

U.S. Unconventional Gas Production Forecast (TCF)

25

25.2

23.7 21.6

20 15

15.6

14.8 12.7

10 5 2.6

0

2010

1.7

2011

2012

2013

2014

2015

0.3

2016

2017

2018

2019

2020

Source: US Energy Information Administration

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

13

Cover Feature

Over the past five to six months, lower natural gas prices have resulted in seven billion cubic feet per day of fuel switching from coal to natural gas for electrical generation in North America, according to Encana.

Emerging markets for Natural Gas

160

Global Gas Demand Forecast TCF/Year

Americas

India

China

Middle East

World

140 120 100

133.4

123.1 112.9

80 60 40 20 0

14.7

2.4 3.3

2010

32.2

31.1

29.3 12.5

17

3.3 5.3

2011

2012

2013

2014

2015

3.9 6.8

2016

2017

2018

2019

2020

Source: US Energy Information Administration

conducting a feasibility study into a possible LNG plant that would one day send North Montney natural gas to Asia.

In October, Cenovus Energy Inc. sold its terminal facilities at the former Methanex Corporation site near Kitimat to Royal Dutch Shell plc. Shell is exploring the potential for an LNG export terminal on the site. Its partners include Korea Gas Corporation, Mitsubishi Corporation and China National Petroleum Corporation.

Nexen Inc. late last year reached an agreement with a consortium led by Japanese oil and natural gas producer INPEX Corporation to develop shale gas in the Horn River, Cordova and Liard basins of northeastern British Columbia. Nexen said the partners will investigate the feasibility of a potential downstream project—including LNG exports.

Talisman Energy Inc. said earlier this year that it’s looking at LNG as an option for its Montney gas assets in British Columbia. The company and Sasol Limited are looking into the feasibility of building a gas-to-liquids plant somewhere in western Canada.

And United Kingdom–based BG Group plc confirmed that it is assessing the feasibility of an LNG export facility in the Prince Rupert area.

But the country has major competition from Australia and the United States. Australia already produces around 20 million tonnes of LNG annually and is in the midst of a construction boom.

Projects underway include Pluto (4.3 million tonnes a year), Gorgon (15 million tonnes), Wheatstone (8.9 million tonnes) and Ichthys (8.4 million tonnes).

Exports of LNG are also expected from Australia’s east coast, with three projects based on coal seam gas with Queensland Curtis LNG (8.5 million tonnes a year), Gladstone LNG (7.8 million tonnes) and Australia Pacific LNG (4.5 million tonnes) committed or under 14

june 2012

construction. Australia’s first floating LNG project, Prelude Floating (3.6 million tonnes a year), is also under construction.

Canada has enormous productive potential in the Horn River, Liard and Cordova Basin shale areas, and in the Montney, says Chris Theal, president and chief executive officer of Kootenay Capital Management Corp. However, the addition of several LNG projects will not have a sustained impact on gas prices, he predicts.

The 1,000 new wells that came on production in western Canada between 2004 and 2006 added negligible amounts of gas production, barely replacing declines. But drilling 1,000 wells in the more productive Haynesville or Horn River plays can bring on between four and five billion cubic feet per day very quickly.

Asia is currently taking roughly 20 billion cubic feet per day of LNG and analysts predict that will rise to 35 billion cubic feet per day by 2020, a growth rate of more than six per cent per year.

The big wildcard in the LNG market is the United States, which is also looking for a home for its growing gas production. There are currently seven facilities in the planning stages.

The oilsands will also provide an outlet for Canada’s burgeoning supplies. A recent study by the Canadian Energy Research Institute found the oilsands’ need for natural gas is expected to double or triple by 2045. The oilsands currently use around 1.2 billion cubic feet per day. That number is expected to more than double by 2020, according to the Alberta Energy Resources Conservation Board.

Using natural gas to replace coal in power generation is already eating up surplus gas. Over the past five to six months, lower natural gas prices have resulted in seven billion cubic feet per day of fuel switching from coal to natural gas for electrical generation in North America, according to Encana.

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Feature

Reversing

I

t’s hard to overstate the importance of the technologically driven tight light oil boom to Canada’s conventional oil industry.

Since 1973, the country has been waging an unsuccessful battle against production declines, seeing rates drop from around 635,000 barrels per day to 346,000 barrels per day in 2010.

Since then, however, the decline has been stemmed. In 2010, conventional oil production declined only 0.4 per cent in Alberta, compared to a decline of 8.6 per cent the previous year and an average decline of 4.2 per cent over the last five years. In 2011, the province is expecting production to have increased by 6.4 per cent when the numbers are finally tallied.

In Saskatchewan, annual oil production reached 157.8 million barrels in 2011, the second highest on record, and exceeded only by the 161 million barrels produced in 2008 when the price of oil exceeded $140 per barrel, according to the Ministry of Energy and Resources.

The 2011 figure is up 3.5 million barrels from 2010, the ministry said.

Energy and Resources Minister Bill Boyd said the 2011 production figure is all the more remarkable given the wet spring and extend road bans the industry had to deal with last year.

“Spring flooding in our oil-producing regions really set the industry back, but they came on strong over the second half of 2011,” Boyd said.

Due to flooding, production was as low as 393,000 barrels per day in June, but recovered to a peak of 475,000 barrels per day in December. The average for the year was 432,000 barrels per day.

the decline

Tight oil plays promise another generation of conventional light oil exploration and development

By Darrell Stonehouse With notes from the Daily Oil Bulletin staff

Western Canadian Conventional Production & Forecast 2008

2009

2010

Light & Medium

593 Mbbl 51.6%

567 Mbbl 52.2%

573 Mbbl 50.1%

Conventional Heavy

411 Mbbl 35.8%

Pentanes/Condensate

2011

2012 610 Mbbl 55.3%

1,098 Mbbl Total

128 Mbbl 11.6%

Mbbl Total

145 Mbbl 12.6%

599 Mbbl 54.4% 371 Mbbl 33.9%

1,149

367 Mbbl 33.3% 125 Mbbl 11.4%

1,085

380 Mbbl 35.0%

Mbbl Total

138 Mbbl 12.8%

2015

Forecast

1,102 Mbbl Total

630 Mbbl 57.2% 353 Mbbl 31.2% 120 Mbbl 10.8%

1,082

375 Mbbl 34.4%

Mbbl Total

134 Mbbl 12.5%

2020

Forecast

1,103 Mbbl Total

572 Mbbl 57.8% 304 Mbbl 30.8%

Forecast

990

Mbbl Total

114 Mbbl 11.4% Source: Canadian Association of Petroleum Producers

16

june 2012

Feature

The tight oil revolution has created decades of drilling opportunities and future enhanced recovery schemes.

Conventional Oil Reserves & Resources

Oil Wells Completed in Canada 2007

2008

2009

2010

2011

2012

Western Canadian Conventional Oil Original resource in place

98 billion barrels

Tight Oil Original resource in place (established plays)

40 billion barrels Current proven-plus-probable tight oil reserves

(forecast)

Photo: Aaron Parker

3,215 5,202

4,987

5,141

Undeveloped resource

77 billion barrels

500 million barrels Conventional heavy oil in place

49 billion barrels

7,384

Current proven reserves

10,400 Source: Canadian Association of Petroleum Producers

4.1 billion barrels

Current proven reserves

1.4 billion barrels

Source: Canadian Association of Petroleum Producers, National Energy Board P R O F I L E R M A G A Z I NE . C O M

17

Feature

Western Canadian Tight Oil Overview HORIZONTAL WELL LICENCES

TIGHT OIL PRODUCTION 30,000

4,000

2,500

Production (m3/d) & Producing Well Count

3,000

2,000 1,500 1,000 500

20,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

160,000

120,000

15,000 80,000 10,000 40,000

5,000 0

0

Alberta Manitoba Saskatchewan Producing Well Count

25,000

Production (bbls/d)

Manitoba Saskatchewan Alberta

3,500

2005

2006

2007

2008

2009

2010

2011

0

Source: The National Energy Board

Statistics released by the Manitoba government show a sharp rise in exploration and production. There were 3,300 wells in the province last year that produced a total of 29,000 barrels per day—that compares with 11,020 barrels per day produced in 2004.

Driving the production increases has been the application of extended-reach horizontal drilling and multistage fracturing techniques developed in shale gas plays to tight oil.

The National Energy Board (NEB) recently took a look at Canada’s tight oil development. The NEB says while it’s too early to estimate the ultimate impact of exploiting tight oil on Canada’s production numbers, initial results look encouraging. The NEB points out that the Alberta Energy Resources Conservation Board’s latest Supply and Demand report estimates that Alberta’s tight oil plays will add an additional 170,000 barrels per day to conventional light oil production by 2014.

Over the last five years, PetroBakken Energy Ltd. and Crescent Point Energy Corp. have consolidated much of the play through corporate takeovers and land sales.

Crescent Point president and chief executive officer Scott Saxberg told the recent Canadian Association of Petroleum Producers investment symposium the company now has over 1,000 net sections of land in the Bakken and over 3,800 drilling locations. Saxberg said technology in the play continues evolving, with the hopes of capturing even more of the oil trapped in the tight shale.

“In the last six months alone, we’ve gone from cemented liners using 10–20 stages with larger fracs, to now dialing it in more and going with 25-stage, cemented-liner, smaller-sized fracs,” he explained. “We’re penetrating more rock and seeing significant improvements in productivity.”

“ O ver the last four years, the reserve assignments for these wells has increased 68 per cent without us doing anything to them—just by proving over time the validity of our technology.”

— John Wright, president and chief executive officer, PetroBakken Energy Ltd. In Saskatchewan, tight oil production in the first quarter of 2011 was 90,000 barrels per day, while Manitoba reached 25,000 barrels per day. Companies have so far identified just over 500 million barrels of proved and probable reserves in their plays of interest and not all companies active in those plays have issued formation-specific reserves. The NEB believes the current reserve estimates represent enough oil to provide production of about 13,000 barrels per day over a period of 10 years.

“As well, the technologies used to develop tight oil will continue to evolve, likely increasing the amount of recoverable oil from these plays,” it comments. All told, there could be more than 40 billion barrels in play not including the Duvernay and Nordegg that are too early to estimate the resource in place.

Tight oil explorer and developers are even more optimistic than the NEB. And early results from the five most advanced plays agree.

The Bakken The Bakken play in southeastern Saskatchewan and southwestern Manitoba is the oldest of Canada’s tight oil plays.

18

june 2012

PetroBakken is also bringing new technology to bear on the Bakken while expanding the boundaries of the play into zones once thought untappable. It announced the first commercial application of CleanTech completion fluid in the Bakken in May. The new fluid allows better control of fracture treatments, enabling the company to avoid breaking out of the pay zone into water zones.

“It’s a process that allows us to carry a lot of sand in our fracture treatments into the reservoir, but we get to deliver it at very low rates and very low pressures, which avoids the breaking out of the formation,” says company president and chief executive officer John Wright.

By maintaining the frac within the Bakken formation, the operator avoids breaking into other zones, which may cause water incursion.

“This allows us to increase the economic practicality of drilling at the peripheral edges of the Bakken play and expands our opportunities.”

He said CleanTech is “creating value where before we had written off the potential for the Bakken, and now we’re applying this technology to all of the wells in this region.”

One of the major concerns with the new extended-reach horizontal drilling and multistage fracturing technology was that high decline

Feature

Bakken HORIZONTAL WELL LICENCES

TIGHT OIL PRODUCTION

1,200 Production (m3/d) & Producing Well Count

800 600 400 200

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

14,000

Torquay Bakken/Torquay Bakken/Three Forks Bakken Producing Well Count

12,000 10,000 8,000

80,000

60,000

40,000

6,000 4,000

Production (bbls/d)

Three Forks Torquay Bakken

1,000

0

100,000

16,000

20,000

2,000 0

2011

2005

2006

2007

2008

2009

2010

2011

0

Source: The National Energy Board

rates would make wells uneconomic before recovering most of the potential reserves available. In May, Wright cited the 68 per cent increase in reserve bookings for the company’s first six Bakken wells as validation of its technology and play concepts.

Independent evaluators assigned 100,000 barrels of proved-plusprobable oil reserves per well to each of the original six horizontal Bakken wells drilled by the company in 2006. Bookings increased in 2007, 2009 and again last year, when evaluators estimated the ultimate recovery will be 168,000 barrels of oil per well.

“By the way, these are not in any way the best wells we drilled.

They’re the first wells we drilled into the Bakken,” Wright says. “But over the last four years, the reserve assignments for these wells has increased 68 per cent without us doing anything to them—just by proving over time the validity of our technology.”

Of the 1.8 billion barrels of discovered petroleum initially in place on the company’s Bakken lands, only five per cent has been booked as proved-plus-probable reserves.

“We actually think there’s a potential for reserve booking of more than 25 per cent once you include the effect of our enhanced oil recovery programs,” Wright adds. “And that’s not only going to increase our ultimate reserves, but it will mitigate the decline rates.”

Crescent Point is also advancing its enhanced recovery scheme in the play.

Production performance from water injection patterns in the Viewfield Bakken resource play continues to exceed its expectations and has

demonstrated the applicability of waterflood to the play, according to Crescent Point. During the final quarter of 2011 it began injecting water into four additional wells. By year-end 2011, the company had converted a total of 24 producing wells to injection wells in the play. Including wells converted to date in 2012, Crescent Point has 32 water injection wells in the play and expects to have approximately 60 by year-end 2012.

With the recently announced agreement to acquire PetroBakken Energy’s interests in the proposed Viewfield Bakken waterflood area, Crescent Point says it plans to accelerate plans to implement unit-wide waterfloods.

Ultimately, the company believes it can deliver around 300 million barrels of oil reserves from the Bakken, with production reaching as high as 266,000 barrels per day.

Lower Shaunavon The Lower Shaunavon medium oil resource play in southwestern Saskatchewan is also booming. With more than four billion barrels of original oil in place, the pool is one of the largest oil pools ever discovered in western Canada. Crescent Point Energy has over 450 net sections in the play. It has been proving up that acreage and turning the massive resource into reserves.

“The Lower Shaunavon is three years behind the Bakken,” Crescent Point’s Saxberg recently told shareholders. “What we’re basically doing is taking the technology and knowledge from the Bakken and applying it there.”

Lower Shaunavon TIGHT OIL PRODUCTION

HORIZONTAL WELL LICENCES 250

Lower Shaunavon

200

150

100

50

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

12,000

Lower Shaunavon Production Producing Well Count

1,600

10,000 8,000

1,200

6,000 800

Production (bbls/d)

Production (m3/d) & Producing Well Count

2,000

4,000 400

0

2,000

2006

2007

2008

2009

2010

2011

0

Source: The National Energy Board P R O F I L E R M A G A Z I NE . C O M

19

Feature

Viking HORIZONTAL WELL LICENCES 1,200

Saxberg says Crescent Point and other players like Cenovus Energy Inc. and Wild Stream Exploration Inc. (purchased by Crescent Point in January) have had great success in expanding the Lower Shaunavon play and adding to the resource base. Last year, Crescent Point drilled a series of step-out wells in the northern part of the play and added 150 million barrels of oil in place to its resource tally. Crescent Point and Cenovus found by drilling in the heart of the play that what was originally thought were two different fields were actually connected, adding another 150 million barrels.

“In the southern part of the field, we rediscovered an area of the Upper Shaunavon, a tight oil play drilled vertically in the past,” Saxberg says. “Ourselves and Wild Stream have been drilling the pool and we believe there are 700 million barrels of oil in place.

“That’s one billion barrels of oil in total for the three areas,” he adds. “Five or six years ago, this would have been the biggest oilfield discovered in 50 years, so it’s a pretty incredible amount of new oil.”

Saskatchewan Alberta

1,000 800 600 400 200 0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

TIGHT OIL PRODUCTION Saskatchewan Alberta Producing Well Count

2,500 2,000

16,000

12,000

1,500 8,000 1,000

Production (bbls/d)

Production (m3/d) & Producing Well Count

3,000

4,000

500 0

2008

2009

2010

2011

0

Source: The National Energy Board

Cardium HORIZONTAL WELL LICENCES 800 700

Cardium

600 500 400 300 200 100 0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

TIGHT OIL PRODUCTION 40,000

Cardium Production Producing Well Count

5,000

30,000

4,000 20,000

3,000

Production (bbls/d)

Production (m3/d) & Producing Well Count

6,000

2,000 10,000 1,000 0

2008

2009

2010

2011

0

Source: The National Energy Board 20

june 2012

The Viking The Viking tight oil play runs from Saskatchewan across east-central Alberta to the north of Edmonton. Less prolific than the Bakken and Shaunavon plays, its lower drilling and completion costs are a significant attraction for developers, as is its four billion barrels of oil in place with only 12 per cent produced.

WestFire Energy Ltd. holds 244 undeveloped net sections of land on the Viking play, containing in excess of 1,000 net risked (3,800 unrisked) identified horizontal oil development locations, representing an eight-year (risked) drilling inventory at the company’s current rate of activity.

WestFire pumped up the volumes from its Viking light oil play where average production of 4,073 barrels of oil per day (93 per cent oil) was achieved with a first quarter exit rate of 5,143 barrels per day.

WestFire is using a modified hot frac completion technique to generate enhanced Viking productivity.

At Redwater, north of Edmonton, the company said its modified hot frac completion technique has “delivered superior results,” with firstquarter wells “significantly outperforming” previous wells in the area using typical completion techniques in the area.

Initial 30-day production rates from 12 of WestFire’s most recently completed modified hot-frac-operated wells have averaged 96 barrels of oil per day, which is resulting in well performance that is exceeding the production profile in the company’s 2011 year-end independent reserves report. WestFire said that one recent well has averaged 157 barrels of oil per day as compared to 49 barrels per day for an adjacent well in the same quarter section, which was completed prior to the implementation of the company’s modified hot frac technique.

“The initial production rate from this adjacent infill well is the highest that WestFire has achieved in the Redwater area to date,” the company said. “These results reflect the marked improvement in completion technology that can be applied to WestFire’s significant inventory of identified horizontal drilling locations in Redwater.”

At Plato, Sask., the company said it has realized “better-than­anticipated” results. Initial 30-day production rates from 12 of its most recently completed operated wells have averaged 66 barrels per day of crude oil with one of these wells averaging 103 barrels per day.

WestFire’s recent success in Plato is also attributed to the application of the modified hot frac completion technique, which is

Feature

Montney/Doig HORIZONTAL WELL LICENCES

In the last three years, a tight-oil drilling boom has enveloped the Cardium play with over 800 wells drilled in 2011. Production is now over 40,000 barrels per day.

180 160

Montney/Doig

140 120 100 80 60 40 20 0

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

TIGHT OIL PRODUCTION Production (m3/d) & Producing Well Count

1,000

6,000

Montney/Doig Production Producing Well Count

800

5,000 4,000

600

3,000 400 2,000 200

1,000

0

2008

2009

2010

2011

0

Source: The National Energy Board

Spearfish HORIZONTAL WELL LICENCES 350

Spearfish

300 250 200 150 100 50 0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

TIGHT OIL PRODUCTION 16,000

Production (m3/d) & Producing Well Count

2,500

2,000

Spearfish Production Producing Well Count

12,000

1,500 8,000 1,000 4,000

500

0

Production (bbls/d)

The Cardium There is around 12 billion barrels of oil in place in the Cardium play in central Alberta, making it the largest pool ever discovered in western Canada. In the last three years, a tight-oil drilling boom has enveloped the play with over 800 wells drilled in 2011. Production is now over 40,000 barrels per day.

Spartan Oil Corp., a spin off from the recent takeover of Spartan Exploration by Penn West Exploration, is one of a number of companies testing different completion technologies to optimize production and resource recovery in the tight Cardium play.

Spartan is spending $127 million this year, with the majority going to its Keystone project in the Cardium. The company says it will drill up to 49 (46.6 net) Cardium horizontal wells during 2012. Spartan expects its revised 2012 budget to yield average production in the range of 2,600–2,800 barrels of oil equivalent per day (83 per cent oil and liquids) and exit production of 4,300–4,500 barrels per day (84 per cent oil and liquids).

To date in 2012, the company has drilled a total of 12 (10.3 net) horizontal wells targeting Cardium oil at its Keystone property. This brings the total well count to 27 (22.1 net) horizontal wells drilled since Spartan began operations on June 1, 2011.

The company noted that it has used several different completion techniques in an effort to maximize the productivity of the wells, including oil-based fracs, nitrified surfactant foam fracs, gelled water fracs and slickwater fracs.

“We have seen improvements in both productivity and costs as a result of these efforts,” the company said.

Of the wells drilled to date in 2012, two (1.5 net) have been completed with nitrified surfactant foam fracs, six (5.9 net) have been completed with slickwater fracs and one (0.97 net) has been completed with a gelled water frac. Results are still preliminary, but the company said it is “very encouraged” by the initial results from the slickwater fracs. There is not enough production data available to date to assess the results on the gelled water completion.

As an example of this, the company recently completed two wells in the interior of Unit 2 that are in close proximity to each other.

2001

Production (bbls/d)

also resulting in well performance that is exceeding the production profile in the company’s 2011 reserve report.

Initial production rates in both areas have been purposely constrained by WestFire in order to maximize ultimate reserves recovery.

The company expects that application of this completion technique on its extensive drilling inventory at Dodsland, Sask., and Provost, Alta., will generate similarly positive results when development activities are extended to these areas.

2000

2009

2010

2011

0

Source: The National Energy Board P R O F I L E R M A G A Z I NE . C O M

21

Feature

One of the wells was completed with a 17-stage slickwater frac and the other was completed with a 17-stage nitrified surfactant foam frac.

The initial 30-day production (IP30) rate for the well that received the slickwater frac treatment was 145 barrels of oil per day, while the other well achieved an IP30 rate of 119 barrels per day. Spartan’s unrisked type well for the interior of the unit has an IP30 rate of 120 barrels per day.

The company currently has a total of 25 (17.9 net) Cardium horizontal oil wells producing in the Keystone area and an additional five (4.9 net) Cardium horizontal wells awaiting completion and/or tie-in. Current production is approximately 2,300 barrels per day, based on field estimates.

Swan Hills/Beaverhill Lake Carbonate The northern tight light oil carbonate play took off in earnest in 2011 with over 300 wells drilled into Swan Hills and Slave Point rock.

Production is now over 14,000 barrels per day and growing.

Penn West Exploration has more than 380,000 net acres in the carbonate trend. It drilled 40 appraisal and development wells last year and this year is embarking on a full out development program.

“With seven active drilling rigs, we anticipate spending between $300 [million] and $350 million,” said the company. “The focus of our program will continue to be on the Slave Point to take advantage of the predictability of this play and our pre-built infrastructure.”

Penn West has been drilling 1,200–1,400-metre laterals in the play, and is averaging 10–12 fracture stages. It is using 900–1,000 cubic metres of hydrochloric acid per stage.

In the Slave Point play, it reported success with a dual lateral well earlier this year. Initial production averaged over 500 barrels of oil equivalent, with reserves per well coming out at between 425,000 and 475,000 barrels. The company expects to drill as many as 25 dual lateral wells in 2012.

Arcan Resources Ltd. has over 170 net sections of land in the play at Swan Hills with an estimated 700 million barrels of oil equivalent in place. The company says it has over 400 potential horizontal drilling locations in play. Yet, despite that inventory, it is already working on waterflood schemes to drive long-term production.

Arcan has reported strong results in the Beaverhill Lake play so far in 2012.

“Operationally, our drilling and completion work went very well through the winter season,” said Arcan chief executive officer Ed Gilmet. “We were particularly satisfied with the results of our first well in the Virginia Hills area, which exceeded our expectations for initial production. Our total production dropped in January 2012 and February 2012 from our 2011 exit levels, as we shut in six wells in January 2012 that were completed in December 2011, after the initial cleanup and test phase in order to equip them and install artificial lift.

While monthly production fluctuates with operational requirements, we are achieving our longer-term drilling program objectives and beginning to see the upside in our asset base.”

Arcan drilled and completed the Virginia Hills 13-32-64-13W5 (“13-32”) Beaverhill Lake horizontal well, with excellent results. The 13-32 well was drilled to a total depth of 4,505 metres and flowed at a rate of 1,773 barrels of oil equivalent per averaged over the first seven days and 1,226 barrels averaged over its initial 21-day production period, with maximum day rates of 1,900 barrels (92 per cent light oil), flowing dry oil up 4.5-inch casing.

Arcan currently owns 10 sections of land at Virginia Hills and plans to drill up to an additional five wells in the area in 2012. Currently, one additional well is licensed and six more wells are in various stages of the licensing process.

The 13-32 well was completed using a 24-stage, STIM 28 blended acid fracturing program specifically designed by StimSol Canada Inc. to complement the rock and pore-fluid properties in the Virginia Hills area. Prior to its use for the 13-32 well, Arcan used the STIM 28 frac blend for wells completed on its Deer Mountain and Ethel properties.

StimSol has the ability to modify its STIM 28 frac blend for different reservoir types in order to increase the blend’s compatibility and effectiveness.

Since the commencement of its 2011-12 Ethel winter drilling program in November 2011, Arcan has drilled 16 wells, including 11 wells drilled in the first quarter of 2012. In excess of 55 horizontal wells have been completed to date, with 13 of those brought on production in the first quarter of 2012.

Beaverhill Lake/Slave Point HORIZONTAL WELL LICENCES

TIGHT OIL PRODUCTION

350

Slave Point Beaverhill Lake

250 200 150 100 50

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2,000

Slave Point Beaverhill Lake Producing Well Count

12,000

1,500 8,000 1,000 4,000

500

0

Production (bbls/d)

Production (m3/d) & Producing Well Count

300

0

16,000

2,500

2009

2010

2011

0

Source: The National Energy Board 22

june 2012

Feature

Working through the glut

By Darrell Stonehouse

Photo: Joey Podlubny

With notes from the Daily Oil Bulletin staff

Short-term pain, long-term gain forecast for Canadian natural gas industry

T

en lost years.

That’s how far the North American shale gas revolution has set back natural gas prices headed into the summer of 2012.

And the short-term forecast for the remainder of 2012 and 2013 looks just as moribund.

Natural gas production levels are expected to continue to surpass peak North American storage levels heading into the summer injection season, putting further pressure on gas prices, says AJM Deloitte in a report in which it reduces its gas-price forecast.

By the start of the next withdrawal cycle in November, there will be an unprecedented P R O F I L E R M A G A Z I NE . C O M

23

Feature

THE BAD NEWS Canadian Marketable Natural Gas Reserves (tcf) 63 61

61.95

61.95

2010

2011

59 57 57.95

58.20

57.91

2007

2008

2009

55 53

Canadian Natural Gas Deliverability (bcf/d) LOW PRICE

MEDIUM PRICE

HIGH PRICE

12.0

13

13.6

13.2

14.2

14.0

14.6

13.1

14

14.5

14.1

14.6

15

14.6

14.6

16

12 11 10

2011

2012

2013

2014

Natural Gas Wells Drilled (Western Canada) 10,000 9,626

8,000

8,104

6,000 4,000 2,000

3,387

3,425

2009

2010

2,695

1,000 0

2007

2008

2011

Natural Gas Price Forecast (Alberta reference price, in gigajoules) LOW PRICE

MEDIUM PRICE

HIGH PRICE

$6

$5.22

$5

$4.53

$4.12

$4 $3

$2.15

$1.98

$1.86

$2

$3.69

$3.51

$3.11

$1 $0

2012

2013

2014 Source: National Energy Board

24

june 2012

900 billion cubic feet of Canadian gas in storage, exceeding the three-year maximum average of about 625 billion cubic feet, says the company. A mild winter, continuing growth in supply and a weak economic recovery did little to draw down the record-high levels of storage heading into this past winter, it notes.

“Even the estimation of a colder winter over 2012-13 will not significantly reduce storage levels to impact any noticeable price recovery into next year,” it says. “Until there is a clear indication of a sustained return to growth in the U.S. economy, there will be limited increase in demand on the industrial-usage side of the equation, thus maintaining a low natural gas price.

As a result, AJM Deloitte is forecasting an AECO gas price of C$2.30 per thousand cubic feet and a NYMEX price of US$2.80 per thousand cubic feet for the remainder of this year. Moving into 2013, it has an AECO price of C$3.20 and a NYMEX price of US$3.50.

Despite the price collapse, in March the U.S. Energy Information Administration (EIA) raised its estimate for American natural gas production growth in 2012, expecting output this year to be up 2.6 per cent from 2011’s record levels.

This was the second straight month EIA increased its production estimate for this year despite a steep slide in the gas-directed rig count and planned output cuts by several key producers that have been squeezed by low dry prices.

In its April Short-Term Energy and Summer Fuels Outlook, the EIA said it expected marketed natural gas production in 2012 to rise by 1.7 billion cubic feet per day to a record 67.91 billion cubic feet a day, up from its February outlook that had output rising 2.3 per cent this year to 67.64 billion cubic feet daily.

EIA sees production next year growing by another 0.57 billion cubic feet a day, or ­ 0.8 per cent, to 68.48 billion cubic feet per day.

While projected gains in production were expected to slow, EIA noted that recent declines in the Baker Hughes Incorporated gas-drilling rig count have so far not impacted production, reflecting improved drilling efficiency, higher wet gas output and more associated gas produced from oil wells.

Baker Hughes data in April showed the gas-directed rig count fell to a 31-month low of 691.

The impact of continued growth in short-term U.S. gas supply on Canadian producers will be significant, according to the National Energy Board (NEB).

In its study, Short-term Canadian Natural Gas Deliverability 2012–2014 - Energy Market

Feature

Assessment, the board sets out lower, mid-range and higher-price cases for natural gas based on market factors.

In the middle-case scenario, the NEB expects the current oversupply of gas in North America to continue to drive Canadian and U.S. natural gas prices below 2011 prices of US$4 per million British thermal units.

Although prices are expected to rise gradually to $4.50 per million British thermal units in 2014 from $3.75 per million British thermal units this year, producers would continue to reduce drilling, especially for dry gas, as much of it would still be uneconomic, says the study. Natural gas drilling would occur where natural gas liquids contents are high enough to make production economic.

The same case forecasts that Canadian gas prices would increase to C$3.69 per gigajoule in 2014 from $3.11 per gigajoule this year.

With a decrease in overall gas drilling, Canadian daily production would decline to 13.2 billion cubic feet per day in 2014 from 14 billion cubic feet in 2013 and 14.5 billion cubic feet in 2012, while U.S. production growth would slow. A gradual increase in demand for natural gas would reduce the supply, and prices would begin to rise and slowly increase, says the study.

Increased oil-targeted drilling with associated and solution gas will contribute additional gas to overall production, but total gas deliverability will still be less than deliverability of 14.6 billion cubic feet per day in 2011, according to the NEB. In the mid-range price case, Canadian natural gas deliverability will continue to be well above Canadian demand, although the rate of decline in overall deliverability would slow slightly due to higher productivity wells coming on stream. Tight gas and shale gas activity are forecast to stabilize in 2012 with 229 wells drilled in the Montney and 39 in Horn River.

Horn River deliverability would decline to 522 million cubic feet per day in 2014 from 555 million cubic feet per day this year, while Montney deliverability would increase to 1.95 billion cubic feet per day from 1.62 billion cubic per day in the same period.

In the mid-range case, the number of Canadian gas-intent wells drilled would decline to 1,384 in 2014 from 2,159 wells in 2012 and 1,755 wells in 2013. Last year, producers drilled an estimated 2,782 gas wells. At the same time, gas wells’ share of drill days is projected to decline to 20 per cent in 2014 from 25 per cent in 2013 and 30 per cent this year. In 2011, gas wells accounted for 37 per cent of drill days.

THE GOOD NEWS Unconventional Gas: A 100-year supply ORIGINAL GAS IN PLACE

= 50 trillion cubic feet

MARKETABLE RESOURCES

CONVENTIONAL NATURAL GAS 357 692

51.5%

TIGHT GAS 215–476 16.4–36.3%

1,311

COALBED METHANE

34–129

4.2–16.1% 801

SHALE GAS 128–344 11.5–31.0% 1,111

Unconventional Gas Production Capacity Forecast (bcf/d) 2020 2015 2011

4.9

7.3

9.8

Source: National Energy Board P R O F I L E R M A G A Z I NE . C O M

25

Feature

LNG EXPORTS

plan targeting liquids-rich plays had increased liquids production 26 per cent over the first quarter of 2011 to about 29,000 barrels per day.

The company is targeting four plays in the United States and the Duvernay play in Alberta.

In the Alberta Duvernay, where Encana holds about 370,000 net acres, the company has drilled and completed three horizontal wells with lateral lengths up to 6,300 feet. Encana has obtained core and reservoir data on each well and says it is encouraged by the results, which confirm initial expectations. Each of the wells tested has flowed significant condensate volumes with favourable condensate-to-gas ratios in line with other industry-announced results.

Encana has two rigs drilling in the Duvernay.

The natural gas giant has also been rationalizing its assets and bringing in partners to help weather the storm and help drive new demand for gas. In recent months, it sold Cutbank Ridge natural gas processing assets for $920 million and formed a partnership on some of its Cutbank Ridge assets with Mitsubishi Corporation for $2.9 billion. In April, Encana signed an agreement with a subsidiary of Toyota Tsusho

Proposed LNG Terminals (bcf/d)

Shell/KOGAS/CNPC 2 Kitimat LNG 1.4 Progress/PETRONAS 1 BC LNG Co-op .125

Price Case for LNG ($/mmBtu January average)

JAPAN

AECO

18 15 12 9 6 3 2012

2011

2010

2009

2008

0

Source: National Energy Board

OILSANDS GAS CONSUMPTION Total purchased, processed and produced gas for oilsands production 120

4.3

Process gas for electricity cogeneration Purchased gas for electricity cogeneration Purchased gas for in situ recovery Produced gas for in situ recovery Process gas for mining and upgrading Purchased gas for mining and upgrading

100

2.8

60

2.1

40

1.4

20

0.7

2020

2018

2016

2014

2012

2010

2008

2006

2004

0 2002

0 2000

Gas use (106 m3/d)

80

3.6

Gas use (bcf/d)

Slowing gas-drilling activity and rising natural gas demand would begin to reduce the oversupply conditions, and growth in Canadian natural gas demand would account for a greater proportion of the country’s available deliverability, reducing the net volumes available for export.

Between 2012 and 2014, in the mid-range case, total Canadian demand would increase by 600 million cubic feet per day to 9.8 billion cubic feet per day, from 9.2 billion cubic feet per day in 2012. Forecast demand in 2013 is 9.4 billion cubic feet per day. In 2011, Canadian gas demand was 8.9 billion cubic feet per day.

According to the study, the growth in demand between 2012 and 2014 would be led by western Canada, where demand would rise by 400 million cubic feet per day to 5.8 billion cubic feet per day, from 5.4 billion cubic feet a day, due mainly to Alberta oilsands requirements. Eastern Canadian demand will grow more slowly to four billion cubic feet per day from 3.8 billion cubic feet per day, an increase of 200 million cubic feet per day.

In the lower-price case scenario, the NEB forecasts gas prices increasing to US$3 per million British thermal units at Henry Hub from $2.50 in 2012 and $2.75 per million British thermal units in 2013.

Canadian prices are projected to rise to C$2.15 per gigajoule at AECO in 2014 from $1.86 this year and $1.98 per gigajoule in 2013. This case is based upon persistent oversupply with new drilling mainly targeting liquids-rich natural gas. Deliverability would decline steadily to 12 billion cubic feet per day in 2014 from 14.1 billion cubic feet per day in 2012 and 13.1 billion cubic feet per day in 2013.

In the NEB’s higher case, current oversupply conditions would end by 2014, pushing up gas prices to US$6 per million British thermal units (C$5.22 per gigajoule at AECO), resulting in dry gas once again becoming economic. As increased drilling would only begin to have an effect later in the projection period, deliverability would continue to decline, but to a lesser extent (13.6 billion cubic feet per day in 2014 from 14.6 billion cubic feet per day in 2012).

Natural gas producers are dealing with low prices by targeting liquids-rich plays, reducing drilling, shutting in production, and finding partners to help foot the bill in proving up massive shale and tight gas resources for a future when prices improve.

Encana Corporation is a prime example of this trend. In its first-quarter report in late April, the company reported its new

Source: National Energy Board 26

june 2012

Feature

Coalbed Methane Horseshoe Canyon

Mannville

Original

Original

gas in place

gas in place

36–47 trillion cubic feet

Estimated

recoverable gas

10–12 trillion cubic feet

Horseshoe Canyon Production Forecast (MMcf/d) LOW PRICE HORSESHOE CANYON 700 600 500 400 300 200 100 0

598 598

2011

HIGH PRICE HORSESHOE CANYON

548 550

2012

494 498

2013

446 452

2014

240–278 trillion cubic feet

30–60 trillion cubic feet

Mannville Production Forecast (MMcf/d) LOW PRICE MANNVILLE 700 600 500 400 300 200 100 0

HIGH PRICE MANNVILLE

104 104

101 101

2011

2012

Source: National Energy Board

Corporation for coalbed methane development in Alberta worth $600 million.

“We continue to seek and develop partnership opportunities for the exploration and development of oil and liquids-rich assets throughout our land base, and for dry natural gas plays that could be linked to liquefied natural gas [LNG] projects,” president and chief executive officer Randy Eresman says.

Encana is also targeting capacity reductions totalling approximately 600 million cubic feet per day gross before royalties compared to 2011. Half of this reduction is attributable to declining production through a reduced-capital program and the other half is attributable to physical shut-ins or otherwise curtailed volumes. There is a current weakness in market fundamentals due to an oversupply of natural gas, and it is clear that a continued reduction of drilling activity will be required to restore market balance, says the company.

Estimated

recoverable gas

Eresman says despite the current weakness in North American natural gas market fundamentals, recent industry developments and announcements related to the increased use of natural gas and potential future LNG export projects could help change the direction of natural gas prices.

Over the past five to six months, lower natural gas prices have resulted in seven billion cubic feet per day of fuel switching from coal to natural gas for electrical generation in North America.

Encana and its partners continue to advance negotiations related to the planned Kitimat, B.C., LNG export terminal with potential off-take customers, and are expecting to reach a final investment decision by year-end.

“We continue to see cause for optimism for higher natural gas prices in the approval of natural gas exports and export facilities, coal

92

92

2013

85

85

2014

Source: National Energy Board

plant retirements, increased industrial demand for ethane and other NGLs [natural gas liquids], and gas-to-liquids projects,” Eresman says.

Tight gas producer Progress Energy Resources Corp. announced in February that it was cutting back its efforts to develop its massive Montney assets in response to low gas prices.

It cut back its 2012 capital program by $100 million to $365 million. Progress also shut in approximately 10 per cent of total natural gas production in April.

“The decision to slow down capital expenditures and shut in production was prompted by the abnormally warm winter in North America and the resulting supply-anddemand imbalance,” says Progress president and chief executive officer Michael Culbert.

“We believe the current low natural gas price is unsustainable given the full-cycle costs of P R O F I L E R M A G A Z I NE . C O M

27

Feature

Liquids-rich gas with access to deep-cut fractionation facilities is driving gas drilling in western Canada.

the natural gas business. We take a long-term approach to value creation and believe that shifting capital to preserve asset value and maintain our balance-sheet strength is prudent in this environment.”

Progress’s 2011 exit production was approximately 50,000 barrels of oil equivalent per day, with fourth-quarter 2011 production averaging 45,736 barrels of oil equivalent per day. The company says it will take steps to

production base, we believe that earning a return on that capital is equally as important to shareholders. The shut-in properties were prioritized based on high-variable operating costs, higher decline and wells in which there were no competitive drainage issues or material shutdown/start-up costs.”

One company that remains optimistic despite low prices is Peyto Exploration & Development Corp. During its 2011 year-end

“ O n a typical Cardium horizontal well in Sundance, for instance, if we have the deep -cut liquids-removal capacity in place and we can get a 10 per cent reduction in our service costs because of inactivity in the industry, then we still generate something like 30 per cent returns at $1 gas prices.”

— Scott Robinson, chief operating officer and executive vice-president, Peyto Exploration & Development Corp. delay completions of new wells and to shut in approximately 10 per cent of total natural gas production due to the low gas-price outlook.

“Similar to our plan to reduce capital, we believe that shutting in production in the current low gas-price environment and bringing it back on stream later in the year is prudent,” says Culbert. “Although we have positive cash flow in the current low gas-price environment, given the low-cost nature of our

Marketable Gas - Tight Gas Plays (tcf)

Marketable Gas - Tight Gas Production Forecast (MMcf/d) 2,500

Source: National Energy Board june 2012

Peace River

B.C. Foothills

Kaybob

West-central AB

AB/BC Montney (includes shale)

Alberta Deep Basin

BC Deep Basin

0 Alberta Deep Basin

0 Alberta Montney

500

B.C. Montney

100

B.C. Doig

1,000

Jean Marie

200

B.C. Halfway/ Doig

1,500

B.C. Deep Basin

300

2011 2012 2013 2014

2,000

Source: National Energy Board

Photo: JOEY PODLUBNY

ORIGINAL GAS IN PLACE HIGH CASE LOW CASE

400

Northeast BC

500

28

conference call, the Deep Basin producer said that despite prices below $2 per gigajoule, it would continue to drill for natural gas.

In fact, the company recently completed an exercise to test how much of its production would make the grade at a hypothetical AECO price of $1 a gigajoule. It found that more than 99 per cent of its production would still be profitable, said Scott Robinson, chief operating officer and executive vice-president.

Feature

MAJOR CANADIAN SHALE DEPOSITS Play Horn River Cordova Embayment Liard Basin Montney (Deep Basin) Colorado Group St. Lawrence (Utica) Horton Bluff Frederick Brook

TOTAL

Recoverable Reserves (tcf)

Reserves In Place (tcf)

132 29 31 69 61 31 2 N/A 355

378 83 125 222 408 155 9 N/A 1,380

Province B.C., NWT B.C., NWT B.C., NWT B.C., AB AB, SK QC NS NB

Source: National Energy Board

Horn River Production Forecast (MMcf/d)

NEB medium price scenario

600 400 200 0

2011

2012

2013

2014 Source: National Energy Board

“And at the current pricing of about $1.60–$1.70, essentially all of our production is fine—it’s generating a profit,” Robinson told analysts in a conference call.

NGLs boost Peyto’s equivalent gas price.

Robinson said the liquids content is 40–60 barrels per million cubic feet of gas from Peyto’s Cardium wells and 13–18 barrels per million cubic feet in the Notikewin and the Falher formations.

“Our driest wells would still make over $1.50 per thousand cubic feet if sales gas is at $1 per gigajoule,” Robinson said.

“On a typical Cardium horizontal well in Sundance, for instance, if we have the deep-cut liquids-removal capacity in place and we can get a 10 per cent reduction in our service costs because of inactivity in the industry, then we still generate something like 30 per cent returns at $1 gas prices,” he said.

During the conference call, president and chief executive officer Darren Gee said Peyto

is still drilling for gas because its costs are low enough that it is still making money.

“Today we’re bucking the trend…because the returns for us are still very strong,” Gee said, citing Peyto’s low-cost structure.

He suggested the company’s costs are probably about $10-per-barrel-of-oil-­equivalent lower than the industry average.

“Ten dollars a barrel on $50 a barrel of revenue is 20 per cent. That’s the return that most guys are looking for. So when they’re breaking even, we’re making 20 per cent which is…where we are today,” Gee said.

The conference call was told Peyto’s assumption of profitability at a hypothetical AECO gas price of $1 a gigajoule assumes a West Texas Intermediate oil price of around US$100 a barrel. However, Peyto said all NGL prices might not follow with oil prices.

Due to its demand as a diluent for Alberta bitumen, condensate maintained its price recently when oil prices weakened slightly, the call heard.

However, Peyto is vowing to remain focused on cost control amid low gas prices.

“If AECO daily natural gas prices drop below $1 [per gigajoule], Peyto will shut in any production that is processed by third parties and has higher per-unit costs,” the company said in releasing its year-end results.

The company doesn’t plan to operate through spring breakup this year as it did in 2011.

“In the present natural gas price environment, there is no incentive to incur the potential cost premiums that can arise during the unpredictable weather conditions of spring breakup. Consequently, Peyto envisions a period of drilling and completion inactivity from mid-April until the beginning of June,” the company said.

The timing of Peyto’s 2012 capital program of $400 million to $450 million has been weighted to the later months of 2012 to take advantage of an expected reduction in gas drilling and, therefore, reduced service costs.

“Both natural gas prices and service costs will be monitored carefully and this level of capital investment will only be pursued if Peyto’s traditional return objectives can be met,” the company said. With the current disparity between gas and liquids prices, the company plans to focus on its inventory of liquids-rich opportunities, as well as profitable, low-risk facility-enhancement projects. The timing of those projects will be accelerated as much as possible.

So far in 2012, six rigs have been active across Peyto’s core areas, as well as exploring in a few new areas of the Deep Basin. A total of 13 (13 net) wells have rig released to date, all of them horizontal wells, including six wells spudded in late 2011. Four of these were drilled in Peyto’s northern Cardium areas.

The company has brought on production 11 (10.3 net) new wells since the beginning of the year. In addition, three (three net) wells with restricted production potential of 2,000 barrels of oil equivalent a day were completed and await tie-in in new exploration areas.

Tie-in timing in these new areas is slower than Peyto’s main core areas as they are not near company facilities. Peyto is using the current low gas-price environment as an opportune time to explore and expand in these new areas.

Peyto’s Oldman gas-plant enhanced­liquids extraction project is progressing on schedule with major equipment fabrication 25 per cent completed. Installation and start up is anticipated for the beginning of the fourth quarter.

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

29

Rosy forecasts for oilsands production are one thing.

Making them happen is another thing entirely.

By Darrell Stonehouse With notes from the Daily Oil Bulletin staff

How much, how fast 30

june 2012

Feature

ESTABLISHED esource bitumen r

Original

bitumen in plac e

1,804

177 billion barrels

billion barrels

Photo: Joey Podlubny

A

lberta’s oilsands are all about big numbers: There are around $1.8 trillion barrels of bitumen in place.

Of that resource, around 171 billion barrels are technically recoverable reserves. Around 1.6 million barrels per day of those reserves were produced in 2011.

Then come the forecasts. Oilsands developers will spend $20 billion this year moving projects forward. Production is predicted to more than double to 3.5 million barrels per day by 2020.

But behind the numbers lies an industry challenged on a lot of fronts. Technological innovation is needed to keep driving down costs.

Environmental innovation is needed to reduce ecological costs. And shortages of skilled workers put all the best-laid plans in jeopardy.

The oilsands story is really two separate stories: mining and in situ production. In 2010, Alberta’s production of crude bitumen reached over 1.6 million barrels per day, with surface mining accounting for 53 per cent of production and in situ for 47 per cent. But mining is now a mature business and in situ production is expected to outpace mining by 2016. The reason is around 80 per cent of the oilsands resource is too deep to mine.

Mining Oilsands mining continues drawing the majority of investment dollars in 2012, with ongoing work projects at existing mines,

construction finishing off at Imperial Oil Limited’s Kearl mine and preliminary work underway on expansion projects and new mines.

Internal estimates put Syncrude Canada Ltd. spending at about $3.5 billion as the consortium works through a debottlenecking project aimed at driving up production by 10 per cent. Canadian Natural Resources Limited is spending $2 billion expanding its Horizon oilsands mine. Another $1 billion is expected to be spent at the Athabasca Oil Sands Project, according to estimates from JuneWarrenNickle’s Energy Group. Suncor planned to invest nearly $1.8 billion at existing oilsands mining operations, with an undisclosed figure being spent to develop new mining operations.

Spending on new mining production is also substantial in 2012, with Imperial Oil’s Kearl project in the final legs of construction.

According to the Canadian Association of Petroleum Producers (CAPP), Imperial is expected to spend around $3 billion at Kearl in 2012, leading up to start up by year-end. CAPP also predicts Total E&P Canada Ltd. will spend around $1 billion this year moving its Joslyn mining project forward.

Mining operators are keeping their pencils sharp as they move projects forward, hoping to avoid the cost inflation that plagued the industry during the last boom. At a recent BMO Capital Markets unconventional resource conference, Canadian Natural Resources vice-president of investor relations Corey Bieber said the global P R O F I L E R M A G A Z I NE . C O M

31

Feature

Oilsands bitumen export & production forecast

Oilsands established reserves under active development 2008

2009

2010

(,000s barrels per day)

In situ PRODUCTION

EXPORT

In situ Mining

Synthetic crude Raw bitumen

3.5

3.3

3

23.5

23.2

22.9

Mineable

4,000 3,458

3,000

2,466 2,183

2,000

1,667

1,058 2,026

1,056

972 1,517

1,982

1,287

Total 787

734

704

1,000

1,917

2,845

1,541 1,054

0

1,127

813

2012

933

1,787

1,179 1,141

2013

2015

2020

One billion barrels

25 27

26.5

Source: Alberta Energy Resources Conservation Board

financial meltdown has provided a window of opportunity for oilsands operators to build projects in a less-heated environment. The crisis has resulted in a number of large-scale projects being delayed around the world, freeing up engineering and fabrication workers.

“A number of things have happened on the world stage that have created some opportunities for us,” Bieber said.

Canadian Natural has signed lump-sum contracts for three significant projects worth more than $500 million, as well as some smaller ones.

“Basically what we’re doing on the mining side is taking what the market will give us, capturing those prospects where we can and actually containing our cost inflation,” said Bieber.

Canadian Natural is spending $2 billion this year debottlenecking its upgrader, increasing coker capacity and adding 10,000 barrels per day of mining capacity.

Bieber said the company expects some trades to be in short supply beginning next year and is already developing a strategy to deal with the issue.

Containing costs is only one challenge facing miners. Worries over land disturbance and air and water quality also continue making headlines. But a number of initiatives are underway to answer these concerns.

In February, the Alberta and federal governments announced plans to implement a major upgrade of environmental monitoring systems in the oilsands, a long-standing complaint from environmental groups.

The Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring will provide for increased air, water, land and biodiversity monitoring beginning this year. The goal is to sample more sites for more substances more frequently. The program is designed to provide an improved understanding of the long-term cumulative effects of oilsands development.

Data from the new monitoring program—and the methods on which it is based—will be transparent, supported by necessary quality assurance, and will be made publicly available to allow 32

june 2012

independent scientific assessments and evaluations, according to Alberta Environment and Sustainable Resource Development. This will encourage informed discussions and analysis on the impacts of oilsands development based on high-quality scientific information.

CAPP says it welcomes the new three-year monitoring program for the oilsands that will be jointly managed by the federal and Alberta governments.

“A world-class environmental monitoring system will contribute to improved performance reporting, regional planning and industry

CUMULATIVE roduction

bitumen p

7.5 billion barrels

Feature

Jean-Michel Gires, president and chief executive officer of Total E&P Canada, says COSIA creates a new dynamic for the oilsands industry, promoting new approaches for intellectual property management of environmental technology and better working relationships with universities, research agencies, technology providers, regulators and oilsands stakeholders in the communities where industry operates.

“COSIA is a reflection of how the oilsands have evolved into a global resource, with companies committing to foster continuous innovation and the development of new environmental solutions,” Gires says. “We have seen what can be achieved when we work together and multiply our ideas and efforts. For example, work done by the Oil Sands Leadership Initiative and the Oil Sands Tailings Consortium are already delivering technology that promises to reduce our environmental footprint. We want to build on these previous successes across COSIA’s environmental priority areas and accelerate the improvement of our environmental performance.”

In situ The in situ oilsands sector has had its share of ups and downs in recent years as a number of projects have failed to live up to expectations. But for those companies that have unlocked economic means of tapping into the massive in situ resource, it’s full steam ahead.

Cenovus Energy Inc. has been on a steady upswing, with rapid expansion plans in the works. Production was up 23 per cent in the first quarter of 2012 as the result of the rapid start-up of its Christina Lake Phase C expansion. Christina Lake production reached nearly 25,000 barrels per day, with an enviable steam to oil (SOK) ratio of 2:1. Combined with its Foster Creek development, Cenovus had net production of 82,000 barrels per day in the quarter, with total production from the two projects reaching 164,000 barrels per day.

In situ bitumen production

(,000s barrels per day)

0

2009

400

317

300

213

207

173

200

222

CSS SAGD

2010

244

Primary

2008

194

By type

343

371 40

45

100

40

200

241

Cold Lake

232

Athabasca

317

300

301

Peace River

400

310

By area

186

performance improvement as the oilsands industry continues to grow,” said CAPP president David Collyer.

Although details haven’t been worked out, both governments said they will take immediate steps to start implementing the activities outlined for year one of the program, and make the fullest possible use of the upcoming field season for monitoring. Monitoring in the oilsands is to be managed “in an adaptive manner,” with plans and activities evolving to reflect experience gained from initial work. Details in years two and three will be finalized, refined and adjusted based on this approach.

By the time the three-year plan is fully implemented in 2015, the number of sampling sites will increase and include a larger area; the number and types of parameters being sampled will rise; samples will be taken more often; monitoring methodologies for both air and water will improve; and an integrated, open data-management program will be created. Data from the monitoring program, and the methodology used to produce it, will be made public on a continuous basis.

Jennifer Grant, director of the Pembina Institute’s oilsands program, said from her group’s perspective the new monitoring program shows promise.

“The need to improve monitoring of the environmental impacts of oilsands production has been widely recognized, and it’s promising to see that this plan commits to transparency and accessibility and is based on technically sound information,” Grant commented. “It’s very positive that more pollutants will be tracked, and that the area monitored is being expanded to include downstream and downwind regions, but better monitoring is only one piece of the puzzle.”

Still, Grant believes that the monitoring program is only one step in developing a comprehensive environmental and public safety program for the oilsands.

“The government’s regulatory capacity and commitment to actually manage environmental impacts continues to lag behind the pace and scale of new oilsands development, and new projects continue to be approved even though we don’t have enough information to understand the impacts. That is not responsible management,” she said.

“For example, the federal government has witnessed the steady decline of woodland caribou herds in the oilsands region for years, but has failed to take the necessary actions to protect the species as the population declines and risks being eliminated from the oilsands region.”

In early March, oilsands producers further ramped up their efforts to combat environmental and public safety concerns by announcing a new alliance—Canada’s Oil Sands Innovation Alliance (COSIA)— focused on accelerating the pace of improving environmental performance.

Chief executive officers of 12 companies have signed the alliance’s founding charter, committing to COSIA’s vision to “enable responsible and sustainable growth of Canada’s oilsands while delivering accelerated improvement in environmental performance through collaborative action and innovation.”

The creation of COSIA as an independent alliance builds on work done over the past several years by both oilsands industry members and research and development organizations, the alliance said. COSIA will take these efforts to a much larger scale and will help the industry address environmental challenges by breaking down barriers in the areas of funding, intellectual property enforcement and human resources that may otherwise impede progress on environmental performance. COSIA said its collaborative approach will accelerate the discovery and development of environmental technologies and reduce the time from idea to implementation.

100

0

2008

2009

2010

Source: Alberta Energy Resources Conservation Board

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

33

Feature

Construction at Christina Lake Phase D, which will add another 40,000 barrels per day, is more than 75 per cent complete, and the project is on track for first production in the fourth quarter of this year.

Phase E is more than 40 per cent complete and first production is expected in the fourth quarter of 2013. Christina Lake has also received regulatory approval for Phases E, F and G that are expected to increase production capacity to 218,000 gross barrels per day when complete.

Cenovus has projects with total expected gross production of 400,000 barrels per day moving through the regulatory process. The company has identified 10 emerging projects and continues to assess its resources to prioritize development plans and support regulatory applications.

The regulatory application for the 130,000-barrel-per-day (gross) Narrows Lake project, jointly owned with ConocoPhillips Canada, is being reviewed by the regulators and Cenovus anticipates receiving approvals in the second quarter. The application includes the option of using a combination of steam assisted gravity drainage (SAGD) and solvent-aided process. Provided approvals are received as anticipated, construction is expected to start later this year with initial production expected in 2016.

The joint regulatory application and environmental impact assessment for a commercial SAGD project at Grand Rapids in the Greater Pelican Region is also being reviewed by the regulators. The company

drilled a second well pair in the first quarter of 2012 as part of the pilot project in the area, which began in 2010.

First production from the commercial project is anticipated in 2017, if approvals are received as expected. The company believes that Grand Rapids has the potential to reach production capacity of 180,000 barrels per day.

The revised joint regulatory application and environmental impact assessment for the Telephone Lake project in the Borealis Region is also being reviewed by the regulators. The application updates the expected production capacity to 90,000 barrels per day from the original 35,000-barrel-per-day application that was filed in 2007.

The company is continuing its search for a strategic transaction to support development of the project.

Despite wider-than-normal light-heavy crude oil price differentials, low operating costs and an increase in production helped MEG Energy Corp. deliver strong first-quarter results.

“We saw an exceptional quarter in the first quarter, including our second-best quarterly production rate, our lowest net operating costs and our third-highest operating netbacks realized to date,” president and chief executive officer Bill McCaffrey said.

He added that the company is better situated than many of its peers to handle the increase in the light-heavy spread.

“The overarching question over the past quarter was how a pure-play in situ oilsands company like MEG would perform in the

Oilsands project production outlook to 2020 (,000s barrels per day)

2011

2012 150

Athabasca Oil Sands Project CNRL Kirby Christina Lake Cold Lake Fort Hills Foster Creek Great Divide Hangingstone Horizon Jackfish Joslyn Kai Kos Dehseh Kearl Long Lake MEG Christina Lake MacKay River Orion Peace River Primary CNRL Cold Flow Primary CNRL Pelican Lake Cenovus Pelican Lake Penn West Seal Shell Seal Primrose Wolf Lake Suncor Mining Suncor SAGD Sunrise Surmont Syncrude Tucker

june 2012

450

150

300

450

235 0

0

33

20

150

150 0

0

118

105 18

16 8

8 103

60 45

38 0

0 8 0

14 27 33 25 30 10 10 24 46 25 8 16

42 25 30 6 9 25 45 22 6 14

120

101

266

255 131

79 0

0

27

25

305

289 8

TOTAL: 1,567

Source: Citigroup 34

300 190

12

TOTAL: 1,839

Feature

Synthetic crude oil production forecast (,000s barrels per day) 1,500

1,000

1,405

1,039

1,125

1,071

500

0

2012

2013

2015

2020

Source: Canadian Association of Petroleum Producers

recent environment of wider light-heavy crude oil differentials,” McCaffrey said. “In fact, by remaining among the industry’s lowestcost operators, we were able to achieve our third-strongest quarter on record.”

MEG’s production in the first quarter of 2012 averaged 28,446 barrels per day, with a related SOR of 2:5.

McCaffrey said initial results from MEG’s first two infill wells and a pilot project using non-condensable gas injection in three well pairs at Christina Lake Phase 1 are promising.

“We demonstrated a combined SOR of about 1:8 during the first quarter, with March averaging a SOR of just over 1:3,” he said. “While it’s very early, it’s obviously very, very exciting for us. If this performance is sustained, it would have a major impact on the productivity and energy efficiencies of the entire field.”

By reducing SORs in producing wells, McCaffrey said that freed-up steam can be redirected to new, pre-drilled wells, supporting a further increase in production.

“Building on our current performance, the introduction of infill wells and non-condensable gas injection further increases the efficiency of our operations while allowing us to leverage additional production through our existing facilities,” said McCaffrey. “In addition to higher production, this enables us to spread fixed costs over higher volumes, reducing our per-barrel operating costs.”

Capital investment was $364.9 million during the first quarter of 2012 in comparison to $210.5 million for the same period in 2011.

Spending in the first quarter of 2012 was focused on the construction of Christina Lake Phase 2B, the winter core hole drilling and seismic programs, and the Access pipeline.

Approximately $174 million was invested on detailed engineering, major equipment and material, and construction activities for MEG’s

2015

2020 150

Athabasca Oil Sands Project CNRL Kirby Christina Lake Cold Lake Fort Hills Foster Creek Great Divide Hangingstone Horizon Jackfish Joslyn Kai Kos Dehseh Kearl Long Lake MEG Christina Lake MacKay River Orion Peace River Primary CNRL Cold Flow Primary CNRL Pelican Lake Cenovus Pelican Lake Penn West Seal Shell Seal Primrose Wolf Lake Suncor Mining Suncor SAGD Sunrise Surmont Syncrude Tucker

300

450

150

300

450 370

285 40

16

218

98 157 160

155 0

210

132 20

20 22

40 279

143 105 100

73 0 80

24

265

130 78 60 70

48 60 30 18 12 21

20 12 16 52

80 33

40 11 8

16 14

120

120

278

278 229

229 106 110

10 33

405

405 22

TOTAL: 2,534

22

TOTAL: 3,674 P R O F I L E R M A G A Z I NE . C O M

35

Feature

ally i t n e t o p Ultimate LE

B A R OVE REC bitumen

5 1 3 ls e r r a b n o billi

Christina Lake Phase 2B project. As of March 31, detailed engineering was 96 per cent complete and all materials and modules had been ordered, with delivery and on-site construction scheduled to continue through 2012 and into 2013.

McCaffrey noted that the $1.4-billion, 35,000-barrel-per-day design capacity project remains on budget and on schedule for start up in 2013.

“When completed and fully ramped up, Phase 2B will increase MEG’s production capacity by 140 per cent,” he said.

Phase 2B will be followed by the multistage Christina Lake Phase 3 project, which received regulatory approval in the first quarter of 2012.

Engineering work on the 150,000-barrel-per-day project is underway to determine the optimum size and schedule of the planned project phases. Also in the first quarter, MEG began stakeholder consultation for its multistage 120,000-barrel-per-day Surmont project, located north of the company’s Christina Lake assets on the same geological trend. MEG expects to submit a regulatory application for Surmont in the second half of 2012.

Imperial Oil is the oldest in situ oilsands producer and continues successfully exploiting its Cold Lake resource base.

Imperial is looking at in situ development in the Grand Rapids formation, which lies above the Clearwater zone that currently produces bitumen using cyclic steam stimulation technology. The company has improved its understanding of the resource over the past few years as the result of 3-D seismic acquisition and a recent geological study. In addition, Imperial has benefited from the experience of at least one other company that has been producing from the Grand Rapids for at least seven years.

Preliminary work has identified the potential for multiple phases of 35,000 barrels per day of bitumen production. The exact number of phases is still being decided. Imperial’s outlook for first production is early in the next decade. The company would require regulatory approval to produce from the Grand Rapids. It looks like the best technology to apply to the Grand Rapids is SAGD or possibly solventassisted SAGD (SA-SAGD), which is currently being piloted at Cold Lake. SA-SAGD, one of the two new in situ technologies that Imperial is pursuing, can eliminate the need for water and steam during in situ 36

june 2012

“ T he overarching question over the past quarter was how a pure-play in situ oilsands company like MEG would perform in the recent environment of wider light-heavy crude oil differentials.”

— Bill McCaffrey, president and chief executive officer, MEG Energy Corp.

operations, said Bruce March, Imperial’s president, chief executive officer and chairman. Research has shown that mixing a low concentration of solvent with steam can enhance bitumen recovery in situ and reduce greenhouse gas intensity. Imperial has been piloting the technology since 2010.

The second new technology, cyclic solvent process (CSP), takes SA-SAGD a step further by testing only the use of a hydrocarbon solvent. “If successful, both water use and greenhouse gas emissions could be eliminated when it is applied to in situ operations,” March said. Imperial conducted a successful field trial of CSP between 2009 and 2011, and a pilot consisting of three horizontal wells was sanctioned late last year with an expected start-up in late 2013.

Nexen Inc., meanwhile, continues working to bring its integrated Long Lake project up to expected performance of 72,000 barrels per day.

Nexen achieved a 10 per cent rise in production at Long Lake from last year’s levels, up to 34,500 barrels daily in the first quarter, up ­ 20 per cent from its low point last year.

Interim president Kevin Reinhart said despite the problems Nexen has had at Long Lake, it remains committed to the project because it contains at least 35 years of production at the design capacity “and it has 50 years of probable reserves.”

The company’s focus is on “filling the upgrader,” which has the ability to process about 70,000 barrels per day of bitumen.

In an interview with the Daily Oil Bulletin, Reinhart said the company expects to exit this year at Long Lake with as much as 40,000 barrels per day of production. It has begun steaming Pad 12 on the lease and has approval to go ahead with Pads 14 and 15 as well as with the development of the adjacent Kinosis 1A area, all considered highquality reservoirs.

Nexen earlier indicated it expects production of 11,000–17,000 barrels per day from Pads 12 and 13, and another 4,000–7,000 barrels per day from Pads 14 and 15. It has said it believes it can reach production of 15,000–25,000 barrels per day from Kinosis 1A. Reinhart said that Nexen believes Long Lake can eventually contribute $855 million per year to cash flow, “and this is why we continue to pursue the resource.”

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Feature

Measuring success

By Darrell Stonehouse With notes from the Daily Oil Bulletin staff

Service companies enjoy rapid growth in 2011, more cautious in 2012 38

june 2012

Feature

WELLS DRILLED 2008

METRES DRILLED

(in western Canada) 2009

2010

2011

2012

(in western Canada)

2008

0

2,000

21,428,000 4,000

2009

6,000

12,518,000 8,418

8,000

2010

12,000

12,100

14,000

18,022,000 12,829

13,150

2011

16,000

18,000

16,943

22,183,000 Source: Canadian Association of Petroleum Producers

Photo: Joey Podlubny

2

011 was a very good year for Canadian service and supply companies. While the number of wells drilled totalled only 12,800—a far cry from the over 20,000 wells drilled in 2007—the complexity of the new extended-reach horizontal wells increasingly used by operators meant major increases in revenues and profits for drillers. And with larger and more complicated multistage fracture stimulations and completions becoming the norm, the well servicing industry also saw major growth.

The Petroleum Services Association of Canada (PSAC) expects a slight increase in Canadian drilling activity levels for this year, but lower than previously forecast, it announced in its second-quarter update.

The revised forecast for 2012 predicts a total of 13,150 wells will be drilled across Canada, representing a two per cent increase in total wells drilled over 2011.

The 2012 revised forecast represents a slight reduction of 200 wells from PSAC’s January update that pegged activity for the year at 13,350 wells. The association attributes the decrease largely to the

decline in natural gas drilling due to record-low natural gas prices.

The overall forecast well reduction since November is based on declining gas prices, labour shortages, warm weather at the outset of the year and world economic conditions, including the European debt crisis. PSAC is basing its updated 2012 forecast on average natural gas prices of $1.90 per thousand cubic feet at AECO and a West Texas Intermediate crude oil price of US$100 per barrel.

“There have been some conditions that have impacted expected drilling activity that were beyond our industry’s control,” Mark Salkeld, PSAC’s president, says. “That said, productivity so far this year is high and activity is still on the uptick.”

The days of 20,000-plus wells are likely not to return any time soon, due largely to the fact that operators are drilling longer and more complex wells that are accessing plays once thought unreachable or fully tapped, he adds. The first quarter of 2012 saw the average well depth reach beyond 2,000 metres, and that is a sure sign that the

industry now operates very differently than only five years ago, when vertical wells were still the prominent well type and technology, according to Salkeld.

PSAC is forecasting that horizontal wells will account for more than half of all well types this year, a marked increase from the horizontal well count of 2007, which levelled out at only 13 per cent of total wells.

Yet, despite the positive forecast, there is some caution in the industry as the transition from drilling shale gas wells to drilling oil and liquids-rich tight plays advances and the supply of state-of-the-art drilling and fracture stimulation technologies catches up with demand.

Drilling services Canada’s largest drilling services provider, Precision Drilling Corporation, enjoyed net earnings of $193 million in 2011, up almost fivefold from the $44 million it earned the previous year. Revenue climbed to $1.95 billion from $1.43 billion the previous year.

Precision credited its success in 2011 on improved day rates and operating margins,

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

39

Feature

HORIZONTAL WELLS DRILLED 0

1,000

(in western Canada)

2,000

3,000

4,000

5,000

6,000

7,000

8,000

3,101

2008

2,440

2009

4,950

2010

7,049

2011

Source: JuneWarren-Nickle’s Energy Group Data Central

along with higher activity levels across North America. Drilling rig utilization days increased 22 per cent in Canada and 17 per cent in the United States compared to 2010. Compared to the final quarter of 2010, Canadian drilling day rates and margins increased by $2,822 and $2,183 per utilization day, and U.S. drilling day rates and margins increased by $3,586 and $2,715.

In reporting its first-quarter 2012 results, Precision’s president and chief executive officer Kevin Neveu said the strong results continue. Neveu said the key to the com­ pany’s success has been its ability to follow operators as they have moved away from drilling shale gas plays to oil and liquids.

“Despite a significant decline in dry gas drilling activity, drilling rigs performing horizontal drilling for oil and gas liquids, and the related services provided by Precision, remain in demand,” he explained.

Neveu said state-of-the-art rigs capable of drilling the long horizontal wells needed for tight gas and liquids development are in tight supply.

“For much of the quarter, Precision had near full utilization for our Tier 1 and Tier 2 assets in Canada. This utilization was reached despite an overall depressed gas drilling market and the virtual absence of the shallow gas drilling market. The high activity levels are representative of continued demand for drilling services to develop unconventional oil and liquids targets,” he explained. “For Canada, the unseasonably warm weather created a delay in rig start up for the winter drilling season and the annual

40

june 2012

spring breakup arrived earlier than last year.

These factors combined to lower average utilization rates for the quarter, but we are encouraged by the activity levels we achieved, our conversations with customers about post-breakup plans and the visibility we have for the second half of the year.

“In the U.S. market we continue to experience strong demand for Precision’s Super Series rigs. We are in discussions with several customers for new-build rigs to meet drilling challenges in unconventional oil–focused drilling plays such as West Texas Permian, the Mississippian Lime, the Bakken and the Niobrara,” he added. “The industry is experiencing regional activity and pricing softness in gas‐driven markets. The decrease in gas-directed activity has been steep and swift, with the U.S. gas-directed land rig count declining approximately 35 per cent or 315 rigs since October 2011. As a result of Precision’s rig redeployments over the past 16 months and new-build and upgrade rig deliveries, we have established stronger positions in the Bakken, Eagle Ford and horizontal Permian markets, as well as some of the emerging oil and gas liquids plays. Across North America, approximately 75 per cent of Precision’s rigs working during the first quarter were drilling for oil targets and over 80 per cent were drilling horizontal or directional wells.”

Trinidad Drilling Ltd. also saw its income climb in 2011 as a result of the demand for rigs capable of drilling more complex wells. It is also transitioning from drilling dry gas plays into liquids-rich areas.

“We achieved the goals we set for the year by expanding into several new operating areas, growing our modern, technically advanced fleet while maintaining a focus on cost control and also lowering our overall leverage,” says Lyle Whitmarsh, Trinidad’s chief executive officer. “In addition, we have demonstrated the flexibility of our equipment and the ongoing commitment of our customers by redeploying a significant portion of our fleet towards oil and natural gas liquids [NGL]–rich plays during the year.”

Trinidad believes 2012 will be a continuation of 2011. Despite the ongoing weakness in natural gas prices, drilling industry fundamentals have remained strong to date in 2012, the company says in its year-end outlook. Trinidad, and the industry as a whole, has demonstrated an ability to switch its focus away from dry natural gas development towards oil and NGL-rich plays. This migration has been happening for the past 12–18 months, but has accelerated and gained more exposure in the past few months as natural gas prices dipped. To date, high oil prices and the resulting strong economics in these oil and NGL-rich plays have led to demand levels that have absorbed any available high-­ performance equipment.

The fundamentals behind oil prices are significantly stronger than natural gas, and most industry experts are forecasting crude oil prices at or above current levels for the next few years, says the company. These commodity price levels allow oil and gas companies to develop resources at acceptable levels of return, and Trinidad expects

Feature

Photo: Joey Podlubny

these factors will continue to drive healthy activity levels in 2012. Trinidad expects that modern, high-performance equipment will continue to be the equipment of choice by operators, and that demand and pricing will remain strong in this sector of the market.

Pressure pumpers For Canadian-based pressure pumping players, 2011 was one for the record books as the length and complexity of wells grew and the tight oil revolution gained speed across North America.

Calfrac Well Services Ltd. reported record annual revenue of $1.5 billion versus $935.9 million in 2010, with higher year-over-year activity in all of Calfrac’s operating divisions. Calfrac’s net income grew to $187.5 million from $49 million in 2010.

In Canada, the company says growing demand from development of liquids-rich gas and oil plays built throughout the year.

“With capital programs of exploration and production companies incorporating larger multi-well pad designs, longer horizontal well legs and a greater average number of fractures per wellbore, the vast majority of the company’s activity was concentrated in these unconventional resource plays throughout western Canada,” Calfrac chief executive officer Doug Ramsey reported to shareholders. “Using these approaches, our customers are continuing to focus on realizing further efficiencies as they steadily de-risk and mature these plays. Calfrac will continue to work closely with its customers and introduce new technologies to help improve the economics of the resource plays. The company’s leadership position in fluid technology has provided the basis for further expansion, particularly in oil regions, which have become more reliant on fluid technology improvements to develop these plays.”

In the United States, Calfrac’s success was driven by an expanded presence in the Marcellus and Bakken resource plays, combined with a larger presence in the Niobrara oil shale play in the Rocky Mountain region. In the third quarter, Calfrac added a third fracturing fleet in the Marcellus.

Like with the drillers, the pressure pump companies are also migrating with the industry to liquids plays.

Early in the fourth quarter, the company deployed a third fracturing fleet into the Bakken play of North Dakota. Two of the company’s three fracturing crews operating in North Dakota during the fourth quarter are under long-term minimum-commitment

Drilling rig building was on a rapid pace in 2011, but is slowing in 2012 as natural gas drilling retreats due to low prices.

contracts with one of the region’s largest operators.

“Demand for Calfrac’s services in this region remains extremely high,” Ramsey said.

“Near year-end, the company deployed an additional fracturing fleet into the emerging Niobrara oil shale play in northern Colorado and Wyoming. While the play is in the early stages of development, the company has taken a leadership position through its longstanding presence and established customer base.

“The company continues to proactively manage its commodity and logistical requirements, as the larger volumes associated with the market shift towards unconventional resource development have made this function critical for job-execution success,” Ramsey added. “Calfrac has always devoted a great deal of resources to these requirements and, therefore, remains well positioned to execute its growth plans.

During the fourth quarter, the company also expanded its cementing operations in

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

41

Feature

Wells are being drilled deeper, with longer horizontal legs, which is driving

Pennsylvania and commenced coiled tubing operations in the Bakken play. Calfrac is optimistic about the future expansion opportunities for these services lines in these regions.”

Looking ahead in 2012, Ramsey said given the recent weakness in natural gas prices, Calfrac expects that North American drilling and completion activity in 2012 will focus on the development of oil and liquids-rich natural gas resource plays. During 2011, the adoption of multi-well pads and 24-hour operations increased, and he expects that this trend will become more prominent as its customers strive to improve drilling and completion efficiencies in these plays.

Despite advancements made in recent years, Calfrac believes that completion strategies in oil and liquids-rich reservoirs remain in the early stages of development. With the introduction of improving technologies, it is expected that the economics of these plays

42

june 2012

will continue to improve and result in further commodity diversification and provide greater sustainability of the company’s revenue base.

The largest growth driver in the com­ pany’s Canadian operations has been completion activity in unconventional light oil plays such as the Cardium, Viking and Bakken, as well as emerging plays such as Beaverhill Lake, Alberta Bakken, Dunvegan and Slave Point. As these plays provide producers with very strong returns at current commodity prices, fracturing and coiled tubing activity are expected to increase and provide for further commodity-based diversification in western Canada.

Activity in the liquids-rich natural gas plays of northwestern Alberta and northeastern British Columbia is expected to remain high as producers focus on the types of plays and particular areas within plays offering the highest liquids content. In addition to the more developed regions, emerging areas

such as the Duvernay shale could drive significant demand for Calfrac’s services in 2012 and beyond. The company is actively involved with its customers in the early stage development of these unconventional resource plays and estimates that in excess of 70 per cent of its activities will be focused on oil or liquids-rich natural gas development in 2012.

In the United States, Calfrac’s expanded presence in the Bakken, Marcellus and Niobrara resource plays has created the foundation for significant growth. The company expects demand for its services in the Bakken oil shale play of North Dakota to be robust in 2012. With the addition of its recently deployed third and fourth fracturing crews and the commencement of coiled tubing operations, Calfrac’s activity in this market is expected to grow significantly. Service intensity through longer horizontal legs and a greater number

Photo: Joey Podlubny

up costs per well significantly.

Feature

TRENDS IN MULTISTAGE FRACTURING Play

Number of stages

Horsepower

Horn River

15 to 30

Montney Deep Basin Vertical Deep Basin Horizontal

Frac size (tonnes per stage) 30,000 to 50,000

8 to 16

18,000 to 40,000

3 to 5 8 to 15

Duvernay

40 to 120

15,000 to 30,000

40 to 150

20,000 to 35,000 10 to 26

Bakken

10 to 25

Lower Shaunavon

10 to 15

Viking

10 to 15

50 to 250

10,000 to 30,000

10 to 20

Cardium

200 to 300

8,000 to 20,000 2,000 to 4,000

25 to 80 30 to 40 6 to 13

6,000 to 10,000 4,000 to 15,000

20 to 40 20 to 40

Source: Canyon Technical Services

of fractures per wellbore, combined with the increased adoption of 24-hour operations, provide the basis for strong growth anticipated in North Dakota.

The Marcellus shale play has evolved into one of the most economic natural gas–­ producing regions in the United States.

Calfrac deployed its third fracturing fleet into the Marcellus shale play in August 2011. Two of the three crews are contracted to large producers under long-term minimum-­ commitment agreements, with the other crew

The third area of growth for Calfrac in the U.S. market is the emerging Niobrara oil shale play of northern Colorado and Wyoming.

Calfrac deployed an additional fracturing spread into this region late in the fourth quarter of 2011. Similar to the Cardium play in Canada, this region was considered mature, but has been revitalized using multistage fracturing techniques in horizontal wellbores. While still in the early stages of development, recent exploration successes by some of the company’s customers, plus

equipment utilization, requiring fewer incremental crews to complete customer programs. Overall, Calfrac expects that the incremental horsepower contemplated by the revised capital budget will properly meet the anticipated future demand for its services.

Trican Well Service Ltd. also enjoyed phenomenal growth in 2011. Consolidated revenue for 2011 increased by 56 per cent to $2.3 billion compared to 2010, and net income increased to $338.6 million compared to $150.4 million in 2010.

“ New play development is also expected to support growth in the Canadian pressure pumping industry. We expect to see increased activity in new plays such as the Duvernay, Nordegg and Muskwa.”

— Dale Dusterhoft, chief executive officer, Trican Well Service Ltd.

committed to one of these customers under a long-term right-of-first-refusal arrangement.

The company is completing the construction of a new district facility in Smithfield, Pa., to service this play, which will provide the capacity to service not only the Marcellus, but also a large part of the emerging liquids-rich Utica shale play. Calfrac recently completed its first significant project in the Utica play, which has the potential to provide a significant future growth platform for the company.

announcements of accelerated drilling by certain large-area operators, provide the basis for optimism.

The company has chosen to reduce its 2012 capital budget by $94 million to a total of $271 million. The reduced capital budget recognizes the lower horsepower requirements of many of today’s developing unconventional oil and liquids-rich reservoirs. In addition, the trend towards the greater adoption of 24-hour operations has resulted in improved

“Our Canadian operations achieved record annual revenue of $1.3 billion and record operating income of $464.7 million,” Trican chief executive officer Dale Dusterhoft reported to shareholders in the company’s year-end report. “Strong demand in the Canadian market was led by activity in the oil and liquids-rich gas plays, as oil prices remained strong throughout 2011. Although the year-over-year Canadian rig count was up by 21 per cent, the oil well count increased

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

43

Feature

(millions of dollars)

2008

2009

13,002

14,316

Gas plants

8,403 2009

2010

0

2008

2009

2,810

8,000 4,000

2008

12,725

16,407

16,000

355 685

0

Wells & flowline

12,000

292 519

3,000 2010

Gas plants

5,699

6,000

367 561

0

720

1,000

1,120

1,213

9,000 2,000

EOR

15,000 12,000

2,772

3,000

18,000

Field equipment

10,150

4,000

Drilling

Operations

16,230

4,129

4,306

5,000

Drilling

8,429

Geological/geophysics

Development

2,808

Exploration

2,896

INDUSTRY EXPENDITURES

2010

Source: Canadian Association of Petroleum Producers

by 41 per cent, while gas well count decreased by five per cent. In addition, Trican’s Canadian operations continued to benefit from the strength of horizontal drilling activity in 2011. The number of horizontal wells drilled as a percentage of total wells drilled increased to 55 per cent in 2011, compared to 42 per cent in 2010.”

The Canadian fracturing fleet increased by 62,500 horsepower during 2011, and the size of Trican’s cementing, acidizing and nitrogen fleets also expanded during the year.

“Annual 2011 U.S. revenue of $738.9 million was 105 per cent higher than in 2010, and our operating income of $190.8 million was a 173 per cent increase compared to 2010, both record highs for our U.S. operations,” Dusterhoft reported.

Demand for U.S. pressure pumping services grew in 2011, as the overall U.S. rig count increased by 22 per cent. However, most of the growth was generated from areas containing oil and liquids-rich gas, such as the Eagle Ford, Permian and Oklahoma regions.

Conversely, dry gas areas such as the Haynesville, Fayetteville and Barnett shales all experienced a decrease in year-over-year rig count. Year-over-year rig count in the oil and liquids-rich gas areas where Trican operates increased by 53 per cent, compared to a 21 per cent decline in the dry gas areas.

Horizontal drilling continued to grow in the United States during 2011. Horizontal wells represented 57 per cent of active U.S. drilling rigs in 2011.

“Our U.S. operations grew substantially during 2011,” noted Dusterhoft. “The expansion included commencement of fracturing operations in the Eagle Ford and

44

june 2012

Permian regions and the addition of a second fracturing crew in the Marcellus region.”

Like Calfrac, Trican has reduced its 2012 capital budget as supply for pumping horsepower catches up with demand in unconventional plays across North America.

Trican’s 2012 capital budget is projected to be $582 million and has been reduced by $96 million from the previously announced 2012 capital budget.

“The capital program reductions are primarily for our U.S. operations and include the cancellation of 50,000 fracturing horsepower and four twin cementing units in the U.S.,” said Dusterhoff.

Going forward, Dusterhoff said Trican expects strong performance in Canada and mixed performance in the United States in 2012.

“Canadian demand for pressure pumping services was strong in 2011 and we expect this trend to continue in 2012,” he explained.

“Oil and liquids-rich gas-directed activity is expected to lead the increase, with strong oil prices anticipated throughout 2012. High demand in the oil and liquids-rich gas plays is expected to be partially offset by a decline in dry gas activity, as natural gas prices are expected to remain weak throughout 2012.

However, activity in the Canadian oil and gas industry is currently dominated by oil and liquids-rich gas activity. This trend is expected to continue with recent industry forecasts suggesting that oil and liquids-rich gas activity could represent above 80 per cent of Canadian drilling activity in 2012.

“We expect strong Canadian demand to be supported by the continued strength of horizontal drilling activity,” he added. “The

number of Canadian horizontal wells drilled during 2011 increased by 43 per cent compared to 2010, and represented 55 per cent of all Canadian oil and gas wells drilled, compared to 42 per cent in 2010 and 30 per cent in 2009. We expect this trend to continue in 2012 due to the favourable economics of horizontal wells compared to conventional vertical wells.

“New play development is also expected to support growth in the Canadian pressure pumping industry. We expect to see increased activity in new plays such as the Duvernay, Nordegg and Muskwa. These plays contain oil and liquids-rich gas reserves, and with strong oil prices anticipated, the 2012 well count in these areas is expected to increase compared to 2011,” he added.

Dusterhoft said Trican expects operating margins to remain strong in 2012.

“Cost increases for key inputs such as sand, acid and guar, as well as higher employee costs, are anticipated,” he noted.

“However, pricing increases are expected to offset the higher costs and result in 2012 margins that are consistent with 2011.”

Trican anticipates U.S. activity to grow in oil and liquids-rich gas regions and slow in most dry gas regions. The rig-count declines in the Haynesville, Fayetteville and Barnett regions have resulted in a redeployment of equipment out of the dry gas areas and into the oil and liquids-rich gas areas.

“This redeployment has moderated managements’ expectations regarding growth in the U.S. market for 2012. However, we continue to anticipate U.S. activity to remain strong as additional oil and liquids-rich gas plays are developed,” said Dusterhoft.

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Company Profile

3D drilling tools inc.

Dedicated to supplying quality equipment and services for drilling, completions and workovers

They look after their customers with a supply of OEM parts on their shelves...they also have the blueprints, drawings and specifications on all heads and parts so they will know exactly what it is you need and how to manufacture your order.

46

June 2012

3D Drillings Tools Inc. was initially recognized primarily as a rental company but has evolved to be known as a manufacturer of Grant heads and mud savers.

3

D Drillings Tools Inc. is a Canadianowned oilfield service company based in Edmonton that is dedicated to supplying quality equipment and services for drilling, completions and workovers.

Gord Armstrong, the president of 3D Drilling Tools Inc., has been actively involved in the oil and gas industry for 35 years. He spent a few years as a driller when he broke into the industry, spent 20 years involved in drill stem testing and worked in the development of oilfield products such as the 3,000-pound underbalanced drilling head.

Armstrong shifted focus in 1989 when he became the operations manager of an oilfield services company in Edmonton. When it was bought out by another company, he continued in his position until a business opportunity presented itself in late 2003. Armstrong put the final details in place to become the owner

of his own company, 3D Drillings Tools Inc., and inherited quite a jewel within the business. Since 1990, 3D had held the exclusive Canadian operations of AZ Grant, a solid company that had been in operation since 1958. Today AZ Grant is very well known for their line of oilfield heads that are simply called ‘Grant heads.’ 3D Drillings Tools Inc. was initially recognized primarily as a rental company but has evolved to be known as a manufacturer of Grant heads and mud savers. Today, 3D Drilling Tools Inc. has a proven track record with the manufacturing of these products.

They look after their customers with a supply of OEM parts on their shelves. As the Canadian operations of Grant, they also have the blueprints, drawings and specifications on all heads and parts so they will know exactly what it is you need and how to

manufacture your order. While head, mud savers and valve manufacturing are big components of what they do, 3D Drillings Tools Inc. also deals in air drilling services, drill pipe rental, hole openers, rentals, down hole tools and more.

Business internationally has steadily grown over the years. Products have been shipped to customers in Mexico, the U.S., Turkey, Middle East, Australia, the Mediterranean, New Zealand, Japan, and Central and South America.

With a very proven track record, 3D Drillings Tools Inc. can manufacture your Grant heads, mud savers and other equipment, supply in-stock parts quickly so work can continue on site smoothly, back it up with their Certificate of Conformity, and know exactly what needs to be done to fulfill your requirements.

FAST FACTS

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3D drilling tools inc. address: 8135 Wagner Road Edmonton, AB T6E 4N6 T: 780.440.1922 F: 780.440.4249

WEBSITE: www.3ddrillingtools.ca

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Company Profile

alberta welltest incinerators LTD. Guaranteeing you superior results

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lberta Welltest Incinerators (AWI) provides industry-leading incineration technology that is dedicated to reducing the environmental impact of oil- and gas-related production test flaring. AWI’s low-emission burner technology provides a significant edge over conventional flares and enclosed flaring equipment, along with competitive rental rates, 24-hour service and an intense focus on client satisfaction.

AWI’s industry-leading incineration technology is highly effective and efficient, converting 99.99 per cent of methane to CO2 and H2O. The system disperses combustion products thanks to its high operating temperatures, increased stack velocities and a forced draft system.

Designed specifically for well completion applications with patents pending, AWI’s equipment is “the most efficient and effective on the market for that purpose,” says AWI vice-president, Dan Guenette. “It is the only incineration equipment in the industry specifically designed for well completions and well testing applications—that’s really the big thing. We designed it specifically for doing that job, and it works very well.”

Based in Whitecourt, Alberta, AWI works primarily in Alberta, British Columbia and Saskatchewan. Founded in 2004, the company has three full-time workers responsible for operations, sales and business development as well as administration. AWI’s employees are “top-notch people,” says Dan Guenette, who believes it is AWI’s people who make the company the success that it is, as much as its equipment.

AWI represents the best available technology (BAT) to handle the effects of high-volume flaring associated with well testing, improving combustion with high internal temperature retention and reducing noise pollution. The AWI dual continuous ignition pilot system provides optimum fuel and air mixing energy, ensuring extremely high combustion efficiency. The AWI equipment runs quietly and efficiently, emitting no odour, no smoke, no visible flame and no heat radiation at ground level.

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AWI’s control system includes a forced draft multi-point vortex burner, automated air delivery system, dual pilot continuous ignition system, and continuous temperature measurement and recording. Instantaneous online temperature monitoring and recording take place through the on-board communications module. Clients can access temperature data with a password, and monitor real-time temperatures and well test progression from any computer with Internet access.

The simple automated control system is user-friendly, with a rapid set-up. The equipment is skid-mounted for ease of loading, transportation and installation.

Installation is completed in just 20 minutes, with no guy wires and zero ground disturbance. Compared to conventional and enclosed flaring, AWI technology offers: • Combustion efficiency of 99.99 per cent, resulting in improved air quality and reduced greenhouse gas emissions; • Stable, consistent combustion in an enclosed, lined chamber unaffected by wind; • A freestanding unit with zero ground disturbance, no smoke, no visible flame and no odour; • No heat radiation at ground level, resulting in improved protection of personnel, equipment, and Arctic/tundra and other sensitive environments; • Oversized load permits and pilot trucks are not required with AWI’s equipment, which measures 40 feet long by 11.5 feet wide and weighs 16,500 kilograms; • Uses significantly less enrichment fuel than a flare to efficiently incinerate low–heat

content gases (H2S) with 99.99 per cent combustion efficiency; • Compliant with Alberta Energy Resources Conservation Board (ERCB) Directive 60.

The equipment is approved to incinerate sour gas above five per cent, as per ERCB Directive 60 requirements. The system features a 40-foot exit elevation, dual continuous pilots, continuous temperature monitoring and recording, and the ability to maintain a temperature of 600 degrees Celsius for H2S incineration, reducing or eliminating additional fuel requirements.

Oil and gas producers choose AWI over conventional and enclosed flaring primarily when: • Working within close proximity to neighbours and stakeholders (farmers, ranchers, residential and urban areas, cottage country); • Completing wells while ensuring “tight hole” status when necessary; • Ground disturbance and ground temperature radiation advantages are necessary in environmentally sensitive areas; and • There’s a presence of H2S in the well gas stream.

AWI has also recently added a line of Low Flow Incinerator technology, designed for the lower flow rate, sweet gas applications, pipeline blowdowns, production facility temporary applications, etc. This equipment is trailer mounted for ease of transportation and easy to operate with reliable solar-powered controls for LPG Pilot Ignition and Monitoring.

It’s no surprise that AWI has been consistently gaining market share, year after year. Guenette sees a very bright

future for AWI. “We’ve got strong market share in western Canada, and have taken the technology into the U.S. In January 2012 we opened an office in Denver for our new subsidiary, American Welltest Incinerators, Inc. We are very excited about that.”

The AWI equipment is efficient, hassle-free and easy to operate. Just one button. Turn it on. Walk away.

FAST FACTS alberta welltest incinerators ltd./ american welltest incinerators inc.

PRESIDENT/vice-president Don Guenette/Dan Guenette YEAR INCEPTED: 2004 NUMBER OF EMPLOYEES: 3 BUSINESS CATEGORY: Oil and gas industry equipment rentals ADDRESS: PO Box 447, Whitecourt, AB Toll-Free: 1.888.778.0960 SALES: Rick Henders T: 403.816.7116 E: Rick@awincinerators.com

WEBSITE: www.awincinerators.com

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Company Profile

All around oilfield services ltd.

First in the directory, first in service Family-owned All Around Oilfield Services matches client satisfaction with its position on the directory list

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ourteen years ago, Darcy Miller was growing tired of working long stretches away from home, so he thought if he had just one unit of his own he could be near home more often. That hunch soon took on new life and grew much bigger and more successful than he had imagined. “Natural gas had just taken off at the time and the demand was there so we just kept expanding,” he says. Now he’s president of a company owned by himself and his two brothers, Mike and Kevin—they called it All Around Oilfield Services.

He says one advantage the name gave them was being first in

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service directories listings with their company initials, AAO. But these guys knew they had to strive for first in service, too. Their main philosophy: “Me and my brothers and the family are not scared of working,” says Miller.

“It seems like any more that’s appreciated; our people want to work and if it has to be manually we’ll do whatever it takes—we’ve

never asked a man to do what we wouldn’t do ourselves.”

All three owners work hands-on. AAO is based in Barrhead, northwest of Edmonton in natural gas–rich country. With about 20 employees, they provide a wide range of oilfield services: tank trucking, hydrovaccing, combo units, steamers, equipment hauling, light excavating, dozer work, well abandonments and wellsite cleanups.

They do it with a fleet of 35 units, which range from trucks and

“ They show up on time, they have good equipment and good communication. We never have any problems.”

— Mike Petersen, production foreman, TAQA North Ltd.

trailers to cats, backhoes, graders and skid steer loaders.

In recent years the original AAO has grown to include AA Rentals, which handles everything from 400-barrel tanks to rig mats and equipment rentals. It also built a 6,000-square-foot maintenance, repair and fabrication shop they’ve called AA Manufacturing & Mechanical works.

Mike Petersen, Production Foreman at Calgary-based oil and gas exploration company TAQA North, has been using AAO’s tank truck and some of their snowplow services regularly

for the past four or five years. He says it’s the Millers’ honesty and reliability that keeps them coming back. “They show up on time, they have good equipment and good communication,” says Petersen. “We never have any problems. It’s really nice not to have to chase guys around to get them to show up when you need them.” He says if anyone asks, “we recommend them.”

It is that all-important word-of-mouth that helps keep the clients coming back, old and new. “You’re only as good as your last job, so we try to do that and carry on,” says Miller. As well, to bolster that, they call on companies that might need their services. “We visit our

clients; we do the Calgary visits and stuff like that.”

Part of the AAO business philosophy is keeping a balance.

“We try and treat our customers no different than if we were hiring a contractor to do something for us,” says Miller. “We try to be fair and honest—not supposedly ripping people off.” And here’s the balance: “When you’re being fair and honest, make sure you are doing it for yourself too,” he says. “You should never feel bad about making money because that’s why you invest in a business.”

FAST FACTS all around oilfield services ltd. address: PO BOX 4798 Barrhead T: 780.674.6457 E: darcy_aaoilfield@telus.net

all around manufacturing & mechanical address: PO BOX 4798 Barrhead T: 780.674.5115

WEBSITE: www.aaoilfield.com

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Company Profile

APex equipment ltd.

We sell solutions

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pex Equipment Ltd. is a solutionsoriented manufacturer’s agent supplying industrial engineered process equipment to companies across western Canada.

Apex provides innovative solutions to process needs, providing customers with reliability, safety, and lower lifetime cost.

“We represent manufacturers that will provide viable, cost-effective and efficient solutions to our customers,” says Apex Equipment Sales Manager, Rod Chinook.

Apex represents specialty pump lines that handle very difficult applications, water treatment systems, high shear mixers, and NOx emission reduction systems, manufactured by vendors worldwide.

A privately owned Alberta company based in Calgary, Apex has been in business for 17 years, serving the oil and gas, chemical, and petrochemical industries, including refining and upgrading. Apex’s highly experienced staff—including professional engineers—can provide a full range of services including packaging, installation, commissioning, and repair.

“We represent products that solve particular processing problems,” Chinook says. “We tend to represent smaller manufacturing companies with unique products—we are very niche-oriented. We don’t just sell equipment; we sell solutions to specific, tough applications.” For example, low NPSH (Net Positive Suction Head), low

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flow, high discharge head, high temperature, high viscosity, and high solids content.

Apex, which handles specialty pumps and process systems, typically represents smaller, individual-owned manufacturing firms that specialize in manufacturing equipment for tough applications. “We don’t just move fluid. There are a lot of companies out there that sell pumps that just move fluid—and that’s fine. But that’s not us,” Chinook says.

“We are the real specialty stuff.”

As far as the future goes, “it’s so bright, we need shades,” smiles Chinook. “With the new product lines we’ve brought on and with our existing product lines, the climate in the oilsands and the growth in Alberta, the company is going to grow dramatically over the next five to eight years.”

Among the products that Apex carries are a wide range of pumps, including regenerative turbine pumps; magnetically driven pumps; process reciprocating pumps; pumps to API specifications, including API-610, -674, -675, -676, and -685; and pumps to ANSI specifications.

In its water treatment line, Apex carries corrugated plate interceptors, induced gas flotation systems, hydrocyclones, and walnut shell filtration systems. Apex also carries thermal oxidation systems for NOx emission reduction, and high shear mixers for emulsification of hard-to-mix liquids and solids.

New Vendor Representation The company has recently started to represent several new pump product line vendors across western Canada, including: • Torishima Pumps—Torishima’s API-610 pump range covers all types of centrifugal pumps, including horizontal and vertical, single stage, two stage and multi-stage, single case and double case (barrel type), vertical sump and vertical canned (or double case), plus high-viscosity discrotor pumps; • Coreau Gear Pumps—specialty gear pumps with everything from dosing pumps to large high-temperature, high-pressure process pumps; • All-Prime Pumps—solids-handling selfpriming pumps; • Ika High Shear Mixers—IKA Works Inc. offers a complete line of high shear batch and in-line process mixing equipment and integrated systems for a variety of applications, including mixing, dispersing, homogenizing, wet milling, size reduction, and kneading; • OMG Pumps—a wide range of chemical metering pumps, both plunger and diaphragm style; • Swaby-Lobeline—tri-lobe slurry pumps.

Longtime Vendor Representation • Peroni Pump—specialty process reciprocating pumps. Peroni manufactures a

Apex represents specialty pump lines that handle very difficult applications, water treatment systems, high shear mixers, and NOx emission reduction systems, manufactured by vendors worldwide. complete range of high-pressure plunger/ piston/diaphragm pumps, which are designed for process applications requiring continuous heavy duties; • Roth Pump Company is the leading developer and manufacturer of low NPSH regenerative turbine pumps; • Dickow Pump is one of the world’s leading designers and manufacturers of magnetically coupled pumps, including volute casing pumps, multi-stage horizontal centrifugal pumps, multi-stage vertical submersible centrifugal pumps, magnetically coupled pumps, and metal bellows mechanical seals; • Vanton Pump Company is dedicated to the design and manufacture of nonmetallic pumps for handling corrosive and aggressive acids, salts, solvents, halogens, DI water, and other problem fluids. Vanton offers industry the most extensive line of engineered thermoplastic pumps;

• McFarland Pump—reciprocating chemical injection pumps, and high-pressure, highflow water jet pumps; • EnviroPump and Seal’s VIT Super-ANSI pumps come with centreline mount casing, which assures coupling alignment through a wide range of temperatures; a closed design, which protects personnel; and heavy duplex thrust bearings, positioned close to the impeller, for reduced shaft deflection and improved mechanical seal performance; • Teikoku Canned Motor Pumps—Teikoku Electric Manufacturing Company is the largest manufacturer of seal-less canned motor pumps in the world. Teikoku designs and manufactures both pumps and motors, ensuring total quality control.

The Teikoku Canned Motor Pump provides safer, more efficient operation—an advantage when pumping hazardous or hard-tohandle materials;

• AGI Specialty Valves—automatic recirculation valves for pump protection; • CETCOMONARCH (CETCO Oilfield Services Inc. & Monarch Separators, Inc.)— engineered and manufactured Corrugated Plate Interceptors (CPI’s) Deoiling Hydrocyclones (DOH), Induced Gas/ Dissolved Gas Flotation Systems (IGF/ DGF/ISF), Filtration Technologies such as Nutshell Filter Systems (ORF’s), and Hi-Flow Coalescer Systems; • Process Combustion Corporation (PCC) is a world leader in the design and supply of pollution control systems, using thermal processes to meet environmental regulations.

FAST FACTS APex equipment ltd.

Sales manager: Rod Chinook T: 403.214.2049 F: 403.214.2052 E: rod@apexequipmentltd.com

WEBSITE: www.apexequipmentltd.com

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Company Profile

CanElson Drilling Inc. The Swiss Army knife of drilling rigs drives CanElson growth

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anElson Drilling Inc. (TSX: CDI) is a leading provider of oilfield services, manufacturing and operating drilling rigs.

CanElson has grown from two employees in 2008 to more than 750 today; and from one rig in December 2008 to 37 rigs that are active in three countries: Canada, the United States and Mexico.

The Calgary-headquartered company was founded by Elson McDougald, the late Daryl “Doc” and Don Seaman, and Randy Hawkings, P.Eng., who is CanElson’s President, CEO and a Director. The concept for CanElson came out of a brainstorming session between McDougald and Michael “Cannon” Smith. They wanted to build a drilling company around a certain rig style: the small footprint, ultra-heavy duty telescoping double, which Hawkings calls “the Swiss army knife of drilling rigs that can do almost any job.” Designed around the horizontal resource plays that are currently being drilled, this rig can handle the majority of the work that energy companies are looking for in resource plays.

“A double pulls two pieces of pipe at a time.

It’s very fast moving—fast to put together and fast to take apart. It’s an ultra-efficient package,” explains Hawkings, who has a background as a drilling engineer. “The idea was that the very large majority of wells being drilled could be drilled with this rig. It has application in several countries and in several different oil and gas plays. Today, we are proud to say we are fully crewed up and have people calling to work for us every day.”

CanElson achieved its rapid growth rate using two mechanisms: organic growth, by building rigs and through strategic acquisitions. “In some cases, we built our own rigs.

In other cases, we’ve acquired other rigs or companies that fit our model,” Hawkings says. “In terms of growth, it’s been with discipline. We haven’t got any debt to speak of. We’ve grown, but kept our debt load low.”

CanElson brings a strong track record to the table. There is exceptional depth and diversity of executive experience; senior management has combined experience in the field of nearly 150 years. With the exception of the finance group, every senior operations 54

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manager has a drilling background, from the chairman down.

Other factors that set CanElson apart are its atmosphere and employee-inclusive ownership. “Senior management is intimately involved with the field. There is a very close relationship, through an open door policy and frequent field visits,” Hawkings explains. “We like to stay in close touch and, equally importantly, we try to make every employee a shareholder. The dynamic changes when a person is a shareholder, not just an employee. It’s a different atmosphere.”

Hawkings adds, “Another thing that’s fairly unique is that we have a culture of partnership with our customers.” CanElson’s problem­solving approach builds long-term relationships, and the company has de­veloped a number of joint venture and long-term contract arrangements. “We have formalized that relationship, where they are our partner in the ownership of the rig, and they are also our customer. When they are successful, we are successful as their partner.”

Recently, CanElson announced an initiative to use natural gas as fuel for drilling rigs.

“With this, we are using natural gas and diesel to fuel our rigs, so it’s better environmentally in terms of emissions—and it’s also finding a use for natural gas, which is at a very low price.”

As a longer-term objective, CanElson is also working on technology to take flare gas, normally vented to the atmosphere, and use it to fuel a drilling rig. “We’ve got one of those rare initiatives that is both environmentally friendly and, we believe, profitable,” Hawkings says. “We can take this gas that is being vented to the atmosphere and use it in a rig or other equipment—such as a diesel engine—and thereby save costs and conserve the environment.” CanElson believes that from multiple perspectives, “This puts a win in everybody’s column.” This technology will benefit energy companies, the environment, government and CanElson’s own shareholders, Hawkings says. “We are very proud to be a part of the solution.”

CanElson seeks to drill wells cost effectively, with excellent rig equipment and motivated people working productively and

safely for the world’s top oil companies— resulting in top-tier performance for shareholders. CanElson’s vision is to be the drilling contractor of choice for both customers and shareholders, where employees are owners and work in a challenging, rewarding and safe environment.

“Our success is built on our people; providing a superior product for customers who are our partners; and providing a good return to our shareholders.”

FAST FACTS CanElson Drilling Inc. Executive Assistant: Jean Brown T: 403.266.3922 E: info@canelsondrilling.com

WEBSITE: www.canelsondrilling.com

Experience, leadership, performance.

Since it was established in late 2008, CanElson Drilling Inc. has grown quickly to become one of Canada’s premier drilling contractors. In addition to building its own drilling rigs, the company is expanding its fleet of drilling and service rigs through acquisition. CanElson now operates a fleet of 37 rigs (34 net).

With operations in Western Canada, West Texas, North Dakota and Mexico, CanElson Drilling Inc. is setting new standards for rig utilization.

With right-sized, purpose-built rigs built for horizontal and resource play drilling and experienced, well-trained crews, the company is achieving new records for cost-effective, efficient drilling operations.

CanElson Drilling Inc. Suite 700, 808 - 4th Avenue SW, Calgary, AB, Canada T2P 3E8 Phone 403.266.3922 Fax 403.266.3968 www.CanElsonDrilling.com TSX: CDI

Company Profile

city of fort saskatchewan The City of Fort Saskatchewan is the place to be for economic opportunity and a promising future

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he gateway to Alberta’s Industrial Heartland, Fort Saskatchewan is a regional service centre situated just 30 minutes from downtown Edmonton. It serves the Industrial Heartland—one of the country’s largest concentrations of petroleum, refining, petrochemical and chemical processing clusters.

“Fort Saskatchewan supports growth for a whole variety of businesses in the community.

It’s ideal for well-established businesses as well as for emerging, innovative businesses,” says Fort Saskatchewan economic development officer Terry Stacey.

“Fort Saskatchewan’s service and supply sector is increasing,” she adds, “since the city is seen as a good location for establishing service and supply businesses that serve not only Alberta’s Heartland, but also Fort McMurray. It’s being seen as a good location for modular fabrication sites because we are on the high-load corridor going up to Fort McMurray.”

Approximately $35 billion worth of industrial facilities and investments have been made in Fort Saskatchewan and the Industrial Heartland. “They have a certain amount of maintenance and supply needs,” Stacey says, noting that Fort Saskatchewan is well positioned to meet those needs.

A number of businesses have recently opened in Fort Saskatchewan’s Eastgate Industrial Park, including ComRent International, which handles rental electrical testing equipment; Applecart Logistics, a

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truckload LTL and intermodal shipment company; Golderado Contracting Corp., which contracts and manages labour in the Industrial Heartland; and Budget Car and Truck Rental.

Adjacent to Eastgate Business Park and just south of Highway 15 is Fort Industrial Estates, developed by Trans America Group, a private Edmonton-based developer, building owner and property manager. Fort Industrial Estates includes 180,000 square feet for lease within two low-rise buildings, with both office space and office-warehouse space available. Trans America also has 1,000 acres of land in varying stages of development, with some land available for immediate sale.

“The past number of months have seen significant improvements in leasing office space in our buildings, and in inquiries regarding land sales,” says Trans America Group chief operating officer, Bob Horton.

“Our specialty, in both our buildings and our land selections, is the flexibility to accommodate whatever type of development comes along. The buildings that we design—where we have located a diverse group of tenants— have a great deal of flexibility, allowing us to accommodate varying sizes of tenants. That’s in addition to having parcels of excellent land for private development by the purchaser.”

Trans America Group offers “a lot of land that is highway frontage. We are ideally situated,” adds Bridgette Dow, Trans America’s assistant to the president. Dow Chemical and Sherritt International are located across the highway from Trans America’s land, while the Shell Canada upgrader is eight kilometres away.

“Another advantage of our land is that it’s on the high-load corridor. Compared to other industrial lands in the region, our land is closer to Fort McMurray,” Horton says.

Trans America Group has been developing in the Edmonton capital region for the past four decades, and is excited about their diverse, strategically located land holdings in Fort Saskatchewan.

“Trans America Group believes the time is right to capitalize on what we expect will be a rising demand for space among oilsands suppliers,” Horton says. “Trans America has

land available, and we can create whatever size parcels are required and whatever size lease space is required. Trans America Group is your choice for land, warehouse and office needs in Alberta’s capital region. Our locations will be your competitive advantage.”

Fort Saskatchewan is a full-service community offering businesses an excellent opportunity to grow, while at the same time providing a high quality of life for the people who live here. “We have all the amenities, all the housing choices, all the commercial opportunities—and great recreational and cultural amenities as well,” Stacey says.

A new hospital, the Fort Saskatchewan Community Hospital, has just opened, with more space than the facility it replaces, and a greater ability to serve the community and region.

With a population nearing 20,000, projections call for Fort Saskatchewan to continue growing at a rate of four per cent per year for the foreseeable future.

“We are a growing community, and are working hard to keep moving forward as we grow into a larger city, while retaining our great history, values and the calmness of life in a friendly, caring community,” says Fort Saskatchewan mayor, Gale Katchur.

FAST FACTS city of fort saskatchewan economic development officer: Terry Stacey T: 780.992.6231 E: tstacey@fortsask.ca

WEBSITE: www.fortsask.ca

trans america group manager, property solutions: Marvin S. Horwitz T: 780.486.3919 C: 780.668.9257 E: marvin@transamericagroup.com

WEBSITE: www.transamericagroup.com

seizing

industrial opportunity

For business expansion or relocation information contact Economic Development at:

780.992.6231 or visit www.fortsask.ca

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Company Profile

Drilling Rig and Parts • Top Drives • Mud Pump F-800/1000/1300/1600/2200 • Rotary Table 17-1/2", 20-1/2", 27-1/2", 37-1/2" • Master Bushings • Kelly Drive Bushings • Wire Rope • Sand Line • Drill Pipe, Kelly and Heavy Weight • Drill Collars • Safety Clamp • BOP and Control Systems • Drill Pipe Slip, Drill Collar Slip, Casing Slip

Production Equipment • Casing & Tubing • Pump Jacks • Electrical Submersible Pump (ESP) System • Sucker Rod • Well Head and X-Mas Tree

Workover Rig and Parts • Workover Rigs (150/250/350/450/550/650/750/1000 HP) • Plunger Pump (SJ300/500/600) • Power Tongs • Air Spider 50 Ton, 80 Ton & 125 Ton • Sucker Rod Elevator

Oilfield Chemicals • Drilling Fluid Additives • Cement Slurry Additives • Oil Production Chemicals • Oil and Gas Transportation • Gathering Chemicals-Water Treatment

CASCO Ltd. 2419 - 96 Street Edmonton, AB T6N 0A7 Phone: 780.433.1887 Fax: 780.433.1926 www.petro-casco.com 58

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www.cptdc.com CPTDC Canada Branch Offices

China Petroleum Technology & Development Corporation

China Petroleum Technology & Development Corporation (CPTDC), a wholly-owned subsidiary of China National Petroleum Corporation (CNPC), as the largest supplier of Chinese petroleum and petrochemical materials and equipment in the world, engages in the overall plan of domestic sales and export of the manufactured materials and equipment of CNPC, and takes the responsibility to provide materials and equipment for CNPC overseas projects.

With 53 overseas offices strategically located in 40 countries, CPTDC has supplied its products to 70 countries and regions and has maintained a stable marketing network in world major oil production areas, boasting an annual contract value of over 3.9 billion US Dollars.

as well as 7,000km pipe line. With 14 warehouses, maintenance and service centers and 2 assembly & fabrication sites across the globe, the corporation’s in-time and professional services have been widely acclaimed by users.

CPTDC’s operation principle is “Based on Service, Striving for Excellence”. The corporation aims to build the international brand of CNPC petroleum materials and equipment and endeavors to become a major supplier in the world energy industry.

CPTDC commits itself to introducing more Chinese petroleum equipment and technology into the world market and making more contribution to the development of the Chinese petroleum manufacturing industry.

Based on the strong manufacture capability and technical edge of CNPC, CPTDC can provide customers a full range of petroleum materials and equipment from upstream to downstream. All the CNPC manufacturers are API or ISO certified.

CPTDC possesses a professional technical support system to provide customized complete solutions covering technical plan, quality control, installation, commissioning and after-sales services. Up to now, CPTDC has succeeded in the execution of the contracts for 218 drilling rigs and 391 workover rigs

PEMSCO Ltd. Bay D, 7003 - 5th Street SE Calgary, AB T2H 2G2 Phone: 403.228.6088 Fax: 403.228.6880 www.pemscocn.com P R O F I L E R M A G A Z I NE . C O M

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Company Profile

Cummins Western Canada: On site, on demand, on time

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he staff at Cummins Western Canada expert rental power is always ready to provide customers with the most reliable Cummins equipment and exceptional service.

Committed to providing the best overall experience and value, the Cummins rental department underwent redevelopment two years ago, which has proven to be very successful. “Total customer service and satisfaction was our goal when we restructured rentals—that was the focus behind the new change,” says Cummins Western Canada Corporate Rental Manager, Mark Fleury. “What sets us apart from other rental generator operations [is] our customizable products,” adds Fleury. “We strive to make the necessary changes to the rental equipment to meet the customer’s needs, which we do very well.”

Cummins Western Canada has been in the generator rental business for the past 25 years and provides a wide range of equipment.

Some of its equipment has been specifically designed for the oil and gas market, while other equipment has been designed for the construction market. The company currently works out of three primary operational areas: Edmonton, Fort McMurray and Grande Prairie, with field service technicians drawn from 12 other branches throughout western Canada.

Cummins carries industrial diesel and natural gas generator sets for every application and provides complete rental power packages, including all rental power accessories and services required. In all that it does,

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Cummins focuses on providing an uncompromised level of safety and performance. The entire business is structured around customer support and service, with co-ordination and service support centralized in Edmonton and emergency field service technicians in 14 other operational areas. “The fact that we are an original-equipment manufacturer really helps,” Fleury notes. “We have access to some incredibly brilliant support staff and engineers. We have all of this knowledge and experience that is transferred from Cummins Inc. to Cummins Western Canada, giving us all that additional support to fall back on.”

Not only that, Cummins Western Canada can draw on an enormous asset base in the other distributors within Cummins Inc. on the American side of the border. “We have access to several megawatts of rental power equipment, to help us out in emergencies or when responding to large requests from customers. Cummins Inc. is a wonderful brand with a terrific equipment line-up. It makes our lives so much easier,” Fleury says. “It’s a great brand and very successful.”

Cummins Western Canada designs and builds its rental assets to a high degree of safety and serviceability with the end user in mind. “We try to ensure that customer-driven requirements are met on things like sound attenuation, fluid containment, and CSA and Transport Canada certifications. We also strive to replace older equipment with newer tiered equipment with fewer emissions. We

are going greener—we want to be as green as we can be.”

These are some of the reasons that Cummins Western Canada is flourishing. In 2011, Cummins Western Canada was No. 1 in revenue among all Cummins Inc. distribution business units in North America. “I’m extremely happy with our group’s performance. They are true professionals,” Fleury says.

“The oil and gas business segment continues to be strong and our strategy is to grow with it. We really take pride in it—it’s our busiest business segment. We are really fortunate to be working for such a dynamic part of the economy. We’ve been very successful over the last couple of years.”

Going forward, Cummins Western Canada plans to continue its growth year over year, “strictly because of the oil and gas business,” Fleury says. “We have the potential to be a leader in the industry, and are certainly going to do our best to make that a reality.”

Rentals make up part of the Power Generation group at Cummins Western Canada, specializing in renting equipment to end users. Sales of prime and standby power generation and Project Management also form part of the Power Generation group at Cummins Western Canada. With a fleet and services as unique as its customers, you can depend on Cummins Western Canada for all your rental power needs.

Rental Power Solutions

The company currently works out of three primary operational areas: Edmonton, Fort McMurray and Grande Prairie, with field service technicians drawn from 12 other branches throughout western Canada.

FAST FACTS Cummins Western Canada: Rental Power Solutions support manager: Richard Greenways E: richard.greenways@cummins.com

Service Asset Manager: Greg Killam E: greg.killam@cummins.com Toll-Free: 1.855.797.7368

WEBSITE: www.westerncanada.cummins.com

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Company Profile

DSI Thru-Tubing Inc. A premium supplier of thru-tubing services and innovative technologies

“From the beginning our strategy has been to treat each customer as if they were our only customer.”

— Dean Spence, chief executive officer, DSI Thru-Tubing Inc.

D

SI Thru-Tubing Inc. is a Canadian-owned and -operated service company offering wellsite service and tool supply. The Calgarybased company, which specializes in milling, fishing, cleanouts and just about anything to do with coiled tubing, now supplies an innovative technology for composite bridge and flow-through plugs. Although DSI’s focus is to supply experienced service, they run many tools of their own design, which are manufactured in Canada to the highest standards

by DSI’s sister company Dynamic Solutions.

Dynamic Solutions is a downhole tool manufacturing firm established in 2006 by Dean Spence, providing research, development and manufacturing of niche products for the coiled tubing industry. In early 2011, Spence—now DSI’s Chief Executive Officer— established DSI as a separate company. On

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April 1, 2011, Dave Griffith joined DSI as co-owner and became its Chief Operating Officer. Spence’s worldwide experience with coiled tubing operations combined with Griffith’s unmatched thru-tubing knowledge has led to a successful partnership.

In the past year, DSI has grown from four field hands to around 20 with a total employee count in excess of 40. Service locations are now open in Red Deer and Grande Prairie, Alberta; Weyburn, Saskatchewan; and Waskada, Manitoba.

“Our success has a lot to do with our experience,” Griffith says. “We have experienced people, very good tools and equipment, and we understand the need to work with, not just for, our customers.”

The DSI team, built with key people that Griffith and Spence have worked with in the

past plus hand-picked industry veterans, allows the company to offer customers best-in-class service. DSI brings over 200 years of combined industry experience in-house to each and every job.

“DSI values our employees as total assets,” Griffith notes. “We understand that the employees are the reason why we are where we are today. We tell our guys, ‘We expect a lot from you because you are the best out there.’ Our guys realize how important execution is. This isn’t about a good sales pitch in Calgary: it’s about getting the job done on location. When they arrive on location, they know they are the face of the company.”

Because of the high level of experience from top to bottom, their focus on safety and the choice of premium tools they run, DSI

considers themselves to be a premium Canadian service provider. “Just because we are a new name doesn’t mean we have catching up to do,” comments Spence. “We are good at what we do and we are innovating all the time.”

DSI’s innovation record is based on two very successful products in particular: its offset mill technology (allowing the mill to pass through casing deformation and still mill to bottom, saving multiple trips) and the newly re-designed Bear Claw II, a composite frac plug specifically built for unmatched millout performance. “We have teamed up with a fibre company in the U.S. to make design changes to the plug to make it easier for milling. We mill plugs and know the challenges. So we made changes to the plug and tested them and were successful. These plugs are now in the ground in Canada and we have never seen such successful millouts,” says a beaming Griffith. “This is huge for our customers; they are saving a pile of money.”

DSI is quick to react to customers’ needs through its in-house R&D department. The company’s testing facility in Red Deer, with a capability that (to the best of their knowledge) is unmatched in Canada, can conduct full

testing of products during the R&D phase. For example, DSI has conducted numerous surface millouts in front of customers to demonstrate the millout capabilities of various mills, bits and plug designs. Because of this, “customers really see a difference in our products,” Griffith says.

“We are proud of our record of working with our customers,” notes Spence. “We can adapt to the customer’s needs to develop specific tools, to work with them on products that aren’t currently available, to help them with problem areas where something more than what is currently available is necessary. We have done it and we continue to do it.” Spence himself is amazed at how a small private company has been embraced by large oil companies because of its ability to work with them to innovate for their needs. “From the beginning our strategy has been to treat each customer as if they were our only customer. It sounds cliché, but I really think we’ve been able to do that,” adds Spence.

“Our proof has always been in our performance,” Griffith notes. “We pride ourselves on the whole operation going smoothly and not just offering a single product. We work together

as a team to ensure the operation as a whole is a success.”

While the company’s focus remains on the Canadian market, it is also planning an international expansion. DSI is growing aggressively, with plans to expand into the United States and overseas. “We don’t foresee any issues holding us back. If we can maintain our level of excellence and this growth rate, we could be the largest thrutubing company in the world in the next 10 years,” Spence says.

FAST FACTS DSI Thru-Tubing Inc. contact: T: 403.452.8337 Toll-Free (24 hr): 855.346.9788 E: infodsi@dsinc.ca

WEBSITE: www.dsinc.ca

CONFIRMATION RUNS CLEANOUTS COMPOSITE PLUGS

PLUG MILLING FRAC SEAT MILLING TT FISHING

TOLL FREE DISPATCH 1-855-346-9788

CALGARY SALES 403-452-8337 DSI THRU-TUBING INC Proof in Performance

www.dsinc.ca Calgary, AB

|

Grande Prairie, AB

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Red Deer, AB

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Weyburn, SK

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Waskada, MB

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Company Profile

firemaster oilfield services Fire protection service grows to full-service safety service provider over the last 30 years

F

iremaster Oilfield Services has been providing service excellence to the Oilfield for more than 30 years. It was established in 1980 as a safety service company offering Standby Fire Protection and Oilfield Firefighting.

In 1984, the Red Deer–headquartered company also began offering H2S safety services. Firemaster has grown from an original staff of six to more than 300 today, with 11 locations across North America.

While it has grown and changed over the years, Firemaster still offers the same high quality of services and professionalism that have been its hallmark from day one. “We still have some of the same people working for Firemaster that were here during the inception of the company, which speaks a lot

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about who we are,” says Sales Manager, Peter Naaykens. “Firemaster has really focused on customer service, on the well-being of our employees and on helping ensure the safety of everyone in the industry.

We are always looking at new ways to bring in technologies that will help people in the field go home safe.”

Firemaster’s in-house Electronics Department is heavily involved in research and development, designing and manufacturing state-of-the-art monitoring systems and emergency evacuation systems. Among them: the Puma system is a hard wire H2S monitoring system, designed to be expanded to fit most customers’ needs, with 16 channels for H2S monitoring and

eight channels for Lower Explosive Limit (LEL) monitoring of poisonous and flammable gases.

Hand-in-hand with the Puma, Firemaster developed the Lynx, which is another system designed for emergency evacuations. “You need a system that allows people to be able to evacuate the area quickly and efficiently— that’s what the Lynx system does,” says Firemaster Account Manager, Vince Letwin. “It identifies the location where the gas was released.”

Firemaster also dedicates considerable resources to its equipment fleet. The company has just finished building four new combination units: two for Canada and another two for the U.S.

Over the years, Firemaster has evolved to meet the changing needs of the oil and gas industry, and has expanded its services dramatically. Firemaster now offers: Oilfield Firefighting, Emergency Well Control, H2S Safety Services, Standby Fire Protection, Air Quality Monitoring, All-Encompassing Professional Safety Training, Medical Services, Fixed Fire Systems, Emergency Fire Planning, Post-Incident Investigation, and Satellite Communication Systems. Firemaster also makes use of meteorological towers when working with H2S gas wells, monitoring atmospheric conditions on an ongoing basis.

As the company has grown, it has also gained in terms of its service capabilities. In one recent example, Firemaster successfully responded to four different emergency situations in a 48-hour period.

Firemaster’s data acquisition centre runs 24 hours a day, seven days a week, 365 days a year. “We know where our employees are, where they are going and when they are going to get there,” Naaykens says. The data

acquisition centre also tracks all of Firemaster’s monitors in the field, all of its monitoring vans and all of its monitoring systems. “When someone calls, it doesn’t matter what time of day or night they call— they always get a real Firemaster employee who will guide you in the right direction,” Naaykens says.

Every Firemaster employee is given a notebook computer to instantly connect to all aspects of the company through an internal communications portal, which allows them to communicate to all levels of management and amongst themselves, and access all policies and procedures within the organization.

Firemaster’s people are full-time salaried employees who have chosen Firemaster as their place to work, and their profession is a career. “We don’t rely on contractors or day raters to get the work done. It gives our customers peace of mind knowing that our employees are dedicated to us as a company, and they are also dedicated to our customers.

It shows in the quality of work that they do,

and it shows in their standards for safety,” Naaykens says. Firemaster is the only safety company in Canada, as far as they know, that is ISO 9001:2008 certified.

“The guys that work in the field day-to-day are very professional in how they go about doing their work,” Letwin says. “They are highly trained and care about what they are doing.”

Firemaster continues to hire and train people on an ongoing basis. “We are a very, very stable company, and our employees feel that stability,” Naaykens says. “They know they have a future here, that there is not a cycle of layoffs every down cycle, and that we really focus on the well-being of our employees.”

Firemaster also believes it’s important to be a part of the communities it’s active in, and donates to a wide variety of organizations ranging from children’s hockey teams and sporting events to local charities.

The future is exciting for Firemaster, which has seen 30 per cent growth in the last year in Canada, and even stronger growth in the U.S.

FAST FACTS firemaster oilfield services T: 403.342.7500 E: contact@firemaster.ca

WEBSITE: www.firemaster.ca

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Company Profile

Flo-Back Equipment Rental & SALES Providing quality equipment, engineered and built safely

Leveraging the rental fleet allows our customers to rent equipment for their immediate needs while we fabricate a new unit to their specifications, purchase credits earned during the rental period can be applied to the cost of the new unit

F

lo-Back Equipment Rental and Sales is dedicated to building and renting exceptional quality equipment, providing outstanding service, and maintaining high standards in quality control.

“We put our customers first, with a focus on quick deliveries, and operator-friendly packages,” says Flo-Back Vice-President, Mark Brown. “In addition to a large, modern rental fleet, Flo-Back offers delivery, pick up and start up options as well for its clients. We want to make things easy by handling our client’s rental needs with one phone call.”

For Flo-Back customers, it all brings peace of mind. “We ensure quality equipment that is engineered and built safely,” says Brown’s business partner, Flo-Back President Scott Candler. “The integrity of the rental fleet is our top priority,

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maintained by an internal Integrity Management System developed by the partners. All equipment is ultrasonically tested after each rental to ensure that minimum wall thicknesses are maintained, and to ensure the safety of our clients.”

Flo-Back Equipment Rental and Sales opened its doors in 2010 in Nisku, Alberta, after Brown and Candler saw a need for quality processing and testing equipment rental and sales in the oil and gas industry.

The company quickly grew to 30 units, including test separators, line heaters, flow line, wellhead packages and pressurized storage. Currently, Flo-Back has more than 50 units and is building another 25 units at its new fabrication facility in Nisku.

Recently, Flo-Back opened a new fabrication division and obtained B31.3 certification,

which allows it to fabricate process piping and indirect fired line heater coils. “With the new certification, we’re hoping to meet the needs of renters and end users alike,” says Brown, who brings 12 years of equipment design fabrication and rental management experience to the job. “We have an oilfield equipment engineering background and our own design capabilities, so we can handle it all from start to finish, from the concept design to finished product, all under one roof.”

In just two short years, Flo-Back Equipment Rental and Sales has become a quality solution for both the short-term and long-term needs of the energy industry. The company leverages its rental fleet to meet customers’ immediate needs, while fabricating new units to meet their long-term needs.

Backing Brown with technical expertise and

“We have an oilfield equipment engineering background and our own design capabilities, so we can handle it all from start to finish, from the concept design to the finished product, all under one roof.”

—VP Mark Brown

attention to detail is Flo-Back Quality Control manager Duane Fincaryk, who has eight years of experience maintaining and managing the quality programs of major equipment fabricators.

Flo-Back Equipment Rental and Sales is the logical choice to handle customers’ equipment rental and purchasing needs.

“We’re coming to the industry at a different angle,” Candler explains. “We built our rental fleet first, and can now offer both short-term and long-term solutions. This means we can provide customers everything they need immediately, while building to their exact specifications.”

Flo-Back’s equipment includes wellhead separators, test separators, pressurized storage, flow line, line heaters, pump packages, compressor packages, filter

packages, manifolds, flare stacks, and storage tanks. Clients can earn purchase credits through rentals, which can be applied to building new equipment, or used towards the purchase of the rented unit at the end of the contract.

Currently located in Nisku, Flo-Back plans to open additional locations in the next 18 months, in Grande Prairie, Alberta, southern Saskatchewan, and North Dakota.

“We have an extremely aggressive growth plan that will see us grow to several hundred units in the next three years,” Candler says.

“We can be the short or long-term solution to the oil and gas industry.”

Whether you are renting or purchasing, you can be assured that Flo-Back Equipment will be of exceptional quality. Your workforce’s safety is their number one priority.

FAST FACTS Flo-back equipment rental & sales VICE-PRESIDENT Mark Brown T: 780.955.3561 E: mark@flo-back.com

WEBSITE: www.flo-back.com

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Company Profile

great north equipment inc.

A flexible approach to complete wellhead control supply and services

G

reat North Equipment Inc. (GNE) is a supplier of wellhead and pressure control equipment, including manufacturing, repair and field services to the oil and natural gas industries across western Canada. Specializing primarily in API 6A surface wellhead requirements, GNE products and services provide pressure control for a wide range of drilling, completion, production and well-servicing applications.

GNE has field service centres in Brooks, Grande Prairie and Kindersley, but the heart of the company’s operations is its 56,000-square-foot facility in Edmonton. Shop equipment includes 14 state-of-the-art CNC machines, six massive manual lathes and two dedicated milling machines, among other tools and machinery. “We have one of the largest wellhead machine shops in the industry.

Our service technicians and support

management are available on a 24/365 basis to assist our clients,” says Curtis Harbinson, GNE’s Calgary-based sales manager.

GNE provides a full range of wellhead products, including casing bowls, gate valves, drill-through equipment, EFT equipment, etc. “We supply everything for wellhead control in any situation,” says Brad Taylor, southern area manager for the Brooks and Kindersley shops.

“ We have one of the largest wellhead machine shops in the industry. Our service technicians and support management are available on a 24/365 basis to assist our clients.”

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— Curtis Harbinson, sales manager, Great North Equipment Inc.

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FAST FACTS COMPANY NAME great north HERE INDUSTRIES equipment inc.

PRESIDENT/FOUNDER:

Name T: 780.461.7400 T: 000.000.0000 E: info@greatnorthequipment.com E: e-mail

WEBSITE: WEBSITE: www.greatnorthequipment.com www.website.com

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Company Profile

HAMDON WELLSITE SOLUTIONS Offering the most comprehensive product line of instruments and accessories, test kits and portable laboratories for testing drilling fluids, completion fluids, fracturing fluids, oilfield cements and industrial slurries

H

amdon Wellsite Solutions is an oil and gas production engineering service company based in Edmonton, Alberta, that was formed in 1998 by Omar Hamdon, a petroleum engineering graduate from the University of Alberta in 1988. Over the past 14 years, the company has built an impressive customer portfolio throughout western Canada and internationally, as well.

In the early years, the company flourished and floundered during the good times and the bad, which is the nature of the oil patch. The management team made a bold move in 2005 when the company took an important step that would change the company landscape and evolution when they purchased Senior Tech. Inc. Senior Tech was a Canadian distributor of Echometer Co., who are a leading manufacturer of production optimization equipment. This signalled a philosophical change in business operations where Hamdon now diversified into the world of product distribution, which complimented the production services division.

The products division was an instant success and soon Hamdon began venturing into new products and new markets. However, an opportunity arose in 2010 that was unlike all the other ventures in size and in scope.

Fann Instruments, a division of Halliburton, was shifting their business growth strategy to focus on product manufacturing and utilize

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local distributors for their sales and services.

The search to find the right business to partner with was a careful and selective process to determine a distributor that fit their ethical beliefs and vision. This search led them to Hamdon Wellsite Solutions, who Fann were confident and comfortable with to be their Canadian distributor. It was official: Fann put their trust in Hamdon.

Fann is a leading supplier of quality instruments for oilfield analysis since 1939.

Their wide range of products, which number in the thousands, include products for Drilling Fluid testing, Oil Well Cement testing, Industrial Drilling products and Supplies and Reagents.

The partnership between Fann and Hamdon is proving beneficial to both companies. Hamdon has gained another strong product to promote under their expanding Products Division banner while Fann has gained much needed freedom and flexibility to expand on their R & D division, which will be introducing 13 new products in 2012. These new products, along with the many other products, will be showcased during the 2012 Global Petroleum Show in Calgary. Another Fann promise to its customers is the transfer of knowledge and following the GPS, Hamdon/Fann will be offering a one-day free in-depth seminar on the challenges in optimizing drilling fluids and

oilwell cement testing processes. Space is limited and you will need to contact Hamdon Wellsite Solutions to reserve your space.

Hamdon Wellsite Solutions is proud to be the Canadian Distributor for Fann Instruments and look forward to the challenges that lay ahead.

“Solving a customer’s problem is a priority for Fann. That’s the kind of service Fann customers get.”

Fann makes this promise to you: “Fann designs and manufactures instruments that surpass testing requirements with technical support that improves customer efficiency.

After all, we are the original testing equipment company. We’ve been delivering on that promise for decades.”

FAST FACTS hamdon wellsite solutions PRESIDENT/FOUNDER: Omar Hamdon Toll Free: 1.866.448.0074 E: info@hamdon.net

WEBSITE: www.hamdon.net www.fann.com

Company Profile

Senior tech Echometer experts servicing Canada and the world for over 40 years

S

enior Tech is the preferred Canadian distributor for Echometer Co. and has been for over 40 years. While this is impressive, more so is the fact that Echometer has been in business for 60 years—quite a partnership!

Senior Tech’s history has brought the company into the area where they are classified as experts in the field. While first starting out as distributors, Senior Tech’s business has evolved to where they now play a leading role in the training of their product line on an international scale. For the past 15 years they have provided services for businesses in Russia, Kazakhstan, Kuwait, Oman, Jordan, Malaysia, India, Mexico and Nigeria.

Echometer is a world leader in manufacturing production optimization testing equipment, backed with extensive research and development. Their success comes from building a quality and proven product by working closely with highly recognized college and university institutions to develop and advance their products and software.

Echometer also listens to their customers and uses their feedback to incorporate changes to their products—a reason why their lines are well liked and popular.

Echometer understands how valuable and important software is, and to this end has developed what they call their Total Well Management system, which is license-free. It offers a more advanced, complete package with the ability to perform several optimization services in one portable unit. Now a user can perform acoustic fluid levels, dynamometer surveys, pressure transient analysis and plunger lift optimization tests with one device—Model E Well Analyzer.

2012 is an exciting year for both Senior Tech and Echometer as three new products are being released.

The first is the Model H, a portable, intrinsically safe, digital fluid level recorder. It features the same durability and quality as previous models (Model D and Model M)

meaning users will have a seamless transition when using it. As oil and gas explorers and producers require more service and supply companies to be safer in the field, the intrinsically safe component makes this a stand-out product.

The second new model takes Echometer into new territory: wireless data collection!

They have incorporated wireless technology in all their products and developed new software called Total Asset Monitor (TAM). TAM allows operators to connect with multiple wells and devices throughout the producer’s assets and to run tests simultaneously!

Echometer’s third new product line is the Gas Diverter, which is a state-of-the-art gas separator. It can handle higher volumes more efficiently and effectively than standard gas separators. Echometer also carries a complete line of quality proven gas separators.

The Senior Tech/Echometer partnership has evolved into a very trusted relationship.

Business around the globe can rely on being supported by Senior Tech with hands-on training on all products, for service and repair, and for product demonstrations. They can also rely on Echometer to continue to build products that are trusted and well liked by the user. Senior Tech should be your choice. They are the preferred distributor of Echometer products. Look for their new products this year.

FAST FACTS senior tech PRESIDENT: Omar Hamdon T: 780.484.4447 E: info@seniortech.ca

WEBSITE: www.seniortech.ca www.echometer.com

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

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Company Profile

Hi-tech seals inc.

Specialists in seals and service

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i-Tech Seals is a leading Canadian seal distribution company, with a longstanding commitment to customer service. The company’s technical sales staff work closely with customers to find the best solution for any problem. Hi-Tech Seals has worked with the oil and gas industry for over 20 years to provide products that perform beyond the customer’s expectations. The company has strong markets for downhole drilling equipment and for valve and wellhead seals.

Founded in Edmonton in 1990, Hi-Tech Seals has since expanded to five locations across Canada, and will be opening a U.S. location in the Houston, Texas area by September.

“We do a complete line of sealing products, along with moulded rubber products, plastics, ceramics and tungsten carbide parts,” says President, Jim Bond.

A major factor in Hi-Tech’s success has been its ability to source quality parts at affordable prices, and stock them ready for delivery. As an international seal distributor, Hi-Tech Seals uses both engineering and manufacturing resources worldwide. “What this means to customers is that we will seek the solution that works best for them,” Bond says.

Hi-Tech Seals works with industry-leading elastomer, plastic and seal technology developers, such as DuPont Performance Elastomers, Quadrant plastics and SKF Polyseal Inc., in order to connect customers

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with the most effective sealing solutions.

When customers work with Hi-Tech Seals, the company can develop sophisticated solutions for challenging applications.

To expand its services, Hi-Tech Seals developed elastomer and plastic machining capabilities. The company combines in-house drafting and machining capabilities to provide customers with quick turnaround on non-stock items (very important for customers, since unscheduled maintenance can cost companies thousands of dollars in lost production). Hi-Tech Seals can rapidly manufacture items that would normally take weeks to receive.

The company is registered under the ISO 9001 Quality Management System, which provides full product traceability from manufacturer to customer. This means that if an error is found Hi-Tech Seals can identify the cause and correct any issues.

“We support one of the best quality control programs in the marketplace, along with in-house engineering support and a full in-house training program for our staff,” Bond says. He notes that Hi-Tech Seals has a 99.94% shipping accuracy.

“Our procedures are understood at all levels of the company. We continually work to improve procedures and exceed ours and our customers’ expectations,” Bond adds.

Hi-Tech Seals began cast urethane manufacturing last year. Many companies producing specialized products in lower production runs experience high tooling cost on cast urethane products. Hi-Tech’s new expansion can help offset both the cost and wait time by manufacturing tooling in-house.

In April, Hi-Tech purchased an Edmonton gasket manufacturer, which has since been named Hi-Tech Gaskets Inc. Hi-Tech Seals can now provide waterjet cutting

capabilities up to 5' (60") x 135" in diameter, die cut round up to 48", die cut oblong up to 33" x 66", and hand cut up to 48". Hi-Tech Gaskets also supplies spiral-wound and ring-joint gaskets, and is moving toward adding in spiral-wound gasket manufacturing capabilities. With this recent addition Hi-Tech Seals is now looking to expand business further into plant and facility type applications.

In order to serve customers at the highest level, Hi-Tech Seals dedicates considerable efforts to staff training. “Our people are our big thing,” says Operations Manager, Brent Bortnick. “We invest a lot in our staff with in-house training and we get the right fit of people in to service the customer. We are always listening to our staff on how we could be doing things better and look at new approaches and improvements to progress as we grow.”

In all departments, each employee takes more than 50 product-training courses. These classes educate employees on parts identification, key product features, alternative products and materials. Hi-Tech Seals also supports external training programs for software, designations and beneficial courses to help employees advance.

Canadian owned and operated, Hi-Tech Seals has sales and distribution locations in Edmonton and Calgary, Alberta; Winnipeg, Manitoba; Newmarket, Ontario; Boucherville, Quebec; and they are opening a Conroe, Texas, location this fall.

“In the last five years we have become much more heavily involved in the international market, with customers in Asia, the Middle East, South America and Mexico,” Bond says. “We see a lot of growth coming from the international markets.”

FAST FACTS hi-tech seals inc. contact: Toll-Free: 1.800.661.6055 E: info@hitechseals.com

WEBSITE: www.hitechseals.com

www.hitechseals.com

ISO 9001 REGISTERED QMS

Don’t Stop Production for Unscheduled Maintenance!

It is key to have suppliers that understand your needs. Hi-Tech Seals has worked side-by-side with Alberta’s Oil & Gas industry for over twenty years. Hi-Tech Seals provides sealing application and industry experience.

To ensure quick delivery, Hi-Tech Seals stocks an inventory of over 22,000 unique parts. We offer a full line of Wireline and Blowout Preventer sealing components. Hi-Tech Seals supplies: • O-rings Made with Genuine Viton®

• Viton®, PTFE and Hytrel® Polyseals

• Back-Up Rings

• Compensation Membrane

• T-Seals

• Ceramic & PEEK Electrical

• O-ring Loaded U-cups

• Isolation Bushings

• Otis and Baker Vee Packing

• Snap Rings

• Door Seals • Large Bore Piston Seals • Inner and Outer BOP Seals • Stuffing Box Packing • Packoff Oil Savers • Elements

For all of your oilfield sealing needs, contact us at: 1.800.661.6055 To learn more about the products we offer, visit us online: www.hitechseals.com

Contact: Edmonton Office: 780.438.6055 Calgary Office: 403.720.2856

Company Profile

highland projects Highland Projects’ focus on a highly skilled, safe workforce delivers results for customers

F

or the last five years, Highland Projects has been working to set new standards in oilfield construction and maintenance, tank manufacturing and custom structural fabrication. From standard projects to complex custom jobs, its team of professionals will work with its clients until the job is complete.

“After working in the oil and gas industry across western Canada, we had a vision of creating a company of highly skilled, properly trained workers. Having an entrepreneurial spirit, we put our vision into action and we were certain that we could set a new standard in the industry,” says Josh Hillock, co-owner of Highland Projects along with Travis Yuzik and Jud Hillock. “That was five years ago and our vision remains the same today. Our daily mandate is quality before quantity, safety first, and developing long term relationships with our valued customers.”

In early 2007, Josh Hillock and Travis Yuzik chose Sundre, Alberta, to begin their business venture. Sundre is surrounded with both oil and gas activity, and is also located along Highway 22, a high-load corridor, making transportation easier and safer. In 2008 Jud Hillock joined the company bringing with him his knowledge of fabrication and sales to complete the team.

Within five years, Highland has grown from just five employees to well over 200 employees, including an expansion into the United States.

Headquartered at Sundre, Highland Projects is comprised of five divisions. Its

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Facility Construction and Maintenance division encompasses project management and plant construction. This part of the company constructs facilities from single well tie-ins to executing large plant expansions.

Highland’s Sundre fabrication shop has a total of 18,000 square feet and includes two divisions. Its Custom Structural Fabrication division custom designs specialized equipment. Its Tank Manufacturing division manufactures tanks, silos, shale bins, flock and premix tanks, manifolds and horizontal invert tanks.

Highland’s Sandblasting and Coatings division offers internal frac, acid and potable water lining as well as spray foam insulation and metal clad tank wrap.

In 2010, the purchase of a local metal building manufacturer added Highland’s fifth division. Highland Structures manufactures a diverse selection of steel-framed and self-supporting structural buildings.

In the fall of 2011, Highland Projects expanded into the United States by opening a 30,000 square-foot fabrication facility in Billings, Montana.

“Currently, we manufacture storage tanks, silos, frac pools and relevant equipment for the ever-growing U.S. oil boom,” says Hillock.

Already, the company has hired over 60 employees at the Montana location.

“We decided to expand into Montana for two reasons,” he explains. “First, it’s relatively close to the Bakken field in eastern

Montana and western North Dakota and the Niobrara shale gas play in eastern Colorado and south-eastern Wyoming. Secondly, because Alberta has been experiencing a shortage of workers for several years now we decided to tap into the abundance of skilled workers located in Montana.”

A focus on safety and quality are the cornerstones of Highland Projects’ success.

Highland’s team of Health and Safety Administrators and National Construction Safety Officers work together with its highly-trained quality control personnel to foster a safe and productive work environment.

The key to Highland’s successful growth?

“We don’t just plan for the future; we go out and create it,” says Hillock. “Knowing when we started that our number one challenge would be finding qualified personnel, we decided to build a system to train new employees. We find people who are interested in working within our organization and provide the necessary training, including assigning them a mentor. Developing skill though our mentoring program has been a huge success.”

With the ever-increasing demand for quality equipment, Highland Projects is currently looking at building its third fabrication facility.

Details will be posted on its web page soon.

“The new location may be in your area. We invite you to be a part of Highland’s growing future,” says Hillock.

FAST FACTS highland projects (main office) sales: Jud Hillock C: 403.638.9478 E: judh@highlandprojects.com

calgary sales: Holly Bennett C: 403.870.3030 E: hollyb@highlandprojects.com

WEBSITE:

www.highlandprojects.com P R O F I L E R M A G A Z I NE . C O M

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Company Profile

ics group inc.

Keep your frac fluids flowing—even in the most extreme conditions

“

We are a solutions provider. We listen, design and deliver,” says Wes Worobec, partner, Oil & Gas Energy Solutions with ICS Group, a Canadian company that provides Portable Climate Control for completions and production operations.

For over a decade, ICS Group has supplied Portable Climate Control to commercial construction, restoration and event industries. Over the past three years, the company has branched out to the oil and gas industry, offering frac fluid temperature control solutions.

“We have some pretty neat technology,” says Worobec. “The ICS Frac Fluid Temperature Control systems deliver precise, consistent temperature control for frac fluids in pits and above-ground tanks.

“And now, we’re putting the final touches on a circulation heating system [patentpending] which will enable the simultaneous heating of a 400-barrel tank farm. A very exciting time at ICS!” continues Worobec.

From the outset, the Research and Development team at ICS Group knew they could solve one of the key challenges that has dogged frac completions crews for years—maintaining frac fluid temperature once the heaters have left site. Currently, if that fluid loses too much heat before it gets used, the off-site heater must be called back (again) to reheat that same fluid. The resulting delays costing time, money and increased risk.

“The ICS solution stays on-site for the duration of the fracking operation, constantly maintaining fluid temperature,” Worobec says.

“Using the ICS heating system, customers

have full control of their fluid temperatures from start to finish. They don’t have to rely on anybody else.”

With every heating system ICS provides, 24/7 technical support is included— although most likely won’t be needed. ICS Group claims their solution is so simple and safe to run, an ICS staff-operator is not required on-site to control the equipment.

They simply set it up and leave it until their customer is done heating their frac fluids.

Remote monitoring alerts ICS to any operational issues.

Another challenge currently facing today’s oil and gas producers is the need to reduce their carbon footprint.

ICS Group’s Frac Fluid Heating solutions meet this challenge head-on. Fittingly, their systems operate much more efficiently than traditional heating equipment; the amount of waste energy is vastly reduced with the ICS solution. Worobec continues speaking, “Plus, we also offer tri-fuel flexibility. Our solutions can run on natural gas, propane or diesel in any location.”

A further green benefit of ICS’s Frac Fluid Heating solution is that it remains on-site the entire time. This reduction in the number of truck-trips to and from the well-site vastly reduces the transportation impacts felt by the environment. Less traffic equates to less ecological damage (and fewer injury accidents, too).

What does the future hold for ICS Group?

The future looks very bright, indeed. Currently, ICS is in the final stages of preparing its latest product innovation: collectively heating the frac fluid in a 400-barrel tank farm and maintaining the temperature for the duration of the job.

“We know this is a huge challenge for our completions customers,” says Worobec.

“Once we have the kinks ironed out with our new system, we expect our phones to really start ringing. Our clients are very keen about its potential. ” In addition to Frac Fluid Heating Services, ICS can also provide long distance water-line freeze prevention, keeping pipes and valves from freezing by wrapping them with hoses or

their Climate Change Tarp System. “We can do one or two kilometres, easy,” Worobec says. ICS also provides air heat to prevent the freezing of hoardings and buildings.

Frac Fluid Temperature Control from ICS • Precise, reliable temperature management ensures consistent up-time and service.

ICS Group’s innovative solution will keep your frac fluid at a steady temperature and always frac-ready.

Prevent On-Site Delays • No need to bring back the off-site heaters back to reheat.

• Built-in redundancies mitigate any risks associated with equipment failures.

Cost Savings • Simple, safe system set-up eliminates the need for a dedicated, on-site technician.

Reduced Carbon Footprint Fuel Flexibility • ICS systems convert fuel to output British thermal units more efficiently than other heaters.

• ICS’s systems operate on diesel, propane or natural gas.

Proven Reliability and Responsive Service • ICS backs up its equipment with a 10-year track record and 24/7 technical service.

• Remote monitoring capability provides notification of any system interruptions.

• Frac Site Heating Applications from ICS • In-ground pits and ponds.

• Above-ground C-ring tanks.

• 400-barrel tanks; including fire, water and tanks farms.

• Freeze protection for water supply lines, valves, pumps and instruments.

• Air heat for hoardings and buildings.

To help customers learn more about ICS Group’s Frac Fluid Heating services and the processes involved, ICS offers “Lunch and Learn” technical seminars, at no charge.

Please call for details.

FAST FACTS ics group inc. ics’s frac fluid heating division: Toll-Free: 1.866.247.4460 E: frac@icsgroup.ca

WEBSITE: www.icsgroup.ca 76

June 2012

We Just Changed the Whole FraCking World Simultaneously heat an entire tank farm. Maintain frac fluid temperature. Eliminate scheduling risks. Call us June 1, 2012 to schedule a private demonstration of this game-changing technology.

1-866-247-4460 www.icsgroup.ca Calgary • EdMonton • fort MCMurray • winnipEg

Company Profile

IHS ENERGY (CANADA) LTD. Innovation through transformation

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n 2012, oil prices are expected to average well above historical annual prices, an outlook driven by thinner OPEC spare capacity, modest non-OPEC supply growth and rising industry costs. The revival of oil production in North America—particularly from tight and shale oil resources—reflects the resilience of oil producers and the key role that technological advances will play in the future of the global oil supply. Natural gas outlooks continue to vary regionally based on local supply and demand, with demand growth being driven primarily by emerging markets.

In today’s difficult global energy markets, IHS is uniquely positioned to provide our customers with the tools they need to understand, manage and mitigate risks, increase productivity and maximize opportunity. The broad IHS product offering for energy companies includes insight, information and software products to assist in all stages of decision-making at all levels inside our customer accounts.

All too often, geologists, petroleum engineers and other technical professionals waste time juggling data and analytical tools as they identify opportunities and areas of interest, make drilling plans, evaluate results and make decisions. They need to work more quickly, using integrated information and software solutions that support streamlined, efficient workflows.

But they aren’t the only energy professionals who make critical decisions. Business development managers, investors, exploration managers and executives require strategic decision-making support, expert advice and accurate insight as they work to drive long-term priorities and evaluate development opportunities.

IHS leads the industry by providing integrated and efficient workflows across the oil and gas value chain, focused on improving productivity, increasing ­c ollabo­r ation and driving improved decision-making.

Integrated energy workflow support To support our customers as they work through processes from concept to

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completion, our long-term strategy is to acquire and develop market-leading solutions to complete our offering across the oil and gas value chain, and integrate those solutions with IHS software and information to simplify and streamline workflows.

For example, the integration of IHS Kingdom (a product we added to our portfolio after the recent acquisition of Seismic Micro-Technology, also known as SMT) with IHS information creates a streamlined workflow that reduces data loading tasks and increases the accuracy of project data.

Because seamless access to information is key to exploration and development workflows, we’ve focused on making it easier for our customers to connect to that data, helping them quickly make the right decisions for their organizations.

SMT is only one of the acquisitions we’ve made in recent years that has helped strengthen our workflow and decision-making support.

Other impressive assets we’ve added to our portfolio of energy offerings include offshore energy industry information (ODS-Petrodata), energy advisory and market research services (Purvin & Gertz), digital oil and gas pipeline information (Hild Technology), energy company and transaction research services (John S. Herold, Inc.), and well log information management software (LogTech Canada).

At the same time, we’ve been focusing on continually enhancing our products to make them even easier to use. For example, we’ve invested significantly in improving our trusted mapping tool IHS AccuMap® to improve performance time, increase user flexibility and expand its functionality. Many of the changes we’ve made were derived from user requests and feedback.

Geoscience professionals aren’t the only ones benefiting from our emphasis on connectivity. We’ve also integrated our vast array of energy industry knowledge products through our new online platform, IHS Connect™ Oil & Gas. Connect provides a single access point to IHS information and insight in a simple-to-use browser interface.

Customers can access industry analysis, in-depth market research, technical information and economic forecasts all in one place.

A vast array of high-quality information available from a single vendor Geological records for over 4 million wells.

Production data for 90% of the global oil and gas market. Up-to-date details on energy industry activity in over 230 countries. Data on current and future seismic, drilling and development activities in more than 335 hydrocarbon producing regions. These are just a few examples of the range and depth of the information we offer.

But it’s not just the sheer volume of information we offer that differentiates us from our competitors. It’s also the quality of our information. We take raw data collected from an extensive array of sources and transform it into quality information that is correct, current, consistent and complete. In doing so, we provide an unprecedented amount of data quality assurance, offering value-added services to the information our customers use.

That means that customers can be assured we have the information they need—and the information quality their work requires.

Learn more about the transformation After more than 50 years of providing critical energy knowledge and analytical tools, we continue to grow and change. In essence, we’re transforming our company to help our customers transform how they work. But transformation doesn’t happen overnight. It’s a continual process, one that requires focus and dedication. To keep track of our transformation journey, visit the website we’ve set up to document our progress at ihs.com/transformation.

FAST FACTS IHS energy (canada) ltd.

T: 403.770.4646 E: sales.cdn@ihs.com

WEBSITE: ihs.com/transformation

C O N T I N U A L T R A N S F O R M AT I O N L E A D S T O C O N S TA N T I N N O VAT I O N .

GEOSCIENCE SOFTWARE M A P P I N G A N D A N A LY S I S INDUSTRY INSIGHT

IHS is invested in the success of Canada’s energy industry. We maintain an open dialogue with our customers, and as a result we are launching a new IHS AccuMap® map and user interface and have delivered workflow integration between IHS Petra® and IHS Kingdom®.

We have also provided transparency and quality information, and created solutions for better access to global resources.

Today more than ever, partnering with IHS can make the difference between average performance and operational excellence.

Begin your transformation today. Visit IHS at GeoConvention 2012, booth 522. ihs.com/transform

Company Profile

infratech corporation World class in every way

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nfratech, a customer-focused Whitecourt, Alberta, company founded in 1987, provides world-class combustion process and incineration-related products and specialized technical services to a global client base.

Infratech manufactures its products to exacting specifications, creating application-specific incinerator designs and cost-efficient, environmentally sensitive combustion solutions for solid, liquid and gas waste applications. The company provides a variety of incinerator configurations, plus state-of-the-art infrared imaging and thermographic consulting services, including industry-leading infrared gas-leak detection services.

Infratech is an ISO 9001:2008 Certified company, which provides products and services for customers across Canada and worldwide, with orders going to Russia, Japan, Kazakhstan, the Middle East, Africa, Mexico, Venezuela, the Caribbean and the United States.

For the Canadian oil and gas industry, Infratech’s Whitecourt base is a central location to serve customers effectively.

“Within a 4.5 hour radius of Whitecourt, we can be in places like Cold Lake, Fort McMurray, Fort St. John, Calgary and everywhere in between,” explains Infratech vice-president Dan Guenette.

Incineration Equipment Design & Manufacture Whether for a gas waste stream in Alberta, camp waste on a drilling platform in Russia or pathological waste in Mexico, all Infratech incinerators are designed to the client’s specific application, minimizing auxiliary fuel-use requirements, reducing emissions and optimizing the combustion process. “We don’t provide a generic solution, and therefore our equipment is more efficient,” Guenette says.

All of Infratech’s incinerators are manufactured to meet the most stringent codes and specifications, using leading-edge and best-available technologies. The standard incinerator package includes PLC technology, allowing for fully automated operation. The control philosophy can be tailored to suit the required process and always includes all required safety systems and devices.

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Fugitive Emission Management Services Infratech provides full turn-key fugitive emission management services for its clients, with documentation that meets or exceeds legislative requirements in both Alberta and British Columbia, and fully prepares the client

Other Services Infratech also provides contact operators and technical personnel to the industry, with a focus on high-quality individuals with an emphasis on ongoing industry training. In addition, they have in-house engineering and drafting to supplement their designs and fabrication, and therefore also provide drafting and design services to clients.

for any regulatory audit that might occur. “We are a leader in fugitive emission management services in western Canada,” Guenette says.

The leading-edge GasFindIR camera that Infratech uses is an infrared imaging camera that acts as a portable inspection system to detect gas leaks quickly and easily.

Infratech’s certified technicians can scan large areas of equipment throughout a facility and identify gas leaks with pinpoint accuracy.

The portable Hi Flow Sampler allows Infratech’s technicians to accurately measure gas-leak rates. With gas-leak quantification, a complete, economical analysis will determine the payback period of each leak, and assist in planning maintenance and repairs.

Infrared Inspection Services Infratech has been providing specialized infrared inspection services to industry in Canada since 1987. It was the company’s main focus when it was founded and something they still take a lot of pride in doing well. They specialize in electrical, heat loss/refractory condition, and refinery and gas-plant production furnace tube coil inspections. The production furnace tube coil inspection application is the most demanding and challenging for the equipment and the technician, as the technician scans and reports tube surface temperatures of the tube coil while the furnace is operating under normal loads. No shutdown is required for this inspection. “It provides the client with essential predictive maintenance information as to how the furnace is actually operating, and what upcoming maintenance or operational changes may be required to keep the furnace running in its optimal range. Over the years, we’ve perfected this service and are considered the leaders in Canada, completing services at gas plants and refineries across Canada.”

A Relentless Focus on Quality “We’ve got what we would consider to be absolutely top-notch staff,” Guenette says, as he describes the company’s approximately 40 workers. “They take ownership in what they do, and care about the client and about the outcome of the service or product. The other thing is the direction the company has always taken—striving for the best-quality product or service in the industry. We are not really interested in being second best at anything.

We put a lot of extra effort into making sure we can provide the client with the best service, the best results and the best product at the end of the day, period.”

These are just a few of the reasons that Infratech has realized consistent growth and stability year after year. “We’ve been able to do that because of our focus on the client,” Guenette says. Infratech is planning on maintaining their existing client base with quality services and products, and looking forward to exciting new challenges as their services and product ranges continue to expand to meet the needs of changing markets.

FAST FACTS infratech corporation PRESIDENT/FOUNDER: Don Guenette, President; Dan Guenette, Vice-President

YEAR INCEPTED: 1987 NUMBER OF EMPLOYEES: 40 BUSINESS CATEGORIES: Incinera-

tion equipment design and fabrication, infrared inspections, fugitive emission management, fired equipment service, contract operators

ADDRESS: 3415 35 Avenue,

PO Box 2099, Whitecourt, AB

toll-free: 1.888.377.5432 p: 780.778.4226 WEBSITE: www.infratech.cc P R O F I L E R M A G A Z I NE . C O M

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Company Profile

Integrated Protective Coatings Inc. The gold standard for electroless nickel and polymer coatings

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ntegrated Protective Coatings Inc. (IPC) is an industry leader in the application of high-performance, proprietary supernickel-alloy and polymer coatings. Based in Edmonton, Alberta, IPC has over 30 years of experience serving the oil and gas industry with a primary focus on oil.

The company offers a comprehensive line of high-performance proprietary electroless nickel and polymer coatings to suit specific needs and environments. IPC coatings provide high-quality, cost-effective solutions for corrosion, erosion and wear problems.

IPC coatings are designed to meet specific needs and environments. “Our technical advisors will evaluate your needs and suggest the correct coating to ensure your parts are coated with the best choice of coating,” says Bob Franke, president of IPC. IPC has developed several proprietary processes, which provide over 10 times the amount of coating-to-substrate adhesion typical of these types of coatings.

Both overseas and North American clients know they can depend on the quality and standards of IPC products. The company follows a strict quality standard that is ISO 9000–2008 certified. Each part that is introduced into the production stream is tracked and quality-checked at every step in the coating process. “This is to ensure a product that meets or exceeds our customers’ expectations. Q&A auditors are present at every step through production and must sign off before the parts enter the next stage of the process,” says Franke.

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The quality control at IPC is rigorous. Upon completion, the auditors perform a final series of tests to ensure correct substrate adhesion, correct coating thickness and uniform distribution of coating. Also, a visual inspection is done. IPC can also perform additional QA tests if requested. Only after IPC’s quality department has signed off the parts may they be shipped.

Given the importance attached to quality assurance, it is no surprise that management views people as a key factor in the IPC equation. “All employees are encouraged to share ideas on how to improve safety, quality and customer service. Our teams regularly meet to ensure that our workflow is optimal and that customer service is the best it can be,” says Franke.

Besides being an ISO 9000–2008 certified company with a quality management system, IPC is also a COR-safety certified company with plans to be ISO

14001 certified for environmental safety by the fall of 2012.

To ensure the highest standards of environmental practice and safety, the company has a zero-discharge policy and employees perform regular drills so that everyone is aware of procedures for an emergency situation.

IPC also has facilities in Tianjin, China, to meet a growing global demand for IPC’s proven high-performance coating solutions that will perform in the harshest, most extreme environments.

The IPC company slogan is, ‘Proven Solutions—Extreme Performance.’ This is achieved by providing an accurate technical assessment to determine which IPC product will give you the best protection for your environment, and then providing a quality product in a timely manner at a fair price. Our core values are “Do it right, on time, the first time, every time,”—that’s how we exceed our customers’ expectations.

“All employees are encouraged to share ideas on how to improve safety, quality and customer service. Our teams regularly meet to ensure that our workflow is optimal and that customer service is the best it can be.”

— Bob Franke, president, Integrated Protective Coatings Inc.

FAST FACTS Integrated Protective Coatings Inc. PRESIDENT: Bob Franke bobf@ipccoatings.com

VICE-PRESIDENT, CUSTOMER SERVICE: Mark Pye markp@ipccoatings.com

MANAGER, BUSINESS DEVELOPMENT: Chris Bianchi cbianchi@ipccoatings.com

Toll-Free: 1.800.856.4959 E: sales@IPCoatings.com

WEBSITE: www.ipccoatings.com

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Company Profile

ivis inc.

Alberta’s premier sewer service company

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VIS Inc. is Alberta’s premier sewer service company. The company provides underground infrastructure solutions to commercial, industrial, municipal, and residential customers. The company differentiates itself from its competitors by providing a “one stop shop” to its customers for their underground infrastructure problems.

Dolores Eaton, president of IVIS, says, “Early on, customers would ask if we would be able to conduct services that they required after we had already provided one service to them. We tried to hire contractors to provide these other services to them but the contractors’ timelines didn’t coincide with our timelines. That’s when we decided to make sure we had the equipment to provide all of the services that our customers required and provide a ‘one stop shop’ for them.”

After working in the service industry for 24 years, Eaton began IVIS in 1996. Eaton started IVIS on a part-time basis, not realizing the potential of the business to be full-time.

“At the beginning, several people encouraged me to try different avenues, which provided

me with insight into other services that would be of value to my customers. Eventually, IVIS became a full-time business and it hasn’t stopped growing since.”

IVIS provides several types of sewer services. IVIS’ sewer and utility services include residential closed-circuit television (CCTV) inspections; line flushing and cleaning; root removal and augering and snaking; and secondary utility locating—this includes locating utilities that are past the meter, or from the transformer to the building for power, and locating light standards, car plug-ins, and pipelines. IVIS can also locate sanitary and storm sewer lines on public and private property from manhole to manhole through CCTV and Sonde locating techniques, or with a flusher truck and Sonde.

IVIS’ team of Pipe Assessment Certification Program (PACP) certified technicians inspect CCTV lines from residential 1.25-inch lines up to large diameter pipes; for new and existing sanitary and storm lines; and LAMP CCTV work, which is inspecting the main line up to the lateral line to the residence. IVIS has

other CCTV equipment for hard-to-get-to places that can be transported on a four-wheeler.

IVIS has a large fleet of custom-built Vac-Con® Combo units which can conduct high pressure flushing. The units can jet 55–100 gallons per minute of water at 2000–3000 pounds per square inch. IVIS’ flushing services are appropriate for problems or maintenance issues, as well as cleaning existing lines and new construction. IVIS also has service trucks that are able to flush residential and commercial lines between 0.5- to 6-inch lines. The company’s technicians can also thaw frozen water lines inside residences.

For hydro excavating services, IVIS’ service trucks use water and vacuums to expose utilities and cleanup around manholes, water lines, and sewer lines. The trucks have a boiler to thaw ground in the winter and also to steam catch basins in the spring to clear frozen lines.

IVIS provides trenchless sewer and pipe rehabilitation using cured-in-place pipe (CIPP) technology, which can be used in water,

Below: CCTV Van

Above: Lining of Sewer Line Manhole to Manhole

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Above: Service CCTV

Wet-out Facility

sewer, manhole, culvert, and chemical pipelines. The company can rehabilitate pipes ranging from 3 to 120 inches in diameter and can reline main and lateral line connections.

Services are fully functional within a few hours compared to days with other rehabilitative techniques. CIPP offers a cost-effective solution for sewer line and manhole replacement compared to conventional dig and replace techniques.

“As a company, we are committed to quality. Therefore, we don’t take on every project unless we can guarantee our customers that we can provide a high level of service to them,” says Eaton.

Already in operation for 15 years, IVIS is located in Edmonton, Alberta, and has 40+ staff and is still growing. Eaton says, “IVIS is a forward thinking company and takes pride in our excellent customer service.”

Manhole Lining

Below: High-rail Hydro-vac Truck

FAST FACTS IVIS inc. address: 16908 – 128A Avenue Edmonton, AB T5V 1K7

contact: T: 780.476.2626 F: 780.475.4801 Toll-Free: 1.866.976.2626 65 ft. Lined Manhole

E: service@ivisinc.com

WEBSITE: www.ivisinc.com

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Company Profile

Kudu Industries Innovation, service make KUDU global leader in progressive cavity pump solutions

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UDU Industries is dedicated to making its customers successful. “We are truly customer-focused, and the attitude and motto here is ‘Get ‘er done,’” says KUDU Chief Operating Officer Alex Damnjanovic, P.Eng. KUDU Industries, which provides Progressing Cavity Pump (PCP) solutions to the oil and gas industry, was founded in Alberta more than 20 years ago. From the very beginning, the company’s can-do attitude has centered around how this Calgaryheadquartered company can serve its customers better. When KUDU was established, it was one of the first to recognize the application of PCPs in heavy oil. “It was one of the original companies that really revolutionized heavy oil production through the use of a progressing cavity pump,” Damnjanovic says.

PCPs can also be applied outside of heavy oil. Emerging areas include everything from coalbed methane, to light oil and thermal applications—markets that KUDU is actively pursuing, in Canada and abroad.

What also sets KUDU apart is its intense focus on meeting customer needs. “For example, we recognized that we needed to be close to our customers, so our service centres are located out in the field, with over a dozen service centres throughout Saskatchewan and Alberta and another 15 internationally. We are located where our customers do business, and equipped with the products and services that customers need in order to be successful.”

At the same time, KUDU recognized that customers want timely delivery. To meet this need, KUDU introduced lean manufacturing, where the entire process is focused on getting the right products out to the customer at the right time.

KUDU’s culture also speaks to the company’s attitude of getting it done safely.

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“That’s the challenge in a growing market like the oil and gas industry, where people and resources are at times difficult to get. You always have to focus on doing things safely,” Damnjanovic says. “Our culture speaks well to our values of respect, creativity and safety.”

KUDU continually seeks to introduce innovative new products and technologies, to help customers be more successful with their production and improve their environmental footprint.

“One of the things that customers have recognized us for is our ability to innovate,” Damnjanovic says. “KUDU is a leader in bringing new technologies and innovation to the oil and gas industry.”

The company’s innovations include product automation, such as its optimization pump off controller (POC). In downhole pump completions, a KUDU Top Tag improves inflow into the pump. KUDU is also innovative in its ability to enter new areas, such as light oil and high temperature environments.

“Innovation is something that we’re constantly doing. We have a team that’s dedicated to putting out new products in conjunction with our customers—all with the end goal of meeting customer needs.”

Over the years, KUDU has received many awards for its contributions to the energy industry. Two of the most recent are 2011 Exporter of the Year and 2011 Oil and Gas Manufacturer of the Year—both honours which were awarded by the Alberta government.

Another accolade came when KUDU was profiled in a new KPMG book, That’ll Never Work—Business Lessons from Successful Canadian Entrepreneurs.

KUDU views the oil and gas industry “with a lot of pride,” Damnjanovic says. “We are very proud to be a part of this industry, and our people are very proud to be a part of this

industry. We are very much a part of the community because this is where the action happens, in communities throughout Canada and all of our international locations. The success of our company, and of the industry, is focused on the success of the community.”

Because of this, community involvement is very important to KUDU, which provides considerable support to the local areas it’s active in.

“We’re here for the long haul and we’re growing. And what gets us up in the morning is that we love serving our customers,” Damnjanovic says. “We love being in this industry—it’s an exciting place to be. Alberta and Saskatchewan are great environments for the oil and gas industry. They really support this industry and it’s a great place to innovate; we are very proud and privileged to be a part of that. At KUDU, people work extremely hard, and they do it for a reason.” Many times, customers will call with an urgent request on a weekend or on Friday at 5 p.m.—and KUDU’s staff respond quickly in order to meet the customer’s needs.

These are some of the reasons that KUDU has been growing both in Canada and internationally. Exciting areas of significant growth for KUDU include the U.S., Kazakhstan, Australia, Romania, Oman, Kuwait and just recently, Russia, which is a new market for KUDU. “We are here to stay and we are here to make our customers successful,” Damnjanovic says. “We see the future as being very bright.

The oil and gas industry is terrific, both in Canada and worldwide…. And next time you are travelling around the globe, don’t be surprised to see a KUDU Service Centre nearby.”

FAST FACTS KUDU INDUSTRIES marketing manager: Jennifer McMurtry T: 403.203.9896

WEBSITE: www.kudupump.com

At Your Service Helping you get the most from your well is KUDU’s top priority. Whether the concern is production, efficiency, troubleshooting or training; partnering with KUDU gets results. KUDU’s Progressing Cavity Pump technical specialists ensure you get the best fit by providing a custom well plan along with onsite maintenance and support.

Check out the technical article, Using Progressing Cavity Pump automation for sand and inflow issues, written in conjunction with Penn West Exploration.

Visit kudupump.com.

Alberta Exporter of the Year and Oil & Gas Manufacturer Awards.

Calgary Manufacturing Industry’s Best Employer for Medium Sized Manufacturers.

Bringing Solutions to Surface

Company Profile

meridian Driving valve value

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ounded in 1979, Meridian continues to lay claim to being Canada’s premier distributor of valves and valve actuation.

Valves at the Core “Our core, and what truly differentiates Meridian from its competitors, is our focus on developing the most knowledgeable valve team in the industry,” says Bryn Murray, Meridian’s General Manager. Meridian’s platform as a problem-solver and solutionprovider comes from its culture of continuously improving its understanding of products and processes.

Industry-Leading Inventory To back up its technical expertise, Meridian stocks an industry-leading inventory of valves and valve actuation products in a branch network that spans across Canada.

Meridian’s customers benefit from quick access to a large stock of industry-specific products in a wide selection of leading brands including Velan, Neway, Score TricentricTM, DFT, Valvitalia, OMB, Enflow, FNW, and MeridianTM. Although Meridian has developed expertise in many sectors—including metals and mining, power and utilities, chemical, petrochemical and refining, as well as pulp and paper—its primary focus is in Canada’s oil and gas industries, conventional and unconventional. Focused on valves, Meridian consistently serves its customers in tough applications including high temperatures and/or high pressures;

corrosives and/or abrasives; sour; large diameter; high-pressure steam and hot water; slurry; molten sulphur; tail and acid gas; back pressure/water hammer; control; pump and compressor discharge; pipeline pigging; cryogenic; and the injection of salt water, CO2, or acid gas.

specification, training, procurement, and materials management, as well as logistics and supply. Meridian drives improvements across the entire project lifecycle through dedicated quotations, management, and facilitation teams. The goal is a robust and effective major project solution.

Major Project Focus Meridian’s major project teams provide peace of mind through turn-key solutions that offer customers economical and timely supply of material for large capital projects. Working closely with both the end users and engineering teams, Meridian creates value in valve

Value from the Core At the end of the day, according to Murray, it comes down to “continuously improving Meridian’s offering technically, logistically, and commercially to give our customers the right product, at the right price, at the right time.”

FAST FACTS meridian corporate office: 3780 - 98 Street NW Edmonton, AB T6E 6B4 P: 780.468.7161 F: 780.469.6407 Toll-Free: 1.800.661.6997 E: edmonton@meridianvalve.ca

WEBSITE: www.meridianvalve.ca

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Company Profile

meridian manufacturing Growing to meet industry demand Construction is currently underway at Meridian’s Manitoba location to expand manufacturing capabilities and add new heavy duty production lines.

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eridian Manufacturing Group has been building high quality storage and handling products since 1965. With operations across North America, the company has five facilities—Lethbridge and Camrose, Alta., Winkler, Man., Storm Lake, Iowa, with a laser cutting facility in Burlington, Ont.—that manufacture a wide range of oil tanks, fuel tanks and frac sand silos.

A member of the WGI Westman Group of companies, one of Canada’s 50 Best Managed Companies, Meridian focuses on quality, new technologies and innovation. In 2006, Meridian began manufacturing 400BBL tanks. These tanks feature a superior baked-on, powder coat finish.

Meridian’s exclusive powder chemistry outperforms standard paints, offering durable weather protection and superior corrosion resistance.

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Since then, Meridian has developed a complete line of ULC-approved double wall fuel tanks, to meet a growing demand for environmentally friendly fuel tanks. Meridian manufactures over 12 different models of double wall fuel tanks, from 2,300 to 61,000 litres in single and split tanks to meet a wide range of applications. Meridian also supplies fully equipped tanks with high volume pumps, longer and larger Arctic hose, hose retractors and tank level indicators.

Meridian’s product offering includes: 400, 750 and 1,000BBL Tanks Available with the following options: skids interior chemical-resistant liners, urethane foam insulated and metal cladded exterior.

100 Cube Horizontal Double Wall Invert Drilling Fluid Tanks The secondary tank, which fully contains the primary tank, eliminates the need for containment berms, therefore minimizing the footprint on location at the drilling rig.

Frac Sand Hopper Silos The typical storage range for Meridian’s silos is up to 326 metric tonnes, with options for larger sizes, and in multiple variations of diameter and height. Benefits of Meridian frac silos include: designed to customer specifications, industry-leading safety packages, silo monitoring equipment and discharge packages available, and portability.

Custom-Built Tanks/Flare Tanks and Rig Mud Tanks Meridian’s engineering and drafting department works closely with

customers to produce custom designs in 3D. “One of the benefits of a company our size is those drawings are all put into a vault, so that we can manufacture a custom design at any of our manufacturing facilities,” says Meridian’s Oil and Gas Manager, Ken Pierson.

Expanding Manufacturing Facilities Seeing the growth potential in the industry, Meridian recently purchased an additional facility in Lethbridge, which they have dedicated to the production of 2,300 to 10,000 litre tanks. The Winkler facility is also expanding to include several new heavy duty production lines—giving Meridian the ability to build larger tanks. The company is also looking at manufacturing 400BBL tanks out of its Storm Lake facility and an expansion is planned for the Camrose facility in the near future.

“One of the things that has led to Meridian success in the oil and gas industry is the number of manufacturing facilities we have strategically located across Western Canada,” says Pierson. “Having different production facilities allows us to shift production from one location to another in order to supply the tanks in the time frame that is required by the customer. Plus, customers don’t have to worry about where the tanks are built; we give them one price no matter where the product is built.

“All of these changes are positioning Meridian to be able to supply more oil tanks into an industry that is constantly growing,” Pierson comments. “We look forward to working with the industry and learning in the field so we can continue to improve and refine the design of our oilfield or custombuilt tanks.”

FAST FACTS meridian manufacturing group oil/gas manager: Ken Pierson T: 1.800.661.1436 E: kpierson@meridianmfg.com

WEBSITE: www.meridianmfg.com

strength

Company Profile

myshak sales and rentals ltd.

Taking care of all your bare rental needs

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yshak Sales & Rentals Ltd. is committed to making a difference for its customers, its employees and the communities it operates in.

Myshak Sales & Rentals is a full service equipment rental company offering crane and specialized equipment rental and sales to the oil and gas and construction industries. Based in Acheson, just 15 minutes west of Edmonton, Myshak Sales & Rentals also provides storage and warehousing with a full complement of materials handling, tracking, shipping, storage and warehousing of large and small assets for a wide range of projects.

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One of western Canada’s largest producers of crane and swamp mats, with nearly 25 years of experience in manufacturing mats for local industry, Myshak Sales & Rentals also specializes in the manufacturing, rental and sale of matting, including crane mats, swamp mats, rig mats and interlocking mats. The company uses premium raw timber from B.C. to manufacture its mats, which it builds at its Acheson facility.

In addition, Myshak Crane & Rigging Ltd. offers a full service crane and rigging business, supplying everything from engineering to placement of equipment and products up to a 660-ton capacity.

The Myshak Group of companies is family- and employee-owned and 100 per cent Alberta owned. Company founder Mike Myshak has been involved in the business since the early 1960s. “Our reputation and integrity are paramount for our company,” says Myshak Sales & Rentals Vice President and General Manager, Corey Mitchell. “We’ve been touching local communities and industry dating as far back as 1964.”

The Myshak Group is committed to improvement through continuous investment in equipment and in its employees. “We are incredibly committed to safety and to our employees and their families. Our people are

truly what makes the business—they are the big reason why we do what we do.”

The company is highly involved in the local communities in which it operates—Red Deer, Bonnyville, Fort McMurray and the Edmonton area. “We try to ensure we help them develop and participate,” Mitchell says. “For us, it’s very important that we give back to the communities that give to us.”

Organizations sponsored by Myshak Sales & Rentals include the Stollery Children’s Hospital, Cross Cancer Institute, NAIT, several schools and amateur and professional sports teams.

FAST FACTS myshak sales and rentals ltd.

FOUNDER: Mike Myshak Toll-Free: 1.866.960.9255 E: rentals@myshaksales.com

WEBSITE: www.myshaksales.com

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Company Profile

ncs oilfield services Multistage Unlimited™ Leave nothing behind NCS Frac Sleeve components await assembly. Custom-built components allow NCS to meet specialized customer needs with speed and agility.

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CS Oilfield Services prides itself on helping operators realize the goal that has become the company’s mantra: “Leave Nothing Behind.”

“When we finish with the wellbore, it’s open, unobstructed and ready for production,” says NCS Sales Manager, Eric Schmelzl, P.Eng. “Perhaps more importantly, by placing the stimulation treatments precisely where operators want them, they can be assured of recovering the full potential of the asset and leave nothing behind when they are done.”

NCS Oilfield Services began working in western Canada in 2008 with a unique downhole tool that allowed operators to perforate and fracture multiple stages in a single trip.

With the evolution of horizontal wellbores, NCS successfully refined their BHA and jetting processes, so that operators could continue to apply abrasive cutting for reservoir access in the horizontal well environment. Today, although the jet-cutting method is still widely used, frac equipment shortages and rising costs mean that accelerating the speed at which operators execute their treatments is of paramount importance. This brought about the introduction of NCS Multistage UnlimitedTM frac sleeves, which have allowed operators to accelerate the speed with which they can complete their stimulation treatments. NCS frac sleeves eliminate the need to employ

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abrasive cutting, saving on both time and fluid requirements, while retaining the option to jet-cut whenever desired. Studies NCS has done to date show that its multistage frac sleeve stimulation method results in higher production rates when compared to other non-pinpoint stimulation techniques.

“Wells are getting longer and hotter—some of these horizontal wells are getting to be two miles long, so our technology is focused on being able to get tools down to those depths, and be able to effectively place fractures,” says NCS Oilfield Services Chief Technology Officer, Don Getzlaf, P.Eng. “Our motto has always been ‘Leave nothing behind,’ which requires optimizing wellbore performance over its entire life—that’s always been our goal. We leave the wellbore full diameter, so that at any time in the future, operators can go in there and if there is bypassed pay, it can be isolated and restimulated. Maintaining the capability to manage the asset over its entire life has always been one of our primary system design goals.”

From a technical standpoint, NCS does a great deal of custom design work. “If customers want something specific, we’ll listen to their concerns and be able to design the tool or part that meets those concerns,” Getzlaf says. “We are very quick and very

responsive. When we designed the frac sleeves, we went from a napkin sketch to first deployment in just 59 days. That’s a remarkably fast response to meet a customer need.”

NCS technology also allows customers to re-perforate between existing producing intervals and re-stimulate, or potentially squeeze off existing intervals as needed. “It gives operators far more options to manage the wellbore and the reservoir,” Getzlaf says.

Industry is being tasked to lower costs by doing more work in less time and to use fewer resources in accomplishing that goal. To that end, NCS recently introduced the HalfStraddleTM system: a marriage between frac sleeves and fracturing through coil. The technique results in a significant reduction in the amount of fluids required to execute a multistage stimulation program, in some cases by up to 50%. The challenge was to develop a method that would allow quick transition from fracturing down the inside of the coiled tubing, to jetting down the CTU, then back to fracturing again. The NCS Half StraddleTM BHA allows the use of the jet cutter whenever required, and then quickly return to fracturing operations.

“The exciting thing is that even though we use significantly less water, the formation receives exactly the same frac treatment as before without compromising on the job design,” Schmelzl says. “With reduced fluid

volumes, there is a reduction of costly frac chemicals, and it also reduces the amount of time the frac crew is on location. The Half-StraddleTM method often allows the annulus to remain entirely free of sand, which in the long run reduces both operational risk and costs.

“Our clients are very excited by the fact they require less fluid to haul, less fluid to heat, less tankage and fewer chemicals on location,” Schmelzl says, noting there is also less fluid to dispose of after the frac treatment is completed. “We are especially pleased by reducing the amount of time required to perform the frac treatments. When we can do that, we are improving every aspect of the total well completion costs.”

Cost reductions and environmental benefits aside, one of the most important factors in any completion methodology is the assurance that reserves are not bypassed. The frac stage spacing needs to be uniformly draining the reservoir, so that all portions of the reservoir are in approximately the same stage of depletion when the well’s economic limit is reached. The flexibility of placing frac stages anywhere in the wellbore is retained by including the abrasive-jet cutter, even on wells where sleeves are installed.

NCS was the first to develop a BHA that’s tolerant enough in a high-sand environment to

allow this style of multistage fracturing. Since 2009, NCS’s Mongoose BHA has performed more than 26,000 frac treatments across western Canada. NCS Oilfield Services is continually refining and modifying the BHA design and components, with the goal of enhancing the number of stages that can be achieved on a single trip and extending the service to deeper, hotter well environments. To date, the company has completed more than 40 stages on one trip into a wellbore, and successfully placed fracs at over 4800m TMD. Its largest treatment to date has been 2.1 million pounds of proppant placed on a single trip into the wellbore, and the boundaries of the method are being extended continuously as new BHA refinements and techniques are deployed.

Operators are realizing that the long-term viability of their investment is enhanced by having a cemented wellbore. “We believe the open hole methodologies have good application in highly-fractured, dendritic formations, and our sleeve methodology is applicable in those reservoirs as well,” Schmelzl says. “In reservoirs that generate simple, planar fractures, we continue to see operators leaving behind the old plug-and-perf and cluster-perf methods in favour of pinpoint stimulation methods that guarantee the placement of a known number of fractures, in specific, predetermined locations. The proof is in the

production—not just initial production rates, but the total recovered reserves over the life of the well.”

All NCS staff bring an extensive background in hydraulic fracturing, coiled tubing and downhole tools to the job, with more than 125 years of combined experience among senior management. “We bring to the table unique solutions to customer challenges. We have the expertise; we move quickly and deal with our clients with a ‘small-company’ feel, which is an environment we treasure.”

Looking forward, one of NCS’s goals is to continue expanding globally. The company continues to support operations in Australia and China, and is actively expanding into Mexico and South America.

FAST FACTS ncs oilfield services Over 30,000 frac stages pumped 56 Employees Offices in Calgary, Alta., and Houston, Tx.

Canadian sales & engineering manager: Eric Schmelzl T: 403.862.0870

WEBSITE:

www.NCSfrac.com

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Company Profile

nisku industrial coatings ltd.

The commitment to quality assurance extends beyond company’s front door

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ommitment to quality continues long after customers leave the bright new sales and warehouse building Nisku Industrial Coatings Ltd. opened two years ago on 5th Street in Nisku, Alberta. Over the past 10 years, the firm’s owners and employees have worked with companies in the oil and gas industry to find coating system solutions that suit each company’s specific needs. Alongside these systems, a new program for quality assurance and warranty inspections has been developed.

Throughout its decade of operation, the company’s flagship product has been Jones-Blair (JB) Industrial Coatings, for which Nisku Industrial Coatings is the primary Canadian distributor of JB epoxies, zinc coatings, urethane topcoat and enamels.

Texas-based JB manufactures robust, lead-free coatings, which have gained widespread acceptance—particularly at weather-exposed environments such as well sites and production facilities.

As a new value-added service, Nisku Industrial Coatings’ knowledgeable personnel will visit applicators and sites where the JB paints and coatings are being used. They will inspect procedures and results—from

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the primer through to the topcoat—and provide feedback and recommendations to achieve compliance with the manufacturers’—as well as the clients’—specifications.

With paint, too much coating can hurt the applicators’ bottom line by adding to costs; too little may lead to premature corrosion or poor durability, resulting in dissatisfied end-users.

For owner Steve Marrazzo, Nisku Industrial Coatings’ quality assurance program amounts to “working with customers to ensure the systems and products are being used according to the manufacturers’ specs. We can ensure they’re not using too much or too little.

We can make sure the applicators are doing a good job and that establishes their reputation and secures status with their customers.”

Marrazzo and co-owner Carmen Yatscoff see such follow-up as solidifying their company’s reputation for meeting the needs of industrial customers, particularly in the energy and transportation sectors. The pledge to quality assurance fits with Nisku Industrial Coatings’ long-standing policies on integrity and customer satisfaction that have brought the company into the start of its second decade.

JB has been a pioneer in developing durable, high-performance coatings complying with strict VOC standards. Further appeal for JB paints stems from their consistent quality, including fidelity to corporate colour specifications. For high-volume customers demanding fast turnaround, Nisku Coatings maintains a stock of batch-filled corporate colours in its 3,500-square-foot Nisku warehouse.

While JB has served as its “bread and butter,” the Nisku Industrial Coatings owners are excited about offering another well-recognized product line, Danish-made Hempel coatings, designed for marine and tank applications.

Moving operations (including the warehouse) to the busy and strategically located 5th Street, the “Main Street” of the sprawling Nisku Business Park, has proved beneficial.

Says Yatscoff: “It has definitely increased our exposure and level of recognition and we hope to continue to grow here as an important business in our community.”

Adjacent to the warehouse stands a bright and spacious administration, sale and customer-service area. The space is stocked with a wide range of products, including featured Graco-line sprayers, as well as spray guns, filters, tips and hoses, brushes, pumps and safety equipment. Also popular with drilling customers are customized spray cans, whose content can be matched to corporate colours. Using tinted-to-order spray paint for touch-ups is an attractive alternative to off-the-shelf options, enhancing colour consistency on every project.

Nisku Industrial Coatings also supplies products to the U.S and Mexico—particularly for Canadian-based drilling and other companies seeking colour-consistency throughout their operations. For now, at least, western Canada will remain the principal market, but Nisku Industrial Coatings sees no point in painting itself into a corner.

FAST FACTS nisku industrial coatings ltd. address: 2109 5th Street Nisku, AB T9E 7X4 T: 780.955.9696 F: 780.955.7676

WEBSITE: www.niskucoatings.com P R O F I L E R M A G A Z I NE . C O M

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Company Profile

nwp industries inc.

All things to oil people

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his year marks NWP Industries Inc.’s 50th Golden Jubilee Anniversary. In an industry that’s notorious for its booms and busts, this milestone was no easy feat to accomplish.

Still family owned and operated, Debi DeBelser, president of NWP, says, “Our 50th anniversary means a tremendous amount to me and my family. It’s a true testament to the longevity of our business philosophy, which places a heavy emphasis on quality products and excellent customer service.”

NWP put its roots down in Blackfalds, Alberta, in 1962. Over the past five decades, the company evolved and split into several smaller companies. In 2005, a couple of companies were sold and NWP relocated to Innisfail, Alberta, where the company opened its new 65,000 square foot fabrication facility.

Today, NWP is one of the largest manufacturers of oil and gas well site processing equipment in western Canada. Some of the products that the company manufactures are separator packages from 16 to 96 inches in diameter; line heater packages up to 5.0 million British Thermal Units per hour; metering packages; pressure vessels up to 60,000 pounds; and above-ground storage tanks up to 400 barrels.

NWP’s equipment can be found on well sites, gas plants, gathering stations, compressor stations, or pipelines across the Western Canadian Sedimentary Basin. Today, most of NWP’s equipment is shipped to locations in northeast British Columbia and northwest Alberta. However, a growing number of equipment is being shipped to more conventional locations with the re-emergence of the Bakken and Cardium plays in Alberta.

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“The majority of our equipment is natural gas–focused but we are seeing a shift to more oil and liquids-rich focused equipment due to the persistently low natural gas prices,” says Mitch DeBelser, sales manager at NWP Industries Inc. Some of NWP’s largest customers include some of the largest E&P companies in the WCSB. “We look for customers that value a long-term fabricator/customer relationship as a true partnership and that understand how NWP can help its customers add value to their businesses over the long term,” says Debi DeBelser.

From its very beginning, NWP promised its customers excellent customer service. To provide this level of service, the company only hires people who have the niche set of skills and experience to work in an oil and gas fabrication facility.

All of NWP’s welders and pipefitters receive rigorous training at the company’s facility. The company also ‘over staffs’ its supervisory roles to give the green employees the training they require to make quality products. Key managers are sent to Success Lab for an MBA-like management training program.

“We understand that people don’t usually quit their job. Rather, they quit their supervisor. Therefore, NWP puts a lot of effort into getting the best supervisors possible. Plus, all of our managers have experience working at other fabrication facilities so they understand what works and what doesn’t,” says Debi DeBelser.

NWP’s long-term employees’ knowledge and expertise allows the company to build better products, faster, and more cost effectively. And a low employee turn-over rate means customers get to deal with the same people over long periods of time without the challenges of dealing with new employees on a regular basis.

Debi DeBelser says not only has building quality products and providing excellent customer service

allowed NWP to survive 50 years in this sometimes volatile and always cyclical industry, but the company’s business model has also enabled the company to survive and thrive. “We believe we have been able to survive five decades in this industry by adapting to changing marketing conditions and by instituting a business model of controlled growth.”

To celebrate its 50th anniversary, NWP plans to hold small events in Calgary and Innisfail throughout the summer months.

“These events are a chance for us to say “thank-you” to our long-time customers, suppliers, employees,” says Debi DeBelser.

“We plan to be around for the next 50 years where we will continue to grow our business by increasing our output from 1.5 shifts to 2 full shifts, depending on market conditions, and continue to focus on our large customers’ needs and meeting their demands to build the products they require for their oil and gas operations,” says Debi DeBelser.

FAST FACTS nwp industries inc.

Calgary sales office: #50 805 - 5 Avenue SW Calgary, AB T2P 0N6 T: 403.213.5520 F: 403.718.0438

WEBSITE: www.nwp.ca

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Company Profile

podollan inns, residences & spa Podollan Inns, Residences & Spa provide unparalleled accommodations and outstanding service

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f you want the very best in extraordinary luxury, comfort and service while visiting Grande Prairie or Fort McMurray, or holidaying at Salmon Arm, give Podollan Inns, Residences & Spa a call.

Every hotel in the family-owned-and-operated Podollan chain is custom designed and built to meet the needs of well-travelled guests.

“At Podollan Inns, you’ll find exceptional style and hospitality elevated to a fine art,” says Melanie Tighe-Lovsin, Director of Sales & Marketing for Podollan Inns, Residences & Spa. “It’s all about choices. We cater to our guests. We offer exceptional customer service to meet their needs. Our rooms are spacious and modern. Our junior suites are metropolitan, and our condominium-style long-term Residences boast all the comforts of home.”

These comforts include the best in everything, from beds to furniture to the latest in business and entertainment technologies.

“Podollan Inns are known for their comfortable beds, spacious rooms, walk-in showers and custom decor,” says Tighe-Lovsin.

Comfort and convenience are other hallmarks of the Podollan experience, with rooms decorated with luxurious leather furnishings surrounded by modern decor and art. Rooms come equipped with flat screen LCD TV, alarm clocks with iPod docking stations, complimentary high-speed wireless internet, and state-of-the-art soundproofing.

There is a soaker tub and separate, spacious walk-in showers in most rooms.

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Complimentary heated and secure underground parking, continental breakfast, in-room coffee, tea and bottled water at check-in, and a fitness centre pass are all part of the Podollan package.

Even getting to Podollan’s three regional locations is a snap. The company offers air service through its corporate plane for both corporate and leisure travellers. Its Pilatus plane can carry up to six travellers.

“It’s a cost-effective way to travel,” says Tighe-Lovsin. “You’re in the air within 30 minutes notice and can travel on your schedule 24/7. There’s no security and no waiting for luggage.”

Grande Prairie In Grande Prairie, guests can choose between the Podollan Inn & Spa or the Podollan Residence. Both properties are centrally located to downtown offices, shopping, the airport, big box stores, and Evergreen Park.

The Podollan Inn & Spa—one of the newer Grande Prairie hotels—features 109 richly appointed, modern rooms and suites. The hotel has a banquet room and a boardroom and caters to meetings, conferences, retreats, fundraisers, and weddings.

Guests can treat themselves to a unique spa experience at the L Spa & Wellness Centre, a certified member of the International Spa Association, a proud member of The Leading Spas of Canada, and recognized as one of the Top 50 Spas in Canada and one of the top 25 things to do in Alberta. Eminence

has also inducted it into the Green Spa Program membership.

“The L Spa & Wellness Centre brings relaxation and so much more,” says TigheLovsin. “A full-service day spa, it offers holistic therapies, far infrared sauna, Tripollar radio frequency skin tightening, body sculpting, rainforest steam showers, and a tranquilityinspiring lounge.”

The Grande Prairie Podollan Inn & Spa also features the city’s finest dining and relaxation hotspot, Jax Grill and Lounge. Jax showcases an innovative new menu with a large selection of martinis, spirits, wine and ale. The Friday and Saturday night prime rib and crab buffet

is not to be missed!

“It’s the perfect place to relax and enjoy lunch, dinner, or drinks after a long day,” says Tighe-Lovsin.

Podollan Residence is for guests expecting a longer stay in Grande Prairie. The Residence features fully equipped and furnished spacious studios, along with one and two bedroom suites. Guest can choose to lease accommodations for periods ranging from one week to a year.

Fort McMurray Podollan Inns have two accommodation locations in Fort McMurray.

The Podollan Inn, Fort McMurray, is a boutique hotel featuring 62 individually decorated suites that have been designed to the standards expected of a five-star facility.

Onsite amenities include complimentary wireless internet, a pub/restaurant, complimentary continental breakfast, and complimentary secure and heated underground parking. Close by is the MacDonald Island Park, home to Canada’s largest community sport and leisure facility. It hosts many of the large conferences and trade shows.

There is also a Podollan Residences in Fort McMurray.

“Beautiful and comfortable, all 39 of our suites are designed in a condominium style, with one or two bedrooms, fully equipped kitchens and luxurious furnishings,” says Tighe-Lovsin. These suites are ideal for extended stays, providing supervisors and crews with all the comforts of home while away from home.

Guests enjoy complimentary wireless internet, complimentary continental breakfast, and complimentary secure and heated underground parking. Guests also enjoy the popular hot spot—the Podollan Pub. Salmon Arm, British Columbia For those looking to get away, the Podollan Inn at Salmon Arm is one of the finest boutique luxury hotels in the Shuswap region, featuring 71 individually decorated guest suites, British Columbia’s largest outdoor seasonal free-form pool, and two hot tubs—all situated on 18

acres of gardens and lush forest. This is the perfect getaway in the summer to enjoy hot weather, warm lakes and plenty of water sports, hiking and biking.

Guest suites offer views of Shuswap Lake, the mountains and forest, as well as views of the pool and garden.

The Inn is situated within walking distance to downtown shops, the lakeshore trails, bird sanctuary, and Canada’s largest inland wooden wharf. It’s a two-minute drive to the arena, curling rink, recreation centre and pool.

Any time of year, the Podollan Inn is the ideal choice for corporate retreats with two meeting rooms and Table 24. “Table 24, our triple diamond rated restaurant, offers a culinary experience with creations from our award winning chef, and local wine pairings,” says Tighe-Lovsin.

The Podollan Inn was recently selected as one of 48 new members across Canada to be part of the Signature Experience Collection, a tourism initiative headed by the Canadian Tourism Commission. The tour takes travellers to experience the world renowned salmon migration at the Adams River, followed by a taste of the fall harvest of wine, produce, and culinary flavours. The Canadian Tourism Commission will market the Salute the Sockeye experience in eleven countries, bringing the world to Salmon Arm, Shuswap and Canada.

“This is the perfect location to relax, have family time, or strategize in a corporate retreat,” says Tighe-Lovsin.

FAST FACTS podollan inns, residences & spa director of sales & marketing: Melanie Tighe-Lovsin T: 250.307.8488 E: melanie@podollan.com

WEBSITE: www.podollan.com

P R O F I L E R M A G A Z I NE . C O M 101

Company Profile 102

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SENSORS

SENSOR DEpth (fEEt) Bht (fahRENhEit) Bhp (pSi) failuRE WithiN DESigN

Total Sensors

481

Days

2,308,558

Years

6,325

Maximum

12,601

Average

3,110

Maximum

490

Average

138

Maximum

17,000

Average

3,164

Failures

26

Reliability

95.9%

failuRES ExcEEDiNg DESigN Failures Reliability

12 98.1%

Company Profile 104

RESERVOIR TEMPERATURES

FIRST YEAR DRIFT RATE

ESTIMATE APPLIED PRESSURE

FIRST YEAR DRIFT RATE

Celsius

% of Applied Pressure

kPa

kPa

psi

250

1.00%

3,900

39

6

225

0.60%

2,400

14

2

200

0.20%

1,450

3

0

June 2012

Company Profile

quantum downhole systems Under-balanced Wellbore Cleanout Technology. More oil, sooner.

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his is what Quantum Downhole Systems is helping oil companies achieve, with a technical tool that allows a better understanding of complex well designs and how they work in a particular reservoir.

Quantum’s patented JetVak system uses a coiled tubing system and engineered jet pump to address the challenges producers face when developing underpressured reservoirs. This unique technology cleans out wells and also gathers data that can help producers optimize their drilling and completions strategies.

“It’s one of the tools for oil companies to go in and understand these wells and reservoirs better—so they can get to that ultimate recovery number faster,” says Quantum President and General Manager, Steven Winkler.

The technology is essentially a vacuum cleaner (jet pump) on the end of a coiled tubing. The intellectual property aspect comprises special coiled tubing with two conduits, which allows Quantum to operate a jet pump on the bottom, creating the vacuum.

The JetVak Downhole pump’s two main functions are to create simultaneous jetting and vakking. High pressure jets fluidize the sand, break through solids bridges in the liner or treat the reservoir face in open hole.

Wellbore fluid and solids are returned to surface via the second coil conduit in the FlatPak coiled tubing, a patented process that allows Quantum to recover a higher volume of sand per well compared to conventional techniques, and pinpoint zones that are producing sand into the wellbore. “It’s a clean-as-you-go approach.”

Founded nearly three years ago, Quantum has clients across western Canada and in the Middle East. The Calgary-based company has been proving the JetVak technology over the past year-and-a-half, with a client list that includes many of the oilpatch majors.

Quantum has completed approximately 450

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operations in many of western Canada’s hot plays, including Thermal SAGD, CHOPS Lloydminster, Montney oil, Viking, Pekisko, Slave Point, and the Lower Amaranth.

Safety and logistics are huge benefits with the JetPak system, since no air or oxygen enters the wellbore—eliminating concerns about creating explosive mixtures downhole.

“Our system typically utilizes 100 per cent produced water that can be recycled, so if there is a break in the line it becomes a leak,” Winkler says. “It is a really safe work environment on location.”

Recently, Quantum has been doing production evaluations on horizontal wells. It’s now developing an isolation system that uses inflatable packers in combination with the modified jet pump. Information—including stage-by-stage oil, water, gas and sand ratios can be cross-referenced with producing bottomhole pressure and temperature information—helping create an accurate economic model for the well and potentially leading to higher productivity, improved fracture treatments and higher overall reserves. Essentially is this is a production log on non-flowing wells. In many cases, Quantum is recovering fluids and/or solids that clients have never seen before, such as drilling mud, enzyme breakers, frac gel and sand.

Quantum is constantly refining the technology—“it’s something we are committed to.” The company, along with CJS Artificial Lift Technologies, is also developing all-steel ‘ArmorPak’ coiled tubing, which could replace its current vulcanized thermo plastic jacket ‘FlatPak.’ A second technology under development is a jetting system to increase jetting flexibility and reduce the number of runs required in a well when production testing is part of the program.

Going forward, Quantum is seeking to gather more information on reservoirs using its technology. “Our findings are showing that in many cases, the full lateral section of

these horizontal wells is not being utilized,” Winkler explains. “We’re seeing that, via the returns we’re getting out of the wells. What we want to do is work with the producers to see how we can use this information so they can better exploit their assets.”

This is where Winkler sees the future for Quantum Downhole Systems. “Because the big picture is understanding the relationship between the wellbore and the reservoir.

This information can give oil companies more oil, faster.”

He adds, “How we choose to evaluate the data, and how we get there is something we need to do together. We are not claiming we have the answers for everything. Based on our findings, there are some big question marks and we need to work together as an industry. We have something here that we can use to get more data on the wellbore-reservoir relationship and what it really is. We feel it could be very valuable and should be evaluated right now.

“We have interest from many places around the world and we are looking at expanding into these places, because the needs we have here are not localized; they are in South America, the Middle East, Australia, New Zealand—you name it.”

FAST FACTS quantum downhole systems PRESIDENT/general manager: Steven Winkler T: 403.450.8280 C: 403.803.8307 E: swinkler@quantumdownhole.com

WEBSITE: www.quantumdownhole.com

Company Profile

renegade oilfield services Safety and dependability are always onboard When Renegade Oilfield Services trucks deliver

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ince start-up 10 years ago, Red Deer– based Renegade Oilfield Services has kept rolling along. The wheels of this oilfield transportation and specializedequipment provider have turned even faster as fracking picked up speed. That has strengthened Renegade as a reliable chemicals hauler and built on a good name gained for transporting sucker rods, tubing, casing heads and other oilfield equipment.

“We particularly serve a lot of the major service companies—the likes of Halliburton, Baker Hughes, Calfrac, Schlumberger, Canyon Technical Services and Trican,” explains Shane Snydal.

Renegade’s Operations Manager estimates that about 70 per cent of company business now is oilfield-related. (The construction, agriculture and municipal sectors account for most of the rest.)

Renegade began when owner Gene Wiebe hit the road with a single truck and trailer. A decade later, the company has 30 trucks and 50 trailers—including picker trucks, heated/enclosed trailers, highboy

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and gooseneck trailers, and specialty booms and winch tractors. Beyond that, Renegade can fill various other specific customer requirements—from providing diesel air compressors to supplying diaphragm pumps. Snydal observes that while “a lot of companies try to do what we do, none does it quite the way we do it.”

Wiebe remains a committed force behind Renegade’s success. Starting with five employees, he now is backed by a dedicated 40-member team including drivers, dispatches, mechanics and administrative staff.

While ready to hire qualified younger workers, most of Renegade’s hires are aged 30-plus. It means they come with a cushion of experience and added safety awareness.

Clearly, greater safety consciousness directly benefits employees and Renegade as an employer. But it is also a good selling point as international majors and other customers pay more heed to their own and suppliers’ safety records. Recent Renegade’s safety initiatives have included

obtaining a Certificate of Recognition standing through Enform, the upstream oil and gas safety association.

“We require all employees to take part in safety courses above and beyond basic safety instruction,” notes Snydal.

Renegade trucks are licensed to operate from Manitoba through to British Columbia.

This inter-provincial reach is important as fracking expands in Western Canada.

“We’re wherever there are ‘hot spots’— from Kindersley, Sask., to Grande Prairie, Alta.—and we offer a 24/7 response,” says Snydal. Multi-zone fracking calls for more equipment and chemicals to be stationed at wellsites. To assure access to equipment when needed, some major servicing companies have agreements with Renegade to guarantee availability.

According to Snydal: “A lot of our hauling involves frack chemicals. That’s really what we specialize in. We have certain trailers that are complete pumping units, designed to make the job easier. We also have transfer units with piggy-back fork lifts to

move frack chemical as the fracks are getting bigger.”

Red Deer–based Renegade recently acquired shop and yard space in Nisku and entered a working relationship with the Lecor Group. Service and equipment offered from this satellite base includes drilling-related heavy and pipe-hauling equipment, winch trucks and heavy pickers.

Meanwhile, hauling for completions will remain in Red Deer, where a new 10,000-square-foot shop is being built. One of its four bays will have an 80-foot-long servicing pit and another is equipped for truck and trailer washing.

“We’re big on cleanliness and looking good,” says Snydal with a smile. However, the spit-and-polish stance comes naturally to this former Canadian Forces member, who was instrumental in positioning large “Support Our Troops” signs on some Renegade trucks. It also may serves as a subtle reminder that despite its somewhat rebellious name, Renegade delivers with discipline and military precision.

Renegade’s hires are aged 30-plus. It means they come with a cushion of experience and added safety awareness.

FAST FACTS renegade oilfield services PRESIDENT: Gene Wiebe T: 403.350.7777 E: gene@renegadeoilfield.ca

WEBSITE: www.renegadeoilfield.ca

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Company Profile

rotating right inc.

It’s all about serving the customers’ best interests

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or Rotating Right Inc., it’s all about serving the customers’ best interests.

“The customers’ interests—that’s what we’re driven by,” says Len Kerekanich, President and Founder of Rotating Right, which provides surface pumping, subsurface pumping applications and hydraulic lift products to the oil and gas industry, serving customers across western Canada and internationally.

Rotating Right—which specializes in the sales, application and service of surface pumping systems, subsurface artificial lift pumping systems, engines, generators and electric motors—offers a complete line of new and reconditioned surface pumps, engines, generators, electric motors and downhole artificial lift products. The Edmonton-headquartered company backs up its product line with an inventory of

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expendable and repair parts, as well as field and shop service. Rotating Right offers 24-hour, 7-days-a-week on-call service, maintenance, product, technical and start-up support on all the equipment it offers to customers. In addition to its manufacturing facility and head office in Edmonton, Rotating Right operates a sales office in Calgary and a branch office in Drayton Valley.

The company, which opened its doors in 2001 with five employees, has now grown to a staff of 55.

“The major key to our success is that our customers’ interests are primary. We are very much customer-focused and I believe that our growth in the past 11 years attests to that. In everything we do, integrity is the underlying foundation of all our activities.”

For Rotating Right, there’s always a ‘we-can-do-it’ type of attitude. “I don’t like to

hear the word, ‘can’t,’” Kerekanich says with a smile. “There is no such thing as ‘can’t’ or ‘impossible.’ There’s always a way to do it—we just have to find it. Something that I try to drive through the organization all the time is that everything exists as a possibility.”

A Revolutionary New Form of Artificial Lift Until now, most of the company’s growth has centered around traditional pumping products and services. Recently, Rotating Right has been working on introducing a new downhole pumping system and artificial lift pump to North America: the Reciprocating Electric Submersible Pump (RESP). Rotating Right is presenting the RESP as an alternative or replacement to the ubiquitous pumpjack, which accounts for more than 90 per cent of installed artificial lift systems worldwide.

The company, which opened its doors in 2001 with five employees, has now grown to a staff of 55.

Developed by a company in northern China, the RESP has been used in Chinese oilfields for the past seven years. Since learning about the pump two years ago, Kerekanich has been working hard to introduce the technology to North American markets by making improvements to the system; in particular, the electrical control system has been totally redesigned to improve functionality and meet CSA and UL safety requirements. Rotating Right has also made other improvements to the RESP system’s downhole pump and downhole motor.

Reciprocating Electric Submersible Pump The RESP “addresses a lot of the problems in deviated wells that are associated with the traditional pumpjack system by eliminating the mechanical connection between the pumpjack and downhole pump,” Kerekanich

explains. “Friction loads between the rods and tubing in deviated wells can have a huge impact on the system’s efficiency, as well as on its long-term operating cost.”

The RESP improves efficiencies and does away with the problem of rod and tubing wear by eliminating the use of sucker rods, using a permanent magnet downhole linear electric motor that reciprocates. The linear motor replaces the pumpjack and sucker rods to drive the reciprocating pump end to lift production to the surface. It is coupled to a positive displacement pump, very similar to a traditional rod pump. The controller only energizes the motor when travelling up or down, and the motor is off between strokes, saving energy.

The RESP, which can be run in directionally or horizontally completed wells, offers a number of advantages: it consumes less power than conventional methods, is easily

optimized and features a highly variable stroke rate.

“It’s revolutionary on a number of fronts,” Kerekanich notes.

The RESP uses less energy and it’s far greener to manufacture. “The carbon footprint in the manufacturing process is much smaller with this product—the traditional pumpjack uses about 30 times as much material,” Kerekanich explains. “Operationally, the RESP is an environmentally sounder system. With the RESP, you’ve eliminated the possibility of leaks of oil and/or gas. With a pumpack system, you’ve got a packed stuffing box on the wellhead, with the potential for leaking oil and gas emissions.”

The RESP is also much safer. “You don’t have that great big hulking piece of machinery sitting on the surface rotating and making noise. And, from an aesthetics point of view, you get rid of having a big obtrusive pumpjack marring the landscape. With the RESP, all you have at surface is your wellhead and the controller—everything else is in the wellbore.”

Rotating Right expects the first RESP installations in Canada and the United States to take place in the very near future. You can see an exhibit of the RESP at the Global Petroleum Show, Booth #3021.

A Bright Future There are many reasons the future looks promising for Rotating Right.

“I’m very positive about the industry and the growth opportunities that are out there,” Kerekanich says, noting that Rotating Right is always in continuous development mode for new products. “With the introduction of our new product offerings, we are looking forward to exponential growth.” In addition to the RESP product line, the company is working on a new horizontal pump system that will be ready for market this year as well.”

FAST FACTS rotating right inc.

T: 780.485.2010 F: 780.485.1938 E: solutions@rotatingright.com

WEBSITE: www.rotatingright.com

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Company Profile

Sawridge Inns & Conference Centres Dreamers wanted

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awridge Inns and Conference Centres is dedicated to providing exceptional value for guests in each of the communities it operates in.

“All of our hotels are full-service hotels—we are a one-stop shop,” says Sawridge Vice President Hospitality, Jim Hill.

Three Sawridge properties—Sawridge Slave Lake, Sawridge Peace River and Sawridge Fort McMurray—are situated in the heart of Alberta’s oil and gas industry, and they cater to everyone from work crews to executives. Hotel amenities include a conference centre, lounge, award-winning restaurants, a fitness facility and much more.

For travelers transitioning through Edmonton, Sawridge operates a beautiful hotel in the city’s south end, just 20 minutes from Edmonton International Airport. And for leisure activities, there is Sawridge Jasper, a four-star resort that offers a tranquil retreat for guests to relax and experience the breathtaking Rocky Mountains.

Sawridge does a great deal of business with the oil and gas industry, providing guest rooms, meals and meeting space. “We are no stranger to the industry, and we have salespeople devoted to working with the oil and gas industry to make sure we can accommodate their needs,” Hill says.

For example: “Our hotels in Peace River, Slave Lake and Fort McMurray have parking lots designed to handle heavy equipment—if you’ve got larger vehicles and equipment to park, we’ve got the space.”

Sawridge Inns and Conference Centres is a strong supporter of the communities it operates in. The Edmonton-headquartered company is also committed to protecting the environment, with wide-ranging policies and practices.

Sawridge Inns and Conference Centres was founded 40 years ago by the Sawridge Cree First Nation of Slave Lake, Alberta.

“We embrace our First Nation roots, and it’s

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a real point of difference for our company,” Hill says.

Each Sawridge property offers guests the comfort, warmth and hospitality that are proud hallmarks of native tradition. The company’s native heritage can be seen in the artwork, native artifacts and natural materials, such as local woods and stone, that make up each hotel.

“When people stay in our Slave Lake hotel and then take a trip to Fort McMurray, they choose the Sawridge hotel there because they had such a great experience in Slave Lake. We have very nice hotels with beautiful masonry and wonderful woodwork.”

However, “it’s the people and the service that make the product—that’s why our guests keep coming back. We can teach anyone how to serve a table or make a bed, but it’s the attitude you get in our hotels that makes all the difference. Our staff are caring, they are warm, they are welcoming. We’ll bend over backwards for our guests. We’ve had occasions where guests forgot to pack a tie—and one of our people will find a tie somewhere. We had a guest who had a special need for a TempurPedic foam pillow. We didn’t have one in-house, so the front desk clerk hopped in her car, drove to a local store and bought two of them for the guest. It’s things like that that are real points of difference for Sawridge.”

These are some of the reasons that Sawridge has been honored with many awards over the years, including Pinnacle Award Winner, from Hotelier Magazine, as a 2010 Regional Hotel Company of the Year; Regional Finalist 2011 Canada’s 50 Best Managed Companies; and a 2011 Wine Spectator Award of Excellence from Creations Dining Room and Lounge.

Sawridge is also the recipient of a 2012 Hotel Association of Canada Humanitarian Award of Excellence for the company’s actions during the devastating 2011 Slave Lake

wildfires. “For the two weeks immediately following the fires, we were able to re-open the hotel in Slave Lake and work with the emergency crews,” Hill explains. “Our credo was ‘The answer is yes—what’s the question?’

And that was everything from feeding 250 people at midnight, to opening up guest rooms for people not staying with us to just come in and have a shower. It was very gratifying to be able to help.

“To be recognized by third parties for the work we do makes us very proud; it recognizes the professionalism of our company.”

For Sawridge, it’s all about providing an exceptional product and always seeking to do better. Even during the recession, the company spent millions on renovations at its Edmonton, Fort McMurray and Peace River properties. “We don’t stop. Our product has to be maintained and enhanced for 2012,” Hill says. “We’ll be renovating more guest rooms in Peace River, and all the public areas in Fort McMurray.”

Going forward, Sawridge is looking to grow by adding properties. In Fort McMurray, the company plans to build an extended-stay suite hotel in the city’s north end, opening in 2013.

“If you’re thinking of choosing a hotel, Sawridge is looking for people with big dreams, and we want to help fulfill them.”

FAST FACTS sawridge group of companies vice president hospitality: Jim Hill T: 780.395.2494 F: 780.428.3335

WEBSITE: www.sawridge.com

Company Profile

Schlumberger

Committed to Canada for more than 80 years Schlumberger Limited (NYSE:SLB) is the world’s leading oilfield services company, supplying technology, information solutions and integrated project management to optimize reservoir performance for oil and gas industry customers. Founded in 1926 by brothers Conrad and Marcel Schlumberger who invented wireline logging as a technique to obtain downhole data in oil and gas wells, Schlumberger employs more than 113,000 workers in approximately 85 countries worldwide.

Schlumberger has been active in Canada since 1928, and employs more than 2,000 workers in its Canadian operations today.

At Schlumberger, we are focused on working with our customers to increase oilfield efficiency, lower finding and producing costs, improving productivity, maximizing reserve recovery and increasing asset value. We do this through a robust offering of services that combine domain expertise, best practices, safe and environmentally sound well site operations, and innovative technologies.

In addition to drilling, Schlumberger service offerings include: seismic acquisition and data processing; openhole and cased-hole wireline logging; well services such as cementing, coiled tubing, stimulations and sand control; well completion services, including well testing and artificial lift; software; interpretation and consulting services; and integrated project management. Schlumberger field employees are highly trained, and have access to top-level technology centres 24 hours a day, seven days a week through the InTouchsupport.com knowledge management tool.

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Schlumberger Expands After Smith Merger The 2010 merger with Smith International expanded Schlumberger’s service and technology portfolio to include SmithBits, PathFinder, tubular and completion products, and M-I SWACO. The expanded organization provides unparalleled breadth of solutions for our customers.

Schlumberger’s geographical footprint is helping the merged companies extend these joint offerings worldwide.

The commitment to excellence that is shared by all of the Schlumberger companies means that the same experts and technology that clients have trusted in the past, still serve with their commitment for continual improvement into the future. These trusted experts and proven technologies are available for your application in the field, whether a drilling expert with PathFinder, or a cased hole hand with E&P Wireline.

Committed to Research and Development Schlumberger continues to build on the industry’s longest track record of providing leading-edge E&P technology to develop new advancements. Schlumberger has always made significant investments in research and engineering as a longterm strategy to support and grow its technology leadership. In 2011, Schlumberger invested $1.1 billion in R&D for its oilfield activities. Historically, Schlumberger invests more each year in R&D than all other oilfield services companies combined.

At Schlumberger, we are focused on working with our customers to increase oilfield efficiency, lower finding and producing costs, improving productivity, maximizing reserve recovery and increasing asset value.

In Canada, we are pleased to have three centres, which provide a unique local level of expertise while still leveraging the strength of the vast Schlumberger R&D network worldwide. First is the Heavy Oil Regional Technology Centre located in Calgary. The centre supports a non-commercial multidisciplinary team who work with our clients to develop solutions to problems that have not been typically addressed by industry.

Second is the DBR Technology Centre located in Edmonton. Historically located in the Alberta Research Park, this technology centre has been facilitating enhanced oil recovery and flow assurance by being at the forefront of reservoir fluids studies, thermodynamic research, thermodynamic modeling and development of equipment for the evaluation of thermodynamically driven processes for more than 30 years.

And finally, with a scientific approach that spans decades, our TerraTek rock mechanics and core analysis experts turn the complexities of reservoir rock into actionable information clients can use.

Four Key Competitive Advantages ■ Deep domain knowledge of exploration and production operations, gained through over 80 years of experience; The service industry’s longest commitment to technology and innovation through a network of 25 research, development, and technology centres;

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A global reach, coupled with strong local experience and the great diversity in knowledge of Schlumberger workers who are drawn from more than 140 nationalities;

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A commitment to excellence in service delivery.

In Canada, we are pleased to have three centres, which provide a unique local level of expertise while still leveraging the strength of the vast Schlumberger R&D network worldwide.

Committed to the Community Schlumberger Canada has sponsored a literacy project for 14 years working in partnership with education boards, the ReadOn! Literacy Project, Rock and Roll Literacy, the Calgary Hitmen Hockey Club, the Edmonton Oil Kings, and now the Canadian Sports Hall of Fame, and has given out over 400,000 books.

This partnership has also provided opportunities for students to participate in engaging high energy author visits and writing workshops along with special Calgary Hitmen hockey events.

As a science and technology-based company, Schlumberger adopted education as a key theme of our community outreach, which is composed of several initiatives like SEED (Schlumberger Excellence in Educational Development) and the Schlumberger Foundation.

Committed to Quality, Health, Safety and the Environment Schlumberger maintains an unwavering commitment to the highest standards in the quality, health and safety of its employees, customers and contractors, as well as to protecting the environment in the communities where Schlumberger employees live and work.

Please contact for more information: Schlumberger T: (403) 509.4000 www.slb.com

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*Mark of Schlumberger. Other company, product, and service names are the copyright of their respective owners. Copyright © 2012 Schlumberger. All rights reserved.

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Company Profile

skyway canada 45 years in business with solutions you can trust Scaffold Sales, Rentals and Service

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kyway Canada has been safely supporting its customers since 1967.

For the past 45 years, Skyway Canada has been a trusted provider of safe, cost-effective scaffold and shoring solutions across western Canada and Ontario. Skyway is a singlesource solutions provider offering scaffolding, swing stage and shoring, engineering, design, erection and dismantling services; project management and control; and cost control and billing systems. Tailored management solutions can be integrated with clients’ internal systems, ensuring accuracy, efficiency and timely reporting.

“Our approach is to develop the right solution for every project, to ensure safety, production efficiency, cost effectiveness and on-time completion,” says Skyway Canada President and CEO, Gary Carew. “What makes us unique, is our experience and expertise in the design, engineering, delivery and maintenance of our systems. We have set the highest industry standards for safety and quality. We are a safe company—not just a company with a safety manual. Our vision for this company is to be the safest, smartest scaffolding company in Canada.”

The company, which is Canadian owned and operated, has 165 full-time employees and 1,100 employees in the field, with

Skyway branches in Toronto, Sarnia, Thunder Bay, Edmonton, Calgary, Bonnyville, Whitecourt and Grande Prairie. The company, which operates under the SkyHigh name in Saskatchewan and Manitoba, has branches 116

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in Saskatoon, Regina, Winnipeg and Brandon, as well as in Edmonton.

Skyway provides workers with a great deal of in-house training, helping employees build a long-term career. For example, Skyway provides National Construction Safety Officer (NCSO) training for site supervisors—a 13-course training certificate mainly aimed at safety representatives on a work site. “As there is such a push to safety in the industry, we want our supervisors to be that safety conscious as well, and speak the same language as the safety people,” explains Skyway Western Regional Manager, Dan McLeod. Skyway offers a variety of training, including Skillsoft, “which is essentially a prerequisite if you are going to take a project management professional designation. It has all the courses you would need.”

Because activity levels have been so high, Skyway has been focusing on training people locally. The company formed a joint venture with the Six Nations group in Bonnyville, where Skyway has been running introductory courses to scaffolding. “This has been very well received,” McLeod says, noting that Skyway has placed 80 per cent of those who have completed the training. The company wants to offer training in other areas as well, “where we’re trying to find people that are available locally that haven’t been utilized.”

Skyway Canada was established in Toronto in 1967, in order to supply contractors and the commercial market in southern Ontario. In 1996, Skyway expanded to Sarnia in order to better serve Ontario’s industrial market, and in 1998 the company established itself in Alberta. In 2005, Skyway acquired SkyHigh Scaffold in order to expand its operations into Northern Ontario, Saskatchewan and Manitoba. SkyHigh Scaffold had built a good reputation with the SkyHigh name, and these acquisitions have provided Skyway Canada with a strong market presence from Ontario through to Alberta.

Currently, SkyHigh is supplying all of the scaffold labour and all materials for the Consumers’ Co-operative Refineries Limited (CCRL) expansion in Regina. SkyHigh was chosen as the scaffold contractor of choice

thanks to its Track-RITE system for managing cost, schedule and productivity.

Skyway’s proprietary Track-RITE Project Control System keeps labour and equipment costs and worker productivity in plain view, on a real-time basis so expenses and project progress can be reviewed daily. With TrackRITE, every scaffold build is uniquely identified and tracked in a database, so the customer maintains complete visibility over every aspect of the project. On repeat jobs, such as annual maintenance shutdowns, Track-RITE’s data mining capacity is particularly valuable. When the next scheduled event approaches, it’s easy to go back to the data to compare previous estimates and actual data, and obtain solid information for the next project.

In Alberta, Skyway is focusing on oilsands opportunities; and in Saskatchewan, SkyHigh is focused on opportunities associated with potash mine expansions. It also plans to return to the B.C. marketplace.

“Our near future is going to be extremely busy. As we grow, we need people to fill more roles, so there is lots of opportunity for advancement,” McLeod says.

As projects in Western Canada heat up, one of the major challenges the company is now facing is the requirement for additional labour. “Bring the skills we need to the company, and we’ll support you, empower you and help you grow your career,” says Skyway Canada Vice President Business Development, Terry Haunn. “We want to be the place to work for scaffolders—we want people to come and develop a career here.

We believe in open, honest communication, and we treat them well.”

Skyway is also seeking to recruit people from other provinces and countries, as its manpower requirements increase.

FAST FACTS skyway canada vice president, business development: Terry Haunn T: 780.413.8007 F: 780.413.8012 E: terry.haunn@skywaycanada.ca

WEBSITE: www.skywaycanada.ca

Company Profile

stewart & stevenson When it comes to well stimulation, Stewart & Stevenson is No. 1 worldwide

S

tewart & Stevenson, which is celebrating its 110th anniversary this year, is a leading designer, manufacturer and provider of specialized equipment and after-market parts and service for the oil and gas industry.

Its products support hydraulic fracturing, well stimulation, workover, intervention and drilling operations, including pumping, acidizing, coiled tubing, cementing and nitrogen units, drilling rigs and workover rigs, power gen-

More recently, the market trend has been turning towards oil reservoirs, which is directly related to the current price of oil and natural gas. “We as a company have had to adapt our equipment offering to support this, while still providing fracturing pumps and other well stimulation products,” Wawrzynowski says. “With the new market trends, our business is changing to support that.

“Being the world’s largest well stimulation manufacturer is something we are very proud of.”

— Rob Wawrzynowski, vice-president, sales and marketing, Stewart & Stevenson

eration systems and electrical support and distribution systems. Stewart & Stevenson operates 53 locations in North America, South America, Europe, Asia and the Middle East, with agents all over the world. Things have changed a great deal over the last century, and Stewart & Stevenson has changed with the times, with a versatile business strategy to support the market as it evolves. In the past five years, the energy industry has experienced a large demand for equipment to support the North American shale gas plays, which Stewart & Stevenson has benefited from, manufacturing over 20,000 hp per week.

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“As a company, Stewart & Stevenson can offer our clients all of the turnkey solutions they need from A to Z—whether it’s drilling equipment, a small well servicing pump, or a completely integrated fracturing spread, including controls.”

Stewart & Stevenson can provide the equipment required to drill, complete, stimulate and service wells. “There is virtually no limitation on the equipment we can provide.”

Stewart & Stevenson has developed large-capacity coiled tubing units, nitrogen pumping equipment and other well

intervention equipment. Some of its more traditional well servicing customers are now moving towards the use of this equipment to supplement their current rig fleets, allowing them to tap into the new marketplace.

Some of the new products include the deepest coiled tubing units that are road legal year-round, surpassing the 5,000metre mark on a standard trailer. With a more sophisticated trailer assembly, this coiled tubing unit can run over 7,000 metres.

Over the past 110 years, Stewart & Stevenson has succeeded based on strong relationships it has built with longstanding customers. “Our reputation is something that we are very proud of, and our reputation is ultimately something that will stay with us. Our reputation and our people are our biggest investment to support our existing client base—and our people are undoubtedly our most important resource.”

Stewart & Stevenson knows that in order to succeed in the future, it must remain innovative, forecast where the market is going, and stay a step ahead of the market. “We want to lead the market to where it’s going,” Wawrzynowski says.

“To stay innovative, we need good people, especially given the current climate for skilled trades and professionals.” Engineers, purchasers, welders and mechanics—these are some examples of the types of skilled people the company needs.

“Because Stewart & Stevenson has been so successful, we are looking at new opportunities and growth. We’re still a growing company. No matter what your oilfield equipment requirements are, please contact us.”

FAST FACTS Stewart & stevenson canada contact: T: 403.215.5300 Toll-Free: 1.800.661.6172

WEBSITE: www.stewartandstevenson.ca

Innovative Oilfield Equipment Stewart & Stevenson Canada Offers: • Custom Engineered Drilling and Well Servicing Rigs • Comprehensive, Field-Proven Stimulation Systems Frac pumps and blenders, chemical additive and hydration systems, cementing and acidizing units, data acquisition and controls • Coiled Tubing Systems with Industry-Standard

Injector Heads

• Nitrogen and Industrial Gas Systems The industry’s widest range of nitrogen pumpers • Service & Aftermarket Support Equipment commissioning, training, maintenance, refurbishment and parts

Canada Sales & Service Calgary, Alberta: 1-800-661-6172 International Sales & Service Houston, Texas: 281-345-5503 On the Web www.stewartandstevenson.ca

Come Visit Us at Booth #3405

Company Profile

Surface solutions inc.

Leading the industry in fracture monitoring services

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he onslaught of multistage, hydraulic fracturing in conjunction with horizontal drilling in the past five years has resulted in several challenges faced by industry. Communication between two adjacent wells can result in incidents that can cause damage to the wellbore, surface equipment, and the environment, and pose a threat to human and animal life.

To mitigate these incidents, an oilfield services company in Grande Prairie, Alberta, developed a new software technology called Offset FRAC Monitoring. After working for several years with half a dozen producers that required regulatory compliance and surface data acquisition, Mike Beck recognized that there was a more proficient way to capture well testing data and monitor communications between wellbores.

“Back in the mid 1990s, when remote data acquisition in the industry was starting to take shape, I saw an opportunity in a niche market to provide fracture monitoring services by merging today’s highly accurate technologies,” says Beck, business development manager, who started Surface Solutions Inc. (SSI) in 1999.

In 2007, SSI commercially launched its web-based Offset FRAC Monitoring package.

The Offset FRAC Monitoring hardware is a portable, solar-powered, password-protected pressure recorder that is mated with a 128 bit SSL encryption modem that transmits readings to SSI’s secure web page. The software offers an easy-to-use graphical interface that allows the information to be downloaded whenever the end-user chooses.

“We were the first optimization company to bring streaming data to a web-based platform,” says Beck.

The software can monitor up to 15,000-psi fractures in real-time, and is the most accurate and robust stand-alone pressure sensor in the industry. The real-time data of adjacent wells is monitored through SSI’s web site to the producer’s computer and/or mobile devices, wherever they might be located. This gives frac engineers and field consultants the ability to view the data on-site in a data van or at the producers’ offices.

Some of the primary effects of wellbore-towellbore interference during a fracture stimulation are over-pressuring of a producing wellhead, loss of production due to the possible injection of frac oil and sand into the

operator’s producing well, or knocking another operator’s producing well off-line. “For example, if the pressure on an adjacent well becomes too high, the producer can see the

monitoring of the wells. According to the ERCB’s Directive 056 (Section 2.3.2 Notification, 36), “The applicant must provide a copy of its project-specific information package…” to affected parties, which include public, industry, and regulatory bodies, but the Directive makes no mention of monitoring the communication between wells in near proximity to each other.

Beck says many producers are aware of the potential incidents that could occur if interference occurs between a horizontal well and adjacent wells. “Most producers are socially and environmentally conscious and want to be good corporate citizens. Therefore,

“ We were the first optimization company to bring streaming data to a web-based platform.”

— Mike Beck, business development manager, Surface Solutions Inc.

communication between neighbouring wells and instantly shut down the frac’ing. This eliminates a potential incident from occurring,” says Beck.

The Offset FRAC Monitoring software allows producers to safely monitor nearby wells (active or suspended) when they are fracing their horizontal wells. “By using our Offset FRAC Monitoring software, producers can now track, monitor, and shut down operations if communication is present with nearby wells,” says Beck. “Our database allows us to library all data, so that in the event of a surface release, test information can be recalled and examined.”

In British Columbia, the BC Oil & Gas Commission regulates the communication of horizontal wells with adjacent wells during fracture stimulation with its Safety Advisory 2010–03, which states, “It is recommended that operators cooperate through notifications and monitoring of all drilling and completion operations where fracturing takes place within 1000m of well bores existing or currently being drilled.”

However, in Alberta, the Energy Resources Conservation Board only regulates the notification of drilling wells, not the

these producers are going above and beyond current government regulations to avoid any liability that might occur due to any potential fracturing stimulation incidents.”

Beck says some producers have taken additional precautions by installing 10,000 psi wellheads on producing wells where communication is more prolific. “This is a great step towards addressing safety and environmental concerns, but it does not address the suspended, orphaned, or low-pressure producing wellheads owned by other companies. We have seen a dramatic increase in the need to monitor wellheads in southern and central Alberta,” says Beck.

“Higher populated areas with lower pressure wellheads in or near high density drilling operations need to be protected.”

SSI currently provides services from the southernmost part of Alberta to the northernmost part of British Columbia. Some of SSI’s clients include Encana, Murphy Oil, and Shell Canada. Beck says a few of its customers have requested that SSI open an office in Saskatchewan to provide services to those customers that have operations in the Bakken oil play. “We plan to open an office in Estevan later this year.”

Services • Offset Frac Monitoring • Data Frac Injectivity Testing • Perforation Inflow Diagnostic • Step Rate Injectivity Testing • Flow and Build Up • Gas Migration Testing • Surface Casing Vent Testing • Packer Isolation Testing • Pipeline Testing • Fluid Level Determination

FAST FACTS Surface Solutions Inc. PRESIDENT/FOUNDER: Mike Beck

contact: Grande Prairie: 780.538.1074 Red Deer: 403.358.5940 Calgary: 403.261.0019

WEBSITE: www.surfacesolutions.ca

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Company Profile

thru tubing solutions Listen to their own employees to enhance customer service

T

TS Drilling Solutions may be new to Canada’s oil servicing sector, but it draws on the solid reputation already gained by Thru Tubing Solutions, a sister organization active in Alberta since 2006. Thru Tubing Solutions has become a trusted provider of coiled tubing downhole tools, running and retrieving services, abrasive cutting and perforating, snubbing, and related tools and services particularly geared toward workovers. TTS Drilling’s focus is clearly stated in its name.

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“We are the leaders in what we do and others are playing catch-up,” explains Country Manager Robert Phillis, who is based in Red Deer and oversees Canadian business interests for RPC Inc., TTS Drilling Solutions’ and Thru Tubing Solutions’ holding company.

Phillis points to his organization’s leading role in horizontal interventions, an area where it now offers the XRV, an anti-friction tool that uses fluidic modulation. “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.”

Besides saving time and offering better drilling control, other key XRV features include its ability to reach previously unattainable depths, along with a capacity to handle extreme chemical or thermal environments. Phillis believes that comes naturally to his organization since “deep horizontal work is where we really thrive.”

“We’re a very technically strong company. We develop our own tools and have a group of dedicated engineers

whose main focus is improving and expanding our service offerings to both the thru tubing and drilling industries.”

The XRV is a result of that process. First launched in the U.S., the product has been run internationally on coiled tubing for over a year. The XRV is the major driver in forming TTS Drilling as a separate, new drilling division in Canada.

Until recently, Thru Tubing Solutions had three shops in Alberta—in Calgary, Red Deer and Grande Prairie. (It serves northeastern British Columbia from Fort Nelson.) May 1st saw the opening of a new shop in Nisku, Alberta’s drilling hub, just south of Edmonton. This new 8000-square-foot, full-service facility will supply and service the XRV drilling tools.

Nisku will serve as the base for XRV

services, not only in Alberta, but also for the rest of Canada, including major plays in the Weyburn/Estevan area of Saskatchewan.

Founded in 1997 and headquartered in Oklahoma City, OK, Thru Tubing Solutions also has been active in Quebec and Atlantic Canada. So, Phillis observes: “We’re not just limited to Western Canada.”

The new Nisku facility forms part of an international network, which includes a company presence in key U.S. production areas, Mexico and as far away as China.

Since its arrival in Canada half a dozen years ago, Thru Tubing Solutions has seen its Canadian staff increase from three in 2006 to 60 today. Phillis fully anticipates that number to rise as TTS Drilling Solutions gathers momentum. The new

drilling division and Thru Tubing Solutions fully expect to draw upon the insight and experience of current and future Canadian staff to further that growth.

That, says Robert Phillis, is a natural consequence of the company’s approach to business and innovation.

“We always want to be on the leading edge of technology. We’re always looking at better ways to do what we do. That’s where surrounding ourselves with good people has always benefited us. It’s a group effort. We take pride in everyone having a voice and taking part in making improvements, suggestions and reviewing ideas. That’s how we continuously improve what we do and why we’re at the top of the game, not just here, but worldwide.”

The XRVTM is a downhole vibratory tool which creates an

oscillating axial force in the workstring. This oscillating

force helps combat friction between the drillpipe

and wellbore, which aids in moving the pipe

in the hole, reducing slip-stick, • Improved sliding and tool face

transferring weight to the control during steering operations

BHA and improves eliminates or decreases extra slide

tool face control attempts, saving time and improving overall ROP. during sliding.

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

• Rugged design is ideal for operation inside or outside the curve of horizontal wells.

FAST FACTS thru tubing solutions corporate office: T: 1.405.692.1900 Toll-Free: 1.855.252.5887 F: 1.405.692.1911 E: TTSinfo@thrutubing.com

WEBSITE: www.thrutubing.com

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Company Profile

triple random inc.

Going to great lengths

Triple Random services customers almost anywhere in Canada, as well as facilitating equipment movement to and from the United States.

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riple Random was founded in 2006 by a group of business partners with a vision of establishing a diversified specialized transport organization, based on customer service and integrity. The company caters to the needs and requirements of the heavy industrial construction, resource, manufacturing and up-stream and mid-stream sectors of the oil and gas industries.

As a means of realizing this vision, in 2006 the company acquired a small regional heavy-haul transport company with branches in Edmonton and Fort McMurray.

In the ensuing years, due to the internal growth and the acquisition of another transport company, Triple Random’s fleet and service capability expanded to include over 145 pieces of transport, construction, pipeline and material handling equipment.

The geographic range of services has also been further expanded to the point that, as a bonded highway carrier, the company extends services to customers almost 124

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anywhere in Canada, as well as facilitating equipment movement to and from the United States.

The Heavy Industrial Transport operations in Fort McMurray, due to its proximity to the oilsands, have grown to become a key component of Triple Random’s business. To better service customer needs in the heavy oil and mining industries, in 2009 the Company brought into service a 135-ton off-road heavy equipment hauler to transport on-site mine trucks and components, large dozers and other miscellaneous pieces of equipment. A second unit is in the process of being built and will be available for service in the spring of 2012.

To further its position as a specialized transport provider, in 2012 the company ordered and will be placing into service a number of multi-wheeled trailers including specialized 9-, 10- and 13-axle units, as well as 48-wheel and 92-wheel combination trailers.

A member of the Pipe Line Contractors Association of Canada, Triple Random also offers a range of specialized subcontract services to the pipeline industry including pipe hauling, stringing and stockpiling, as well as the mobilization and demobilization of pipeline equipment, materials and supplies.

Safety is a cornerstone of Triple Random’s approach to business. The company maintains a comprehensive Safety Program based on a positive behavioral culture subscribed to by all levels of management and employees. Based on leading rather than lagging indicators, the program is monitored and revised on an on-going basis. The company is associated with the Canadian Society of Safety Engineering and is a member of ISN Networld, CanQual Inc., ComplyWorks Ltd. and the Enform IRP 16 Registry.

Triple Random Inc. is proud to be part of Alberta’s Energy Solution.

Triple Random – Going To Great Lengths.

Triple Random’s fleet and service capability includes over 145 pieces of transport, construction, pipeline and material handling equipment.

FAST FACTS triple random inc. contact: T: 780.979.0717

WEBSITE: www.triplerandom.com

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Company Profile

Western Fiberglass Pipe Sales Ltd. The fiberglass advantage: faster, safer, lighter, longer lasting

V

ern Whitman founded Western Fiberglass Pipe Sales Ltd. because he believed that fiberglass pipe had great potential in the oil patch. That was in 1983. At the time, it seemed to him that the potential of this strong, lightweight, corrosionresistant product was being wasted—when it was not being neglected altogether.

He was convinced that fiberglass pipe would soon become popular, provided contractors learned to install it properly.

It was not long before he was proven correct. Service, good installation practices and quality control—and lots of hard work—built up the composite tubular service and supply company through the ’80s and ’90s. “There were late nights, with

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family members on occasion stringing pipe at midnight in order to fulfill delivery commitments,” says Red Deer–based technical sales manager Dallas Heintz, who has been with Western Fiberglass for more than 20 years.

Western Fiberglass continues to maintain its reputation for good products and service with the help of a rigorous quality control program. “This includes complete documentation of all aspects of fabrication and installation of pipe. Our field technicians travel with the pipe to the site. We use approved installation contractors,” says Heintz.

He says that the company’s logistics system and quality control enable it to supply

and service a region that stretches from the Yukon to southwest Manitoba. Western Fiberglass now has about 25 employees, roughly split between Red Deer and headquarters in Estevan.

The company is a stocking distributor of NOV Fiberglass Systems products, Smith Fibercast and the exclusive Canadian distributor of Star Aliphatic Amine line pipe and downhole tubing and casing.

It stocks perhaps the biggest inventory of fiberglass tubular products in the world. Also, its skilled employees and expert fiberglass technicians can fabricate both low- and high-pressure piping spools to exact dimensions.

“Nobody else has the in-house technical

“Fiberglass products can perform flawlessly in high-pressure cyclic applications, unlike spoolable poly-fiberglass continuouspiping systems.”

— Dallas Heintz, technical sales manager, Western Fiberglass Pipe Sales Ltd.

support or the size of inventory that we have,” says Heintz.

All piping and piping components at Western Fiberglass are 100 per cent non-metallic, consisting of a fiberglass filament encapsulated within an epoxy resin matrix. The markets and applications for the company’s products include pipeline facilities, tubing and casing, tanks’ internal piping, high-pressure spools, fiberglass liners and skimmers, among others.

Besides steel, fiberglass joints of pipe compare well against other potential competitors. “Fiberglass products can perform flawlessly in high-pressure cyclic applications, unlike spoolable poly-fiberglass continuous-piping systems. Unlike HDPE pipe,

it won’t collapse under a vacuum. Also, unlike HDPE, it’s impermeable, so no fugitive emissions,” says Heintz.

Western Fiberglass’s inventory of products, sizes and product lines covers a full range of applications. For instance, its Star Standard Design pipe is available with internal diameters from 1.5 to 12 inches, and can handle pressures up to 4,000 psi and temperatures up to 200 degrees Fahrenheit (94 degrees Celsius). Applications include flow, group, injection and gas lines, high-pressure, close-tolerance rack piping and fiberglass liner systems.

The properties and advantages of fiberglass products confer some special benefits when compared to steel, which

weighs several times as much as fiberglass.

Among them are lower shipping costs, less equipment needed for installation, less safety risk, no coatings required to prevent corrosion, and better flow characteristics, which means less horsepower required for pumping. “All this saves money and time,” says Heintz.

Sometimes, an outfit with a competitor’s product phones Western Fiberglass looking for technical support. “Our general preference is to support clients with our products. But we’ll service clients with products from competitors in the interests of generating new business. After all, service is how the company was built,” says Heintz.

FAST FACTS Western fiberglass pipe sales ltd. red deer: #128-375656 Hwy 2 Red Deer, AB T4E 1B4 T: 403.347.4682

ESTEVAN: #326 5 Street Estevan, SK S4A 0X9 T: 306.634.4950

WEBSITE: www.westernfiberglass.net

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Company Profile

xtra energy services Oilfield equipment rentals made to your specifications

X

tra Energy Services is an Alberta-based rental and manufacturing company that manufactures and designs highly innovative equipment to meet customers’ specifications.

Xtra Energy provides oil and gas production rental equipment as well as manufacturing design, specializing in high-pressure gas handling and fuel/waste-fired equipment, such as high-capacity, high-efficiency enclosed flares. Its equipment is designed to run safely, with minimal maintenance.

Xtra Energy first opened its doors as a rental company, renting completion and production equipment to well testing companies and oil companies. Its rental equipment includes high-pressure vessels for shale gas, line heaters, flare stacks, office trailers and generators.

“If well testing companies need a temporary P-tank or line heater, we can supply that,” says Xtra Energy president and co-owner Steve 128

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Kenneth. “We can rent our equipment to testing companies and provide extra testing packages to help them keep taking on all the work they can.”

Kenneth and his father established Xtra Energy two years ago. Kenneth’s background is in oil and gas well testing, while his father’s background is in fire and safety, gained during his time in the oil patch.

Xtra Energy’s assembly facility manufactures new products and repairs existing production equipment. The company is based in Red Deer with a Calgary sales office, and a new shop in Blackfalds is scheduled to open soon.

“Whether it’s gas, solids or liquids, we can design equipment for you,” Kenneth says.

The company’s biggest focus is now its incinerators. “We have come up with a design that is the quietest, puts off the least heat, and is the least offensive to the people and environment around it,” Kenneth says. Xtra

Energy’s high-capacity, high-efficiency enclosed flares are silent, efficient, cost-effective and reduce greenhouse gases. Solar power operation with a one-button start up allows for easy use and minimal setup time, with virtually no setup or operational costs.

Xtra Energy’s self-sufficient incinerator pulls air from the outside into its interior in order to burn gas more efficiently than a regular flare stack. On top of that, it causes no ground disturbance and is cost-effective to run.

“You don’t need a person to operate them on a day-to-day basis. You push a button, a light turns on for the ignition, and you can walk away and it will do the job by itself.

“Other than actually seeing the equipment, you don’t even know what it’s doing, it’s so quiet and efficient,” Kenneth says. “It burns so efficiently and so quietly, it doesn’t disturb anything around it. You can have a conversation when you’re standing beside it. It’s very

discreet, very environmentally friendly—and it has the bonus of preventing human error because it’s been designed so there is less risk of a spill or burning oil or fluids.” If there is any carry-over fluid, an overflow catch tank with digital tank gauges will contain the fluid before it enters the incinerator and burns it or causes a spill.

Since the incinerator is solar powered, there are no generators to set up and run, and no fans. “There is nothing to go wrong with the system. A product like our incinerator would be the best choice to have the least amount of downtime or maintenance. Especially with the summer coming up and drier ground, our incinerator is definitely designed to take away the risk of grass or any kind of dry debris lighting on fire. It’s clean, quiet and cool. You can stand next to it and you wouldn’t know it was running, it’s that cool. You wouldn’t

know it’s running other than seeing heat waves off the top.”

Xtra Energy takes safety seriously, and its machines have been designed with innovative technologies such as fluid safety catch-tanks to guard against incidental carry-overs, keeping workers and equipment safe.

Xtra Energy’s largest incinerator can handle 8 million to 10 million cubic feet of gas per day, which Kenneth believes is one of the largest capacities in the industry for a portable unit.

The largest incinerator unit is mounted on a 53-foot trailer towed by a tractor, which is owned by Xtra Energy. The smaller units are designed to be pulled by a pickup truck—so that customers can move an incinerator themselves from one well to another if they wish to handle their own transportation.

Xtra Energy provides a full range of design, project management and technical field service for its fuel and waste-fired equipment.

FAST FACTS xtra energy services PRESIDENt: Steve Kenneth T: 403.506.7654 E: steve@xtraenergy.ca

WEBSITE: www.xtraenergy.ca

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Company Profile

Arctic Boilers & FabricatiNG Ltd. Product knowledge and our customer relationships are always our priorities

A

rctic Boilers & Fabricating Ltd. was formed in March 2012, thanks to overwhelming response from our customers and support from our friends in the industry.

Our Goal: As a customer-focused, service-based company our goal is to provide and maintain a safe product for the oilfield industry.

Arctic Boilers & Fabricating Ltd. has a customer service–based team of eight. With over 20 years’ experience in the oilfield industry, our team takes the initiative and contributes ideas to find new, innovative ways to provide the best possible service. Product knowledge and our customer relationships are always our priorities.

Our team is who we are. The people we employ; the customers; the relationships.

Arctic Boilers promotes a friendly, professional atmosphere.

Arctic Boilers & Fabricating Ltd. is an ABSA Certified facility.

We provide: • Fabrication services for a wide range of products, including boiler buildings, genset & light tower buildings.

• Boiler sales—ranging from 25 horsepower and up.

• Parts for the oilfield industry—Power Flame, Fireye, United Brass, etc.

• 24-hour field service for all brands of boilers & parts • Over-the-phone troubleshooting Arctic Boilers & Fabricating Ltd. has an exciting year coming up and looks forward to implementing some new ideas. We have acquired a new facility to accommodate our growth.

FAST FACTS Arctic Boilers & Fabricating Ltd. PRESIDENT: Ken Skoreiko Operations Assistant:

Arlene Wiger

Our new location is: 2803 9 Street, Nisku AB, featuring an 18,000-square-foot building with four acres of land

Come and visit us!

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Shop Manager: Aaron Skoreiko accounts administrator:

Jennifer Drob

T: 780-267-0791 E: info@arcticboilers.com WEBSITE: www.arcticboilers.com

Company Profile

Calibre Drilling Ltd. Calibre Drilling’s specialized water expertise increasingly appreciated by petroleum producers

F

or Calibre Drilling Ltd., water is its main business, not a sideline. More than ever, it makes sense for petroleum producers to tap into real water-drilling expertise of the kind offered by the Spruce Grove, Alta., company.

“We have strong expertise in water wells since that is the main thing we do,” explains Calibre’s administrator Margaret Riedlinger.

“Our drillers are certified journeyman water-well drillers. That gives us an advantage in drilling water wells.”

With regulators and a sometimes-sensitive public looking on, oil and gas producers have become increasingly aware of the need for effective water management at and near

production sites. Hiring experienced water professionals makes more sense than ever.

Calibre’s effective multi-tasking is being recognized. Some of the water-well projects involve retrieving core samples while drilling the main hole for water. It is cost-efficient for oil producers to core at the same time as doing a water well.

Besides its water-wise personnel, Calibre also offers specialized equipment. “We’re constantly upgrading our equipment and looking for new technology to improve our productivity,” says Riedlinger. “For example, we now have a new triplex mud pump, which has enabled us to take on bigger projects.”

Work on SAGD projects in the Fort McMurray area currently represents a significant aspect of Calibre’s activity, as does drilling associated with cathodic protection, which, says Riedlinger, “is big in Alberta because there are so many construction projects going on in the province.”

Another area that Calibre has shown excellence is in the pre-setting casing projects, where due to the mobility of the rig and support equipment, lease-to-lease relocation has proven timely and costefficient. The company has been doing pre-sets and drilling wells for more than a decade, and has established an reputation for excellent service.

“The key to our success has been in diversification, and this has also helped us to retain conscientious and safety-minded employees,” says Calibre Drilling owner/ president Randy Riedlinger, who runs the business together with partner and operations manager Clay Cunningham.

Committed to providing cost-efficient and time-efficient services, Calibre is still first and foremost dedicated to working safe, which has proven to be another advantage. The petroleum industry is working hard to make incidents in the workplace less common, so companies that buy into a safe work ethic and make it a company culture have an easier time adjusting to the tight controls and requirements requested by leading oil producers.

FAST FACTS calibre drilling ltd. address: Box 4083, 431 South Avenue Spruce Grove, AB T7X 3B3 T: 780.960.2992

The company has been doing pre-sets and drilling wells for more than a decade, and has established a reputation for excellent service.

F: 780.960.6060 E: info@calibredrilling.com

WEBSITE: www.calibredrilling.com

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Company Profile

Diamond Drill Ltd. Diamond Drill continues growth with new shop expansion and extended product line

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iamond Drill’s bits have long been known in the field for their ability to handle the toughest demands and for setting new industry ROP benchmarks. Not content with one of the highest success rates in the industry, the company has set out to do even better for its clients.

It started with a recent big shop expansion.

“We brought in a lot of new equipment with cutting-edge technology that no other bit companies are doing,” says Chris Bath, Account Manager. “For instance, the CNC O.D. grinder, called the Nucleus, which is the first and only one of its type in Canada.” As always with its improvements, it was in response to listening to what clients are looking for: in this case, highly accurate and uncompromised true O.D. “The grinder is for quality control for our bits; it will bring the O.D. of our bits into precisely the right measurement,” explains Bath.

And they’re bringing in their own new line of roller cone bits. Some think roller cones are becoming outdated and phased out in favour of PDC bits, but Diamond Drill knows roller cones’ time isn’t up yet. They know the market; roller cones still have an important role to play. “While PDCs are generally more cost-effective for both the bit company and

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the oil company, there are some formations that are not PDC-drillable,” says Bath. He explains the roller cones’ edge.

“A roller cone is pretty much called tri-cone; it’s got three cones on it,” he says. “Rather than slicing through the earth, those cones kind of bash through it. They are older technology, but they are still the strongest and toughest bits.” As PDCs gradually get tougher, he says, they may eventually eliminate roller cones and completely take over the market, but not just yet. “Roller cones may be slower and PDCs are faster, so if you can run a PDC you will,” he says. “It’s just whether you can.”

Diamond Drill has run some in the field already. “Within the roller cone world, there are two kinds: a tooth bit and an insert,” Bath explains. He says they have field tested tooth bits on several occasions with excellent feedback from drillers, and testing on inserts is to be underway in the near future.

For the build section of wells, Diamond Drill has another new offering. “One of our latest PDC launches is a new matrix bit,” says Bath.

Although the company already offered matrix bits perfect for every application, including the most abrasive and hard rock applications,

they heed client feedback. Working with customers prompted the new bits, which add further shoulder protection. They’re offering two versions, designated B45BR and B46BR. “We had seen some wear and tear along the shoulder of the bits, so talking with our customers we added further protection in the form of brutes—hence the BR designation,” explains Bath.

With the new service and lines, Diamond Drill will be able to continue its growing rate of penetration into the marketplace, from northeastern B.C. to southwestern Manitoba.

FAST FACTS DIAmond drill ltd. address: 101 - 26230 Twp Rd 531A Acheson, AB T7X 5A4 T: 780.960.0666 Toll-Free: 1.866.960.0666

WEBSITE: www.diamonddrill.ca

Company Profile

Hotsy Cleaning Systems Providing made-to-measure solutions for the oilpatch

Stationary shop unit

H

Customized 40' sea can with recycle equipment

the Storm King line of parts washers and dip otsy is the leading provider of CSAtanks. Automatic parts washers are like approved pressure washer equipment industrial dishwashers—load it, turn it on for more than 40 years and is cleaning and walk away. Many different models of up Alberta’s oilpatch, mines, construcautomatic parts washers allow a diverse tion sites and transportation industries. base of customers from small machine Water Blast Manufacturing, operating as shops to larger refineries or plant facilities.

Hotsy Cleaning Systems, is the Alberta and The Storm King line of dip tanks allow BC distributor of Hotsy industrial pressure cleaning with caustic solutions, unlike the washers, a name synonymous with high detergent-based parts washers, and are quality equipment and an industry standardcustomized to any specification. setter. Hotsy’s line-up of more than 100 While customization is important, Smith models allows a wide range of options— stresses, “We really build our business on including power sources of diesel, natural gas service. We offer a rugged product and and electric. Pressure washers vary in size, superior after-sales service. In the oil and gas starting from modest models suitable for industry, if the pressure washer is down and acreages to severe-duty water cannons used they can’t get their equipment into service in the mining industry.

Water Blast Manufacturing customizes Hotsy pressure washers for specific applications such as mobile cleaning, which include truck, trailer or skid mounted units. “Mobile industrial washers are big in the oil and gas industry,” explains Water Blast Marketing Manager Kathy Smith.

“We can provide everything from enclosed trailers to steam trucks, to mobile sea cans.”

Water Blast Manufacturing carries out customization at its 60,000-square-foot Edmonton plant, which also manufactures Skid-mounted unit

there’s a big problem. It is very important to us that we service them fast.” Mobile service trucks are constantly on the road and are just a phone call away.

As part of ongoing service improvement, Hotsy now offers scheduled maintenance inspections that help extend equipment life and reduce unexpected repair bills through pre-set checkups.

Water Blast Manufacturing is proud to stock North America’s largest inventory of pressure water parts. Most parts are always in stock and expedited delivery is available to ensure equipment is up and running fast.

Entering into environmental solutions, Water Blast is the distributor of WaterMaze water recycling equipment. For industries using large amounts of wash water, the WaterMaze system recycles pressure washer wash water.

Specializing only in cleaning equipment, the long-term sales staff at Hotsy offers valuable expertise in choosing the right equipment for the right application. Their expertise shines through, says Kathy Smith, when working with engineers in the design stage of industrial wash bays to customizing cleaning systems or simply recommending the right equipment based on a customer’s requirements.

Hotsy branches are located in Edmonton, Calgary, Red Deer, Lethbridge, Grande Prairie and Langley, BC, including at its new and expanded shops in Calgary and Red Deer.

For more about Hotsy Water Blast, please check videos accessible online (including via smart phones) at www.hotsyab.com.

FAST FACTS Hotsy cleaning systems T: 780.451.4521 Toll-Free: 1.800.328.1555

WEBSITE: www.hotsyab.com

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Company Profile

Nu-line pipeline services inc.

Drying pipeline is a leading specialty niche for Nu-Line Pipeline Services of Edmonton

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ong-time oil patch entrepreneur Ken Ryalls remembers in the 1980s when the first pipeline was built from the Joffre chemical complex near Red Deer to carry ethanol to Fort Saskatchewan. That was when he spotted a service business niche: pipeline drying.

“When they built the plant in Joffre it was to take some of those chemicals and things to send up to Fort Saskatchewan,” he recalls.

“That line had to be dried. So we built a dryer.”

He started up his own company using his special dryer design, and found a company in Nisku “to build some dryers for me the way I wanted them, and that’s what I’ve been using ever since.” He’s now Vice President and General Manager of the company, called Nu-Line Pipeline Services Ltd., along with partner Roy Mulawka, who is President.

“I did the first drying job that was ever done in Canada,” Ryalls says. Pipeline drying is still their leading service niche, but Nu-Line does pipeline testing and cleaning as well. He explains the importance of correct pipeline drying. “All these gas lines built by ATCO and the other bigger companies, they test them with water and we have to get all the water out and dry it so they can put the gas in,” he says. “Because they can’t put wet gas in

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there; it’s liable to freeze up somewhere and cause a lot of problems.”

For drying operations, they use ‘poly pigs’ made of Styrofoam, built to Nu-Line’s precise specifications by Nisku manufacturer Quality Polly Pig Ltd. A drying job takes from one to 10 days depending on size and length of the line, says Ryalls. “We run about four of those poly pigs per kilometre of line to wipe it dry,” he explains. “They’re spaced a-ways apart; we put a couple in at a time, run them 10 or 15 minutes down the line, then a couple more just a short distance apart.” After the moisture is out, there’s a final brush or two to eliminate any dust. “It takes a lot of air to do that—we’ve got 1,600 CFM compressor and dryer units.”

So what’s the secret of Nu-Line’s success? “Well, I’ve been around longer than everyone else so I know what I’m doing, that’s one thing,” laughs Ryalls. “It has got to the point where one of our customers somewhere says just phone this number and ask for Ken.” He says his customers have included new engineers who have never dried pipe before. “They don’t know what the hell to do,” he says.

Going forward, Ryalls is eyeing new gas pipeline infrastructure, which will be

supplying product to the Kitimat LNG liquefaction plants now on the drawing board. “If they get these lines running to the west coast there’s a big gas line going to come out of northern BC,” he says. “As a matter of fact I bid on some lines just recently: 48-, 42- and 36-inch lines that are going to be hooked up to that system. Then, when they get that main line built they will be all hooked into it.”

Which all looks promising for even more satisfied Nu-Line customers. “I have a lot of happy clients,” says Ryalls.

FAST FACTS nu-line pipeline services inc. primary address: 4415 211 Street NW Edmonton, AB T6M 2P3 T: 780.444.5775 F: 780.444.5816 E: nuline@ocll.com

Wind direction indicators to the world

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hat started out as a ‘mom and pop’ business run out of a basement has grown into a company that supplies products to most of the major oil and gas companies in western Canada, off-shore eastern Canada and countries around the world.

While working as a chemical pump rep at Dominion Oilfield Supply in the late 1980s and early 1990s, Jack Read saw first-hand what type of wind direction products were available and he knew he could design and make a better product.

No longer president of Panama Enterprises (1990) Inc., but still the owner of the company, Read says, “My wife would sew the windsocks and I would weld the frames for them. Then, with permission from Dominion, I would sell my windsocks and frames when I was on the road for them.”

Located in Edmonton, Alberta, Panama Enterprises has been in business for over 15 years. The company manufactures industrialgrade windsocks and frames and is the sole Canadian distributor of Morgan Products’ chemical injection pumps.

Panama Enterprises manufactures each windsock individually with specific attention to detail. Detailed features include superior

polyester fabrics for durability, double seams for long life, grommets and hog rings as attachments to provide positive grounding, and consistent sizing to ensure replacement windsocks will fit existing frames.

Windsock frames are available in sizes ranging from 5 1/2 inches to 36 inches in diameter. Most frames come with enclosed bearings which provide positive grounding, protection from extreme weather and a smooth rotation in both directions. In the case of a hazardous chemical or gas leak, even a small breeze will provide indication of air flow direction and velocity.

“Our windsocks are manufactured with the most weather-resistant fabric to prevent static build-up in hazardous applications, which are paired with our grounded metal frames. This combination ensures that the safety device is positively grounded to a pole or a building to reduce or eliminate static and/or sparking. We design our windsocks in the truncated [cone] shape as recommended

by Transport Canada,” says Read.

Not only was Read making and selling windsocks, but when Morgan Products needed a Canadian distributor in 1997, Read liked the design of Morgan Products’

chemical injection pumps, and that’s when Panama Enterprises’ distribution relationship with Morgan Products began.

“Morgan’s no-leak design makes their pumps a viable injection option for the oil and gas industry. With Panama’s support, field operators and maintenance supervisors learn how to ensure successful operation of these pumps,” says Gerry Read, general manager.

Morgan Products’ HD Series injectors pump methanol, corrosion inhibitor, bleach, de-waxer and odorant into pipelines, down hole tubing and casing strings, and vessels.

All pumps are manufactured to meet all specifications of Canadian regulations, oil and gas industry applications, and extreme weather conditions.

Still family-owned and operated, Panama Enterprises prides itself on its availability to its customers. “Whether it’s timely delivery of our windsocks and frames or our sales and service of Morgan Products’ chemical injection pumps, our staff are always available to assist our customers,” says Read.

Read says, “I am very proud of the fact that my wife and I started this company and we have been able to supply products and services to an ever-expanding oil and gas industry. We have adapted to our customers’ changing needs over the past couple of decades, and I’m proud to pass this flexibility onto my sons.”

Read’s other son, Dean Read, says, “Taking over as president of a company that my parents started many years ago required me to honour and protect the hard work they put into creating a viable business and making sure the Panama Enterprises name and the products we sell and the services we offer are of the highest quality.”

FAST FACTS panama enterprises (1990) inc.

WEBSITE: 11850 149 Street Edmonton, AB T5V 1P2 T: 780.452.5757 F: 780.452.5767

WEBSITE:

www.panamawindsocks.ca

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Company Profile

panama enterprises (1990) inc.

Company Profile

team snubbing services inc.

Team Snubbing Services finds its niches and fills them

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t has become cliché that necessity is the mother of invention. A decade ago, well before natural gas prices started plumbing their present depths, Team Snubbing Services of Rocky Mountain House latched on to a new idea. “In our basin [the Western Canadian Sedimentary Basin] 60% of the gas wells are low pressure,” says Jeff Redmond, General Manager. “So rather than bring in a big unit, we developed a smaller unit for less impact on the environment and quicker rig-up time to look after the lower pressure stuff at a lower cost to our customers.”

What they developed in response to the oil and gas industry’s needs was a more cost-effective snubbing technology optimized for requirements at 7,000 KPA with 2–7/8" production tubing and up to 12,000 KPA with 2–3/8" production tubing. Larger OD pipe could be handled too.

Team Snubbing says its Rig Friendly Stand push-pull unit is the answer to the neverending battle of snubbing out drill pipe and snubbing in production pipe. That can now be completed on the drilling rig floor. Despite its compact size, it packs a powerful snub force—69,000 pounds, making snubbing more versatile and economic. “The push-pull units are our own little niche,” says Redmond.

“We are the only guys in the world with them—they’re patented worldwide.”

The company’s RS units are common in the industry, “but with our designs and technology we are farther ahead than 99% of the competition,” says Redmond. Based on the reliable tubing stripper technology of its RS100, the company’s Mini Brutus has the ability to move tubulars quickly and safely in and out of the wellbore during servicing. For underbalanced drilling, the Mini Brutus is a three-way boon: it’s ideally suited for drilling, stripping or snubbing through.

Redmond says their edge is customer service and pricing. “We come in with a two-man crew rather than a six-man crew and do the exact same thing in a day where it takes the other guys four or five days.” The numbers tell the story: pricing is typically 25–40% less than large snubbing units.

Twenty to thirty minute rig-in and rig-out times are the norm. Further advantage contributing to quicker times—when a snubbing operation

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is pipe heavy—is gained by performing pipe tripping and re-entry at rig speed for ease of operation at all depths. And it’s all done with safety paramount; they’ve had no lost-time accidents for five years.

With natural gas prices down, the company is again adapting to market realities and fresh niches. “We have switched over to SAGD with our push-pulls,” says Redmond. “That industry is going huge. We are using our units to push the consumer’s pipe into the bitumen in less time and less strain on the pipe and in about a third of the time as what they can get in with a drill rig.”

It’s an ideal new direction for Team Snubbing and its SAGD clients. Streamlining that niche is the company’s two heli-portable units, which can deal with muskeg. “We are the only ones in Canada with these heliportable units,” says Redmond. “We have saved a couple of oil companies with getting their wells completed before the rains came.

Their wells had sloughed in; we cleaned those up for them.”

FAST FACTS team snubbing services inc. address: RR2 Site 4 Box 35 Rocky Mountain House, AB T4T 2A2 T: 403.844.2728 F: 403.844.2148 Toll-Free: 1.888.898.7682

WEBSITE: www.teamsnubbing.com

Knows pressure

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n Alberta, pressure testing is just one of several requirements that fall under the Energy Resources Conservation Board’s Directive 036. These regulations are in place to keep the drilling personnel and equipment, nearby property and the environment safe.

Craig Crawford, Jeff Pouteaux and Jim Jammer know the importance of drilling safety. The three men created Victory Pressure Services to provide pressure testing that exceeds the minimum standards as set out in Directive 036. “We make sure that all the parts of a rig needed to prevent an incident work properly,” says Crawford.

Victory Pressure Services is a pressure testing company that provides pressure testing as well as pressure pumping that includes setting packers, pipeline pressure testing, low rate cement squeezes, formation integrity tests and other pressure pumping services. Headquartered in Edmonton, Alberta, Victory Pressure Services provides services from central to northern Alberta and northwestern Saskatchewan.

Crawford says, “We fill the gap between a pressure tank truck and a large oilfield services company. We are less expensive than large service companies but more skilled than the average person who owns a pressure truck. We have more resources

available to us in the form of propylene glycol and water and methanol sales and rentals, gauges, dead weight rentals and analog and digital recording systems.”

Key staff at Victory Pressure Services includes Crawford, CEO, who has 23 years of experience in oilfield services. Crawford worked his way up from driver to station manager of a large oilfield services company.

For the past 12 years, Crawford has managed a pressure testing company where he designed and operated most of the company’s equipment and procedures.

Pouteaux, operations manager, comes from the drilling sector. He brings with him 18 years of drilling experience coming up the ranks from roughneck to drilling rig manager.

And Jammer, fleet manager, is a heavy-duty mechanic with over 24 years of experience, working the last seven of those years for large oilfield services companies. Jammer brings a wealth of knowledge to Victory Pressure Services in equipment design and maintenance.

In addition to the diverse knowledge that the company’s key staff bring, Victory Pressure Services also offers its customers new equipment that outperforms dated equipment.

“With the popularity of multistage, hydraulic fracturing comes the need for equipment that

can set the isolation packers. We have units that can do this job,” says Crawford.

Victory Pressure Services has eight units, which include small, onetonne, four-wheel drive units capable of up to 35,000 kpa pressure tests; larger, two-tonne four-wheel drive units capable of up to 105,000 kpa pressure tests; and mid-size, four-wheel drive units capable of up to .6m3/minute and 70,000 kpa pressure tests. “Because we are building our own equipment for pumping services, we are able to provide our customers with better-designed equipment, which results in the jobs being completed quicker for less money.”

Victory Pressure Services recognizes the importance of safety in the industry. “Our company is safety-driven. We work with high pressures on a daily basis so all our employees must be properly trained. When we are conducting pressure tests, we are protecting lives, equipment and property,” says Crawford.

Victory Pressure Services has big goals for the future. The company plans to double its fleet of units, develop a BOP pressure testing training course (which is expected to set the standard for operators) and create a pipeline pressure testing division. “With a diversely experienced staff, new equipment, and safety-driven principles, we can provide our customers with pressure testing services that result in better test results, which is a great advantage to our customers both in terms of cost and service,” says Crawford.

FAST FACTS victory pressure services contact: T: 780.298.8378 Toll-Free: 1.855.955.8378

address: 12029 106 Street Edmonton, Alberta T5G 2R5

locations:

Edmonton, Slave Lake, Grande Prairie, Whitecourt, Lac La Biche, Fort McMurray

ceo: Craig Crawford T: 780.803.8882 E: ccrawford@gmail.com

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Company Profile

Victory Pressure Services

Company Profile

Willy D Boilers and Fabricating Ltd. Fabricating and serving boilers across North America

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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 trouble shooting 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 oil patch, 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

WEBSITE: www.willydboilers.com

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From our beginnings, Spirit Pipelines has focused on recruiting and retaining the industry’s best workforce.

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Trust your project to our elite team—we will deliver.

780.352.7305 spiritpipelines.ca

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