Oilfield PULSE Issue 2 by Leadstone Group Inc.

PUBLISHED BY

SPONSORED BY

PUBLISHED BY

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The Road to Preferred Vendor Status is Steep Whether you are an experienced industry player or new entrant in the energy sector, cracking into wellestablished supply chains is a difficult and time consuming task for many service and supply companies. Who do you talk to? What products are they interested in? Where are your services needed? When is the best time to approach a potential customer? Why do they want to do business with you? In speaking with potential Oilfield HUB members, we often re-live the time and effort that each of them has invested generating solid leads and new business opportunities. The road to achieving ‘Preferred’ vendor status is remarkably similar for everyone. We are all continually talking with people, dropping off brochures, sending out e-mails, making calls and schmoozing at industry events and trade shows. Getting top shelf exposure can be particularly difficult when your office is located in a geographically remote city like Fort St. John, Grande Prairie or Wilcox, while most of your customers are based in Calgary. Despite your best efforts, you find that you are still not receiving calls from contacts when they need something that you sell.

Joining the ever growing Oilfield HUB community provides our members with the unique opportunity to promote every product and service they offer, along with their key contact personnel. When Operators are searching for products and services that you provide, whether you are a preferred vendor or not, your company information is provided in their search results. As a member of Oilfield HUB you selfmanage your vendor profile, for the benefit of your existing customers and potential clients. This means Operators are viewing the most current and accurate information that you are promoting in your HUB Microsite, making it easier for them to find the products and services they need, exactly when they want to buy!

So how do you get noticed? When an existing or prospective customer calls up a list of their preferred vendors to call someone about a product or service, how does your company get onto that list? Better still, when a potential customer wants to send a bid request electronically to a wider selection of potential vendors, how do you make sure that your company is included in this opportunity? If your business card isn’t the one stuck in the visor of your customer’s pickup truck or the latest addition to his or her rolodex, you may not get that call. If you have managed to crest this steep slope and you do get to the top of a preferred vendor list, then you’ve got it made -- at least with that client. But that is not good enough!

But what if you still want more? Have you tried advertising? Oilfield HUB offers several unique marketing and advertorial packages to round out your membership with an advertising strategy, big or small, with the added support of our Leadstone creative marketing team. Advertising your products and services in Oilfield PULSE keeps you in front of potential buyers and decision makers during good times and bad. Oilfield PULSE ads land in the Inboxes and on the desks of industry decision makers every month – placing our advertisers and Oilfield HUB members in front of your prospective customers. We will direct your ad to the right people - your potential buyers - via our Leadstone target marketing system.

How can Oilfield HUB help? In boardrooms across Western Canada, companies struggle with the most effective way to spend their sales and marketing dollars to achieve the greatest possible return. Many of these companies are turning to the one-two marketing punch of Oilfield HUB and Oilfield PULSE to increase their exposure in the energy sector and crack preferred vendor lists. With Oilfield HUB, you’re not three pages back in the address book or business directory; you’re on screen, just an inch or two below their typical first pick.

Becoming a part of the Oilfield HUB community can give you a powerful one-two marketing punch that will help you crack your next preferred vendor list!

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Written By: Kevin Turko, Owner and CEO of Leadstone Group.

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Country Cousins - Not!

Way back in the day, the Albertan had an editorial cartoonist named Sid Barron. Sid captured the day- today foibles of Calgarians in painstaking detail and almost every office in downtown Calgary had a Barron cartoon on a tack board somewhere on the premises. Each detailed cartoon dealt with some local situation and invariably had a biplane in the background towing a banner that said, “Aren’t the Mountains Pretty Today?”

Jim Graham, Publisher of Oilfield PULSE. A Barron cartoon is a snapshot of the city’s history and one that always comes to mind, when I think of Sid, is one picturing a number of people at a party, who are facing a couple isolated in the middle of the floor in front of them. The hostess, who is pointing at the pair, says, “This is the couple I told you about. The ones who are actually from Calgary!” Being a Calgarian by choice, I often ponder that cartoon and, considering the time and the place, surmise that most of the couples in that cartoon were from Saskatchewan. This edition of Oilfield PULSE is dedicated to that stalwart province next door; a province that has supplied the oil and gas industry with movers and shakers such as the Seamans brothers, Walter Dawson, Frank Bennett, Al Schreiner, Art Dumont , Bill Mooney, Bud McCaig, Scotty Cameron and Dan Claypool, a Hall of Famer who hails from the same part of Saskatchewan that I do … the Coteau Hills. Saskatchewan has contributed to the Canadian experience with sporting figures such as hockey stars Gordie Howe, Johnny Bower, Sid Abel and the Bentley

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brothers, NFL running back Rueben Mayes and Olympic gold medalists Hayley Wickenheiser and Catriona Lemay Doan. Representing the arts; Actor Leslie Nielson, singer/ songwriters Joni Mitchell and Buffy Ste Marie, tenor Jon Vickers, sculptor Joe Fafard, journalist Allan Fotheringham, TV host Art Linkletter and author W.O. Mitchell to name but a few; I have many more but a limited amount of space so I’ll let the aforementioned individuals represent the province’s contribution to the nation and the world.

I rarely quote Richard Nixon but one of his axioms is apt when referring to the people of 20th century Saskatchewan; “The finest steel goes through the hottest flame.” Turn of the century farming methods delivered prosperity to the province (with bumper crops in the teens) but the combination of a financial depression and a crippling drought in the thirties forced many families to abandon their farms as dry topsoil was picked up by the wind and

hurled skyward in tall columns of dust that W.O. Mitchell called airborne real estate. Popular historian Pierre Berton has written that the combination of drought and economic distress made the province the hardest hit area in North America. To encapsulate the suffering and anguish of those dismal years in several sentences would trivialize them but, I believe that Pierre Berton’s book, “The Great Depression 1929 -1939” and Barry Broadfoot’s “Ten Lost Years 1929 – 1939” should be required reading for all Canadians. So, when the Roughriders come to town to play the Stampeders, restrain yourself from making fun of their watermelon hats and green face paint and remind yourself that you are looking at representatives of the next major player in the Canadian energy industry.

I knew that it was just a matter of time.

When giving a presentation be passionate and exciting: Most presentations are BORING! So create a show and make it exciting. Excitement is contagious – just like a yawn.

Rules of the Road

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Advantage Products: IMITATED BUT NEVER EQUALED One reason Lloydminster is the capital of heavy oil production is the incredible innovation by companies like Advantage Products Inc. and its principal, inventor Jim Weber.

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Alberta has been a beehive of technical creativity for decades. If an oilman couldn’t buy the tool he needed for a job, he looked around for a local machine shop or one of his rig workers that was handy with a welder and had it made. The Foothills Industrial Park in Calgary and the manufacturing areas of Edmonton, not to mention plenty of small manufacturers scattered throughout the province, are a testament to the inventiveness of the Alberta oil patch. But no region has depended on innovation quite like Lloydminster. For starters, heavy oil is so viscous that just getting it out of the ground is a challenge. How viscous are we talking about? The consistency of ketchup - or worse. Pumping ketchup with a typical downhole pump and pumpjack is just not a paying proposition. Enter the progressive cavity pump, commonly called the PC pump or screw pump. Or if you’re French, like PC pump inventor René Moineau, you might call it the Moyno or Mono pump. Whatever you choose to call it, the PC pump enabled the development of heavy oil fields. Jim Weber estimates there are 100,000 PC pumps in use the world over, most of them in Canada, but a fair contingent in the heavy oil fields of Latin America and, to a lesser extent, in the United States. That’s a big market if you’re developing new technology for the PC pump, which is what Weber has been up to since 1986. As is often the case with inventors, the spark that lit the innovation fire was trying to fix a problem that really required an entirely new approach. A decade ago Weber and the Advantage team tried to develop a braking system for PC pumps. Brakes are necessary because if there is an interruption of power to the pump, the weight of the fluid in the pipe string causes the motor to turn in the opposite direction as the fluid drains back into the reservoir. Backspin

can cause a drivehead to overspeed, with potentially catastrophic results. The consequence is lost production and lost revenue for the producer. Weber quickly realized that the basic design for driving PC pumps was the culprit. The wellhead drive consists of a gearbox or belts and sheaves a sealing system, a brake, and a connection for the polish rod. Power for the drive is either electric or hydraulic. Connecting the drive to the pump required belts and sheaves or gears, systems that sometimes broke under the strain of the backspin.

One solution is the direct drive, which did away with the belts and pulleys. Direct drives also permitted the use of variable speed control, enabling producers to easily choose the speed and torque applied to the pump.

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But in 2003, as far as Weber was aware, no one had designed a direct drive drivehead for a PC pump. So he and his team set out to come up with an ideal design, one that currently uses permanent magnet motors. These types of motors use high flux magnets made of rare earth metals. The result, according to Weber, is the best direct drive yet and the solution to many of the problems currently plaguing the PC pump industry. The PULSE sat down with Jim Weber to talk about his new top drive, which Advantage plans to debut at the Lloydminster Heavy Oil Show in September. PULSE: What’s innovative about Advantage Product’s new Torque Drive? JW: Around 2003 we started developing a braking system for PC pumps that could be retrofitted to work on all drive heads, since that has always been the real issue, breaking drive heads during backspin. And the further we got into it, the more we realized we have to just develop a completely new technology and do away with the need for braking. So several years later we have something called the TorqDrive, a permanent magnet motor. Generation 2, which we’ll be showing at the Lloydminster Heavy Oil Show, is half the size, half the cost, half the weight, and more efficient than the previous generation. The Torqdrive is a top drive designed to eliminate belts, gears and sheaves. You can speed them up with constant torque from minimum 30 RPM right through the maximum designed running speed, which is currently 500 rpm, and it’s over 97 per cent efficient, 97.9 to be exact. No one can touch that efficiency. No other competitor, as far as I know, can get close to that efficiency.

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Another advantage will be ease of use. Our intention has always been to make this drive very user-friendly. Variable frequency drives lets the operator speed up or slow down by pressing arrow up and arrow down on the interface. Really simple. We are also quite excited about the possibility of replacing hydraulic drive units. The Torqdrive can do the same amount of work with a much smaller environmental footprint. It’s also far more efficient. Small block V8 engines driving hydraulic, pumps driving a hydraulic motor are very effective, but they’re very inefficient. And they also need to be repaired often. Our Genset and Torqdrive combination will be able to replace that unit without any major maintenance other than changing oil in the electric motor. We’re very close to the final Torqdrive design. As with most new products in the oil patch, we need to get some more in service. We have nine in the field at the moment. We have had some issues with Generation 1, but they were primarily quality control issues. The design is solid. We had one drive head on for over a year without any issues at all, turns out that that may have been a lucky accident. Because we have had some major issues with quality control with Generation 1. It’s a bit of a struggle to keep them running, but as far as we know that customers are reasonably excited about that technology. PULSE: Are competitors working on something similar? JW: We have competitors who are pursuing this avenue, but as far as we know, we’re considerably ahead in development because we’ve been out at longer. They don’t have the efficiencies or the RPM range yet, either.

The Torqdrive is the only product in our company that there’s no patent associated with. And I have no intention of doing any patent work on that, because it appears that patents are all merely an invitation to a lawsuit. The big dog around Lloydminster has taken several competing products and encouraged competitors to infringe on patents. They were all lower cost, but they failed. Our equipment doesn’t fail. It stays in a while. Our torque anchor, for instance, is good for repeated runs in the well without any type of service at all and is by far the most rugged, robust torque anchor on the planet.

Our intention with the Torqdrive to be the first in the market place and penetrate the market more effectively than the competitors and stay ahead of the pack. We will be very competitive on price point as well. With the current technology, we will be very competitive with the current Induction motor technology, gears and pulley - they are currently low cost. We intend to be the low cost option for the engineers. Generation 2 of the Torqdrive will be displayed at the heavy oil show. Two versions of the Generation 2 will be displayed and we hope we to have them operational, at least spinning. PULSE: How far away are you from commercial production? JW: We anticipate full commercial production during the first quarter of 2013.

PULSE: I noticed in your website, there’s a fair amount of and research and development in the testing, can you talk more about that aspect of your company. JW: My founding partner and myself, our philosophy is if we can’t break it, it should be good enough to for the customer. Because their business is producing oil, it’s not repairing and maintaining equipment. Our intention has always been our philosophy to provide the most rugged, robust dependable equipment possible. We developed the TorqStopper to generate enough revenue so we could develop all the other ideas that we had in the pipeline. I’m quite happy to stand on my record with the TorqStopper, as the original inventor of torque anchors. It still has the lowest cost of ownership of all the competitors put together. They were all lower cost but they failed. Our equipment doesn’t fail. It’s good for repeated runs in the well without any type of service at all and is by far most rugged robust, torque anchor on the planet. The final design for the TorqueStopper design has not changed since 2001 nor have the prices. The TorqStopper has, by far, the lowest cost of ownership due to its extremely robust construction. The TorqStopper has been imitated but never equalled. Written By: Markham Hislop, Contributing Editor

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PULSE: Will you be manufacturing it yourself? JW: We will be in full control, 100 per cent of the manufacturing process. All assembly and testing will happen in our plant in Didsbury, Alberta. PULSE: Have you got any commercial contracts lined up yet?. JW: We do not, at this point, it would be premature. We want to prove our worth and we are confident we’ll do that. But I do anticipate large orders likely by the end of the second quarter 2013.

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Saskatchewan:

Where Real Growth and Real Opportunity Reside

There’s a new spirit of confidence infusing Saskatchewan these days. In a few short years, our province has become an economic leader in the nation. More people are living and working in Saskatchewan than ever before, and capital investment is at record levels. A new “can do” attitude is in play, as our citizens and investors from far and wide work to realize the real growth and real opportunity that our province affords.

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Our province is in its enviable spot in large part because of our people and abundant resource base. Nations around the world are looking for energy security and food security, and Saskatchewan is well positioned to deliver on both.

Consider the facts. Saskatchewan accounts for roughly a quarter of Canada’s primary energy production, including coal, oil, natural gas, hydro, uranium, wind and biofuels. We are the world’s largest producer of potash, and have almost half of the world’s reserves. We are the world’s second leading producer of uranium, and our Athabasca Basin contains the world’s largest, high-grade uranium deposits. And we have half the arable farmland in Canada.

to the province in oil and gas royalties and bonus bids. Our government is working hard to keep our oil industry and our other key industries growing. We offer stable and competitive royalty and tax regimes. We apply high standards for environmental protection, sustainability and safety. We have a skilled and motivated work force. And we are on the leading edge of new industry research in areas such as enhanced oil recovery and carbon dioxide capture and storage. Saskatchewan is a great place to live, raise a family, work, do business and invest. From canola to potash to oil, we have the resources the world needs and we offer a clear advantage – the Saskatchewan Advantage – to those who choose to build their futures with us. Brad Wall, Premier

Of course, Oilfield PULSE is a publication devoted to the oil industry, and Saskatchewan is very much oil country. We are the nation’s second-largest crude oil producer and the sixth largest oil producer amoung all American states and Canadian provinces. And we are Canada’s third largest natural gas producer. We have over 40 billion barrels of conventional oil in place with exciting opportunities in heavy oil as well as the Bakken Formation and other tight oil plays. We also have oil sands potential. The Bakken is not our province’s only “hot” oil play, but it garners a lot of attention and for good reason. We are now producing nearly 69,000 barrels per day out a roughly 2,100 wells in Saskatchewan’s portion of the Bakken. Thanks to the application of new technology, our production has jumped from about 230,000 barrels in 1993 to over 22 million barrels in 2011. The oil and gas industry is a significant contributor to the province’s bottom line. Our annual oil and gas sales totaled almost $13 billion in 2011 with approximately $1.7 billion paid

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MEMBER ANNOUNCEMENTS

MEMBERS AT LARGE

ZEECO Since 1979, Zeeco is the trusted source in the design and manufacture of combustion and environmental solutions for the refining, petrochemical, production, power and pharmaceutical industries worldwide. Zeeco was a proud participating exhibitor of the 2012 Global Petroleum Show. Our opportunity to network with current and potential new customers played a positive role in our continued success and excellence in engineering, reliability, and integrity. It is Zeeco’s philosophy of providing customers with superior quality, on-time shipments and competitive pricing that is the cornerstone of our success. Zeeco is the worldwide leader in combustion solutions. Our product lines include ultra-low emission burners, gas and liquid flaring systems and hazardous and nonhazardous waste incineration. Zeeco’s Combustion Research and Test Facility was the first in the world to become ISO 9001-2000 certified, and our staff strives to stay ahead of rapidly changing emissions requirements. Zeeco’s corporate headquarters are located near Tulsa, OK, USA, with additional office locations in Calgary, Alberta, Canada; Houston, TX, USA, Plainville, CT, USA; Stamford, UK; Seoul, Korea; Mumbai, India; Yokohama, Japan; Moscow, Russia; São Paolo, Brazil; Al Khobar, KSA; Milano, Italy and Sydney, Australia. Written By: Brian Pitchford Sales Director, Canada, Zeeco Inc.

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GLOBAL OUTSOURCING 4 YOU Global Outsourcing 4 You is offering a business strategy for Small to Medium sized businesses that will benefit any company in lowering their cost, increasing their customer experience and creating a major competitive advantage. We always need to hire locally so we can service our customers but if the work is being done on the phone, computer or internet, then a hybrid business strategy is where businesses will need to position themselves when hiring for the future. Not only to benefit from the reduced costs that go hand in hand with Outsourcing but also the shortage of manpower that we are experiencing in Canada right now.

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Custom Software Applications for the Oil and Gas Industry SaaS Enablement Services

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MEMBER ANNOUNCEMENTS MCI SOLUTIONS - OILFIELD HUB MEMBER AT LARGE MCI Solutions manufactures high quality innovative and environmentally sensitive Solar-Electric powered Chemical Injection Pumps for the oil and gas industry. Canada’s northern conditions pose significant challenges for solar powered equipment manufacturers: cold temperature extremes, 1.8 peak sunlight hours daily and a geographic remoteness that demands reliability. MCI has excelled in the harsh northern environment with chemical inject solutions designed to incorporate its’ patented N-Seal Secondary Containment technology. Pipeline injection of various production enhancement chemicals is crucial to an uninterrupted flow of product to market. Industries worldwide have benefited from system performance improvements through evolution and innovation. This is equally true of positive displacement Chemical Injection Pump technology. Responsible stewardship of our Planet is front and centre. In the past, operations could result in chemical leaks, drive gas venting and surplus chemical injection. Today these environmental concerns can be greatly reduced or eliminated with the deployment of currently available and field proven technology. The use of MCI 24V Electric Chemical Injection Pumps and field retrofittable N-Seal Adaptors can save thousands of dollars per pump annually, eliminate/ reduce harmful environmental discharge, increase chemical delivery performance and pay for their implementation within months. Submitted By: Chris Kane

BUSINESS IMPROVEMENT GROUP - OILFIELD HUB MEMBER AT LARGE The Oil and Gas industry is constantly evolving its processes and technology—especially in today’s political and environmental context. Due to this evolving nature, many Oil and Gas companies are conducting the type of highly eligible effort that the Scientific Research and Experimental Development program aims to recover for Canadian businesses. That’s where Business Improvement Group comes in. BIG strives to be the premium SR&ED consulting firm for the Oil and Gas industry and has been fortunate to have worked with many Oil and Gas clients over the past 12 years. With a 99.9% success rate over a client base of over 950 companies, BIG is one of the largest independent SR&ED consulting firms in Canada. Our 40 expert engineers are specialized by industry, unlike other SR&ED companies who rely on fewer technical staff to cover all sectors. We’ve recovered over $100 million for our clients — that means in today’s competitive market, we give companies an advantage over their competitors by offsetting R&D expenses with SR&ED refunds. With recoveries like that, companies are able to reinvest and improve their technical capabilities. In an industry so deeply entrenched in opportunity and growth—why not get your research dollars back, too? Call 1.877.541.5551 to see if you qualify. Submitted By: Heather Nelson

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MEMBER ANNOUNCEMENTS Professional Services Today To Guarantee We Are Back Tomorrow

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Fortress Serving Northern British Columbia Since 2008

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Integrity Interconnecting Your World

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Intercon Providing Working Capital for Business

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MEMBER ANNOUNCEMENTS We Provide Tax SMART Solutions For Small Business.

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PRODUCTS & SERVICES • Horizontal Wells • Directional Drilling • Positive Pulse MWD • Serving Western Canada and North Dakota • State-of-the-art technology & equipment

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PRODUCTS & SERVICES • Contractor Staffing & Health & Safety Consulting • Project Management • Engineering Services • Well Construction & Completion Design • Specialized Technical Services

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Lloydminster, A REAL INNOVATION HUB

Rick Johnston remembers his first Lloydminster Heavy Oil Show well. The burly, baldheaded 53-year old production consultant was managing a field near Lost Hills, California. The oil was viscous, asphaltine-based with an API gravity of 12 to 14. How was he going to produce it economically? Fortunately, he worked for Nations Energy, a Canadian firm headquartered in Calgary that was familiar with the production techniques and technology used in the Lloydminister heavy oil fields.

One of his first tasks was to trek north to the 2002 Heavy Oil Show, where he discovered plenty of knowledgeable oil patch guys to answer his questions and plenty of equipment designed for fields just like his.

“I was mainly looking for a better way to pump,” Johnston says. “When it was cold that oil was like tar. We had to heat it up thermally just to get it to move. Pumping it was a huge problem.”

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What he also found in Lloydminster was a new approach to heavy oil extraction called cold heavy oil production with sand, or CHOPS. The idea is produce the sand with the oil, which is quite different than the predominant California thinking, which is to keep as much of the sand as possible in the reservoir. Producing the sand leads to much more oil production, but also a host of related problems, such as how to remove the sand from the oil and what to do with it afterward. These were radical ideas for a California oil man. But what he learned at the Lloydminster Heavy Oil Show during his three visits helped set up a whole new way of heavy oil production that was unknown in the 100-year old oil field,

“Primarily we see there are quite a few American companies and then some South Americans who are interested,” said McIntosh, who adds that even Middle Eastern producers are showing interest in heavy oil.

“If you think of the Middle East where they could ignore heavy oil, now they’re starting to look into it. We need to look at the next step for those scenarios.”

Photo Courtesy of KUDU Industries located 40 miles north of Bakersfield and still a significant reservoir in California. “There’s a big heavy oil industry in California, and obviously around Alberta and Saskatchewan, but the technology between the two doesn’t always gets shared,” says Johnston. “As an American I had to approach it with an open mind. We tend to think that everything that we do is absolutely the most correct way to do it, but that’s not always the case.” Johnston says every time he visited the Heavy Oil Show he saw more Americans, from states like Texas, Oklahoma, and Colorado which don’t produce much, if any, heavy oil. It was the reputation of the show that lured producers from south of the border. And it wasn’t just Americans who were coming in ever larger numbers. Mike McIntosh, chairman of the Lloydminster Heavy Oil Show, says industry professionals from 16 countries are registered for the 2012 edition, which is scheduled for September 12-13.

This is a big change from 1984, the first year of the Lloydminster Heavy Oil Show. Back in the old days organizers wanted to keep the show small and easy to manage. The industry was in its infancy then and producers were still testing and developing how to best produce heavy oil. But as expertise grew with experience, and more and better technology was invented and perfected, the show slowly grew to its present size of around 6,000 attendees. The reason foreign oil professionals are flocking to the show is that it has become the place to connect with world class technology. Kirby Hayes is a veteran of the Lloydminster heavy oil industry. As a consultant he’s worked with many of the producers and manufacturers that call Lloydminster home. He also sits on the oil show executive and helped organize the symposium that is a key part of the show. Sharing information is a critical part of expanding the industry, he says. “I helped get the symposium held on the same days as the show. That was important because people who attend the show can sit in on some technical presentations on CHOPS,” he said. “They’re a real good fit.”

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“The educational component of the whole Loydminster area has been a very significant underpinning to membership,” says Gerald Bruce, president of the Heavy Oil Association. “It’s kind of like the real root foundation of the Heavy Oil Association.” Lloydminster is a real innovation hub, says Hayes, and the heavy oil show taps into local oil companies and equipment manufacturers. “We have the infrastructure and the established technology. The technology is well understood right now. There’s been a lot of work and a lot of effort spent,” he said. McIntosh, whose day job involves providing technical support for pumps to Weatherford International, says manufacturers bring samples of wares and potential customers can even head over to the factory to see how they’re assembled.

the progressing cavity pump, commonly known as a PC or screw pump. The PC pump wasn’t invented locally, but it was adapted there for heavy oil extraction. “One of the predominant forms of artificial lift for heavy oil is progressing cavity pumps, so interest on the technology is spanning worldwide,” said McIntosh.

The PC is a positive displacement pump that transfers liquid by using an eccentric rotor that turns in the pump, creating small cavities that lift the fluid. PC pumps are especially suited to viscous fluids, which is why they caught on in heavy oil regions. “The thermal aspects of the technology are the big thing these days,” says McIntosh. “A lot of people are looking at it from a progressing cavity pump point of view. High temperature pumps are definitely something that all the manufacturers are currently working on.” The exhibitors list of the heavy oil show is chock full of local manufacturers, ranging from sand handling equipment (necessary because of the thousands of PC pumps used in the region) to electronic data collection and pump control (required because PC pumps must operate within a certain RPM and torque range) to special tanks (sand, again) and competing pump designs.

Photo Courtesy of KUDU Industries

“We don’t specifically organize that but some of the suppliers and manufacturers try to do those types of things and several will be trying to have tours of the facilities where they can get people out to the actual well sites and show the equipment in action,” he said.

“There’s quite a bit of manufacturin here in town that the product’s developed here and going all over the world,” partly due to the exposure offered by the Lloydminster Heavy Oil Show, says McIntosh.

WHAT TECHNOLOGY ARE PRODUCERS LOOKING FOR? Like Rick Johnston, many are looking for better pumping options. Around Lloydminister, that means

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Those manufacturers and service companies, along with the oil companies, are the backbone of the Lloydminister economy. Mayor Jeff Mulligan understands that as heavy oil goes, so goes the local tax base. He thinks of himself as an oil guy, someone who understands the local industry, both

Photo Courtesy of KUDU Industries

producing and manufacturing. He rhymes off four or five innovations developed in Lloydminster like he was reciting his postal code. “When I see us exporting to Venezuela, transporting these technologies to Yemen and other places it makes you pretty proud, but more importantly, as these companies evolve and grow and are bought out by bigger firms, we’re seeing those funds invested right back in our community,” he said. Mulligan sees the Lloydminster Heavy Oil Show as a critical part of that process and says the City will do what it can to support the show’s growth.

“Lloydminster is the heavy oil capital of Canada, if not the world, and since I became the mayor three years ago I have been working hard for us to be a world class event hosting location,” he said. “We’ve been brokering the right people together to make sure that all of the facility requirements are met, all of the venues are made available and we try to make sure in the process that whatever they’re going to need, from permits to security and special accesses are provided as efficiently as possible.” The show is almost certain to grow because of the increasing global interest in heavy oil, according to McIntosh.

Bruce foresees a significant increase in heavy oil production over the next 10 to 15 years. He notes that the annual oil and gas production forecast from the Canadian Association of Petroleum Producers pegs 2011 production at 1.6 million barrels, destined to double to 3.04 million by 2020 and triple to 5.1 million by 2030. Much of that increase will come from the oil sands and SAG-D production, but Lloydminster and area will probably see an increase in production, too. More emphasis on heavy means a continuing high profile and high attendance - for the Lloydminster Heavy Oil Show.

WHERE IS THE SHOW GOING IN THE FUTURE? It’s run by volunteers, explains McIntosh, so slow and steady grow is the order of the day. Organizers have spent the past couple of years bringing the show into the digital age. “A few years ago we didn’t have a website. Now not only do we have a website, we have it set up so you can pre-register for your showpass online so that when you arrive at the show your showpass is waiting for you,” he said.

PRODUCTION Zeeco, Inc. Advantage Products Inc. Incendium Supply Ltd. Liberty Oilfield Rentals Ltd.

“At some point what the world’s going to need for oil and what the world’s going to be able to supply, it’s going to be challenged and the heavies are going to have to play a bigger and bigger role in that future supply,” he said.

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McIntosh and his team have made things easier for this year’s participants. “Some of the changes we’ve seen from our end is we try to learn a little bit every year and try to adapt a little bit,” explains McIntosh. “I guess you could take it smarter and that’s what we’ve tried to do this year.” The next step is to improve marketing. Attendance has plateaued for the past few years. The executive would like to see it begin to grow again, albeit at a manageable rate. “We try and get the word out domestically and internationally,” adds McIntosh. “We know for sure from a potential exhibitor that some of the marketing that we’ve done have actually been working so we’re hoping that translates to more visitors coming through the door.” Mulligan says that the City has recently moved its economic development functions out of city hall into a stand alone corporation, partly to foster a stronger relationship with the heavy oil show. “Probably not this year, but the next time the Lloydminster Heavy Oil Show rolls around well have a much stronger operating partnership,” he said.

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The heavy oil show seems to be an important part of an already strong partnership with oil companies, local manufacturers, the Heavy Oil Association and the municipality. And that relationship is paying big dividends for the partners as high prices and dwindling convention production raises heavy oil’s international reputation. That international profile will keep attracting more and more oilfield professionals like Rick Johnston, who says Lloydminster was one of the best shows he ever attended. “I’ve had a very positive experience with the show. Everybody was very friendly and very knowledgeable,” he recalls. “Ninety-eight per cent of it was relevant to my operations and that made the long trip very worthwhile.”

High praise, indeed, for a show that started with a few local volunteers and has now grown into the premier tradeshow and symposium of its kind in the world. Written By: Markham Hislop, Contributing Editor

ROCKWELL Rocks

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As Bob Dylan once proclaimed:

‘The times they are a changin.’

Never an organization to be caught napping, Rockwell Servicing is adapting its operations to a new generation of rigs dedicated to service in SAGD and heavy oil recovery. These specialized rigs will allow the company – who created the first slant service rigs and are now designing automated service rigs - to deploy equipment on a long-term basis instead of traditional come-and-go operations. For over three decades, Rockwell Servicing has proven itself to be a major operator and innovator in the Canadian oil and gas industry. Operating the fourth largest rig fleet in the Western Sedimentary Basin, Rockwell maintains its standing by constantly upgrading its equipment and operations in support of its mission statement: ‘Performance Excellence Second to None!’

The company has earned an enviable reputation among its peers when it comes to professional oil, gas and geothermal well servicing. Their clients know that they deliver — consistently, effectively and safely. Well-trained crews with extensive experience are hallmarks of Rockwell. They are known for rigging up quickly while complying to the highest of safety standards. With 99 modern fast-moving, versatile rigs operating from seven strategic locations (Ardmore, Grande Prairie, Nisku, Red Deer, Brooks, Lloydminster, Estevan) Rockwell is positioned to provide its customers with the very best in well-servicing solutions and personalized, customized service. The Rockwell rig inventory includes; slant freestanding rigs, singles, including freestanding, mobile doubles, including freestanding, medium/heavy doubles. Other services include; abandonments, completions, downhole pump service, fishing and swabbing, workovers as well as sidetracking and well deepening.

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TRIED, TESTED AND TRUE: Lubriflux Provides a Better Way to Burn Diesel Fuel

Lubriflux helps your diesel engine get more miles from a tank of fuel, as much as 17% more. How? By improving the way diesel fuel burns in the combustion chamber. That’s the simple version of Lubriflux. Whether you’re a long haul trucker or an oilfield services company (or any industry that places a heavy load on equipment), you care about your hard working diesel engine running better and leaving more money on the bottom line. Just ask Leo Sgaravato, president of LGS Industries. He uses Lubriflux in four Kenworths for his metal recycling business in Windsor, Ontario. “We’re getting 10 to 15 per cent more kilometres per tank. Definitely cutting down the trips to the gas station,” he said. “That’s a significant saving for our company.” Your equipment is how you pay the bills, too, and you’re not sticking anything in that engine without knowing a little bit about it first. Here’s the longer version of the Lubriflux story. It’s a little bit of rocket science and a whole lot of innovation and testing that gets added to your tank with every fill up. Lubriflux

LUBRIFLUX EFFECT

President Frank Debillis explains how Lubriflux works. “Under optimum conditions only 60 to 65% of the energy in a drop of fuel is available to work in your diesel engine. The amount of energy available declines if your engine isn’t burning the fuel as efficiently as possible,” he said. “Lubriflux maximizes the efficiency of the ignition in the combustion chamber. That means your engine generates the most power it can from the fuel it burns.”

1. Fuel burns at just the right time. This creates maximum energy during the power stroke. There is no pre-detonation or detonation lag, which wastes energy. 2. Fuel burns faster. There is maximum pressure at the beginning of the power stroke. 3. Fuel is converted to energy as completely as possible, avoiding bad conversions that create emissions, soot, and acids. What’s the science behind Lubriflux? Diesel fuel is made up of long chains of molecules. The more efficiently oxygen moves through those molecule chains, the more efficiently the fuel burns. Think of the fuel as layers of newspaper. Scrunch the paper up and light it in different sections - the paper burns slowly and much of it doesn’t burn at all. But lay the paper flat and now oxygen can move freely, giving you a quick, complete burn. “Lubriflux helps organize the diesel fuel molecules so oxygen moves as freely as possible. The result? The best air-fuel ratio possible at the molecular level,” said Debillis.

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TYPICAL FUEL EFFICIENCY/PERFORMANCE OF ENHANCED DIESEL

Performance based on engine load. Left: High pressure injection (typically 2007 and newer). Right: Standard Diesel.

What are the benefits of Lubriflux? 1. 2. 3. 4. 5. 6.

10 - 17% increase in fuel mileage Fewer emissions Easier starting Smoother running engine Extended engine life Lowered engine downtime

“I’m one of those people who’s skeptical about everything. And I was skeptical when they asked me to try out the product,” said Leo. “But In our experience, Lubriflux does the job. In the six weeks we’ve used it we’ve found significant savings. I’d recommend the product.”

Now that he’s used Lubriflux, Leo’s convinced. He says the benefits are easy to see and he intends to keep using Lubriflux in his truck fleet.

Lubriflux has been thoroughly tested - in the lab, on a dynamometer, and on the road. Put it to work in your engine today.

Performance based on engine load and the Get the “Lubriflux Effect”

difference in the two is pre and post 2007 emissions

When clients test enhanced fuel they literally watch the engine calm down, and the throttle regulator system. back off 10% at a 40% load point, and a 15% reduction at the 75% load rating. The temps begin to climb down and the exhaust smoke cleans up. It’s in this tuned state we see a reduction in vibration, heat, and oil contamination which has translated to documented wear reduction.

Winning non toxic chemistry that is successfully imparting real economical improvements to business. Just mix correctly and done!

equipment, reliability & fuel enhancement technologies

Learn how fuel enhancement technology can translate to consistent equipment reliability, reduced downtime and proven performance/efficiency. Become an environmental success and drive down cost. World Class Sample and testing program with full engineering support.

• Real cost savings

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12-1235 Gorham Rd. Newmarket, ON, L3Y 7V1 | 647.881.0380 | frank@lubriflux.com | www.lubriflux.com

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Leadstone Group was pleased to attend the 2012 Global Petroleum Show (GPS) where we debuted our inaugural issue of Oilfield PULSE. From June 12-14 the entire Leadstone team was at the Stampede Grounds in Calgary, Alberta spreading the Oilfield HUB word. The GPS is one of the largest oil and gas trade shows in the world and attracts roughly 60,000 exhibitors and attendees from all sectors, coming from all corners of the world. It showcases new products, unique innovations and fresh ideas and allows professionals in the field to generate key business connections. The GPS also includes technology demonstrations, the Global Petroleum Conference, networking events as well as numerous training seminars and courses to suit the oil and gas industry needs. We were so pleased to exhibit at the show and look forward to being a part of it as the GPS grows in the future.

Congratulations To Our GPS Draw Winners The Canadian Rockies offer some of the most beautiful landscapes in the world so why not vacation there? Well, our lucky Global Petroleum Show winners will soon be experiencing the wonders of British Columbia, Canada. At our booths at the GPS show we held a draw to win a two night stay in a vacation home courtesy of High Country Properties in British Columbia. Congratulations to our winners Warren Tippet with WestFire Energy Ltd. and Bernie Goruk with Crimson Energy Ltd. We hope they enjoy their stay! Written By: Andrea Turko

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Opening Night Reception Global Petroleum Show attendees completed their busy opening day with a taste of Canada at the Opening Night Reception. Guests had a chance to try their hand at authentic Canadian activities like curling, bobsledding, cross country skiing and of course Canada’s favorite pastime – hockey. Sponsored by Stewart and Stevenson, servers – complete with iconic Canadian maple leaf ball caps – ensured guests enjoyed outstanding food and beverages. Entertainment

consisted of live background music and roving entertainers. This was a unique opportunity to network, take pictures and share a laugh with the international oil & gas community. A special address by Alberta Premiere Allison Redford topped off the night. Written by: Dave O’Connor

International Energy Leaders Forum A select group of GPS attendees were the benefactors of a special gathering of energy leaders on Wednesday morning at The Palliser Hotel in Calgary. As the global need for energy continues to grow at exponential rates, the energy industry is undergoing a significant transformation due to technological innovations, supply fluctuations, and changing economic, regulatory, social and political landscapes. The International Energy Leaders Forum, held on June 13th, featured government leaders and prominent experts exploring the future of the energy industry on a global scale. Speakers included: • Honorable Alison Redford – Premier of Alberta, Canada • Mary Fallin – Governor of Oklahoma, USA • Carlos Villegas, Executive Vice President – YPFB, Bolivia

• • •

Mr. Sergio Guaso, Sub Director – Pemex, Mexico Wale Tinubu, CEO – OANDO, Nigeria Leandro F. Alves, Energy Division Chief, Infrastructure and Environment Department – Inter-American Development Bank • Honorable Ken Hughes, Minister of Energy – Government of Alberta, Canada • John Hankins, Vice President and Trade Development – Calgary Economic Development, Canada • Kurt Abraham, Executive Editor, World Oil Magazine All speakers provided a full house of attendees with insightful information on their respective positions. Written By: Dave O’Connor

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Metro Petruck Memorial Golf Tournament The tournament was held at Jagare Ridge Golf Course on May 16th; this year we had 120 golfers. There was a BBQ lunch before we started golfing and we had a dinner down at the OTS afterwards catered by Zambelliâ&#x20AC;&#x2122;s Restaurant. This was a bare bones golf tournament, not meant to make any money off of, but to honour past figures in the oilfield who have passed away. It was just our way of getting together and to remember. It started last year, 2011 with Dan Zimmer and this year we added Metro Petruk, the former OTS caretaker. In the future we will keep adding people to honor every year. Written By: Dan Zimmer Photos By: Leo Provencher, Titan Tubular

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Plains’ Perspective McCaffrey on Manufacturing

COMMUNITY SPONSOR

It is no longer a secret that Canada has a skilled labour shortage. Our company, Plains Fabrication and Supply, manufactures pressure vessels. We have an excellent staff of 135 people that work long hours to produce the best products we can on time and on budget. We need to satisfy our customer’s requirements, and that often means that a regular working day just won’t suffice. So we fill our day shift, and do the best we can, but then in order to meet the demand we need to fill the night shift which is difficult because there are not enough people that want to work nights. Then we also need to fill swing shifts which are the weekend shifts, and again it is difficult to find people who want to work those hours. We need managers and lead hands to run these shifts. We need safety people and an overabundance of skilled workers to help keep our projects on track. Truth be told we could grow our business if we could find the right people who want to work these hours. We post ad after ad in the paper, online, government websites, and use outside agencies all as a tool to help us find the right people. What we get in return is a few resumes, and most do not have the required skill. So from there we hire the best we can, we train our people, we invest time and sacrifice production so that we can build our staff. We use

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every available avenue to find and hire Canadians with the right skill set. Simply put there are just not enough skilled trades people in this country to meet the requirements. So we work with schools to promote the trades, we hire directly out of schools, and we bring people from all over the country to help fill the gaps. But even though these new employees may have the “ticket,” they do not have any experience, so while their help is valuable and appreciated, it is limited.

The workers we hire from other provinces require time to get their Alberta certifications so again their help is valued, but it is not an immediate help. In the meantime our excellent staff work harder and harder to fill in the gaps. They miss baseball games, work through the weekend, rack up overtime, and we love them for it. We hold barbeques and try to show our appreciation in as many ways as we can, but we know our responsibility is to provide more help. If we could find the right people we would hire them immediately, but all our efforts to hire Canadian workers have only had minimal results. When that doesn’t work we need some alternatives. We need the government to allow us to try to meet the demand for our products. There are people with the skills that we need in other countries who want to move here because this is a great country full of opportunity. They will work the same amount of hours, get paid the same wage, and if they work overtime they get paid overtime, they receive the same benefits, and if they do the work and get all the proper certification the Alberta government will extend an invitation for them to stay. It is a fair and mutually beneficial arrangement, and the forward thinking people in the Canadian Government know what a powerful tool this is for industry. This helps our company, it helps our employees, and it helps our country. Please do not be fooled into thinking that we are using this tool as the only solution to an incredibly complex problem, and yes there may be issues, but if you have issues then bring them to the table. You may be aware that I have previously written a response to an article in a Calgary newspaper regarding the foreign workers program in Canada. The article was a one-sided attempt to portray Canadian Industry as using foreign workers as a crutch. The article also talked about the foreign worker being “used” and “unable to stay in Canada” after the company who brought the worker in had essentially gotten what it wanted and then returned the worker home. It was so incredibly untrue that it forced me to respond, and that response has made the rounds through much of the manufacturing industry. I cannot speak for all industry, but I can speak for our company, and I believe that the companies and associations we are affiliated with would agree with much of what we have to say. The basic message is that we want Canadian workers. We want them to help us succeed, be a part of our team, and help us be an efficient and environmentally friendly manufacturer.

Perhaps if people understood the hurdles we have to face, from the employer’s perspective, it would help to add a more rounded view to the grim picture of the labour shortage that has been riddled throughout every newspaper in the country for the past few months. Businesses, business associations, and the government are getting together in diverse and cutting edge ways to counteract our labour shortage. The issue is that we are not promoting the incredible things we are doing. Hundreds of entrepreneurs are going out of their way to educate themselves in conferences, get together in industry focus groups, and joining associations that are actively working to bridge the gap between where we are today, and where we will need to be tomorrow. In the next two weeks I have 2 government roundtables to attend on foreign workers, Yesterday I was part of a webinar on foreign workers, and by the end of October I will have attended 2 conferences regarding foreign workers. That doesn’t include association meetings, and internal workings. We are educated, and in constant communication with both industry and the Canadian and Alberta governments. If anyone has concerns then we invite them to the table to talk them through. I think you would be surprised by how much non-billable time and effort Canadian industry spends ensuring our collective industries stay healthy. Tom McCaffery, General Manager Plains Fabrication & Supply

INFORMATION TECHNOLOGY Global Outsourcing 4 You Intercon Messaging Service, Inc. Fortress Technology Planners Inc.

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JIMâ&#x20AC;&#x2122;S JOKES A BIT SALESMAN

POLLY PULSE

was driving down a road in rural Saskatchewan -

SOME GUYS HAVE A HABIT OF SAYING:

travelling somewhere north of the speed limit - when a four-legged chicken appeared and passed him as if he was standing still. He put the pedal to the medal but could not catch the bird. Finally the chicken veered off and ran into a farmyard. The salesman pulled up in front of a farmer and asked, "What on Earth was that bird that just ran into your yard?" 'That," said the farmer,"is one of our famous four-legged chickens. We raise them because they have two extra drumsticks." "How do they taste?" "Don't know. "We've never caught one."

"Why buy a cow when you can get the milk for nothing? This sentiment has now been matched by young women who have decreed, "Why buy an entire pig...just to get a little sausage?"

A FORMER NAVY CAPTAIN

walked into a bar near the Legislature in Edmonton, leading a large Grizzly bear on a leash. "Do you serve Tories here?" She said with a bright smile. "We sure do little lady," the bartender smiled, "What can I get you?" "A beer for me!' said Polly. "And a Tory for my bear.'

was in command of a drilling platform operating in offshore Newfoundland.

"Y'KNOW... " SAM SAID to his brother Ben, "I think it's time that we were

One day a communication reached the ship advising that a crew member's mother had died. The skipper picked up the ship's intercom microphone and announced, "Smithers, you mother has just kicked the bucket. Tough luck old chap, Now back to work."

allowed to swear like adults. I think we should pick a bad word and use it." "Good idea," said Ben. "I think I'm going to use 'Bet your sweet ass' and see what happens." Sam said, "I'm going to use 'Oh, what the hell.'" The next morning, when Sam and Ben came downstairs, their mother asked, "What do you want for breakfast, boys?"

The oil company president, who happened to be touring the facility, was outraged by the captain's callous behaviour. He tore a strip off of the old sea dog, who promised to mend his ways.

"Oh, what the hell," said Sam, "I think I'll have Corn Flakes." Their father leapt up in anger, spanked Sam and washed his mouth with soap. Ben stood watching wide-eyed, and when his mother asked him what he wanted for breakfast, he said, "You can bet your sweet ass it ain't Corn Flakes."

Several weeks later, when he had the ship's complement lined up on deck, the skipper was presented with another communication. He stared at for several seconds, then grabbed the mike. "All men with mothers..." he announced. "Take three steps forward. Not so fast there Quimby."

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Leaders in Safety and Training for the Oil and Gas Industry Enform is the safety association for Canada’s upstream oil and gas industry. Established by industry for industry, Enform helps companies achieve their safety goals by promoting shared safety practices and by providing: » Effective training, including courses on general and operational safety programs and petroleum fundamentals » Expert audit services » Professional advice Our vision is no work-related incidents or injuries in the Canadian upstream oil and gas industry. Contact Enform today for more information.

Email info@enform.ca Calgary 403.516.8000 Toll-free 1.800.667.5557 www.enform.ca