Pipeline News March 2009

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

March 2009

FREE

Volume 1 Issue 10

Focus Edition

Geology

Stelmach Bailout Package Page A2

Seismic Professor Page C2

Ron Carson on 2009 prospects Page B1 Saskatchewan’s Subsurface Geological Laboratory in Regina hosts a repository for core, drill cuttings samples, and geophysical logs. It is also where the province’s petroleum geologists work. Here in the core repository warehouse, are: back row standing, from left: Chris Gilboy, Melinda Yurkowski, Dan Kohlruss, Fran Haidl, Akhtar Khan, Gavin Jensen, Chao Yang Front Row: Arden Marsh, Erik Nickel, Jeff Coolican.

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PIPELINE NEWS March 2009

Stelmach plans to re-energize

By Geoff Lee Pipeline News

News

Notes Century tests ¿rst Bakken well Century Energy Ltd., in conjunction with its joint venture partner, Triaxon Resources Ltd. of Calgary, has announced the results from their first Bakken well adjacent to the Roncott Bakken oil pool in southeast Saskatchewan.

The well has an initial production rate of 80 bbls of oil per day (24 bbls net to Century), and is the first of a projected eight well development program on adjoining acreage held by Century and Triaxon.

Severe weather conditions in southeast Saskatchewan continued to restrict operations in February, and the Century noted in early February that it may require another two weeks to determine the well’s potential.

Additional development is scheduled for the spring of 2009.

Mooncor raises funds Mooncor Oil & Gas Corp. has completed the first tranche of its non-brokered private placement financing by issuing 402,000 common shares, on a flowthrough basis, at a price of 25 cents per share and 5.73 million common share units at a price of 20 cents per unit for aggregate gross proceeds of $1.25 million.

The proceeds will be used by Mooncor for exploration on its oil and gas properties and for working capital. Including the issuance of shares detailed in this news release, Mooncor currently has 85.27 million common shares issued and outstanding.

Weyburn gets Highways money The city of Weyburn will be receiving $450,000 of provincial money for Highway 39 service road improvements. The funding was part of provincial infrastructure money announced in February, part of the province’s economic stimulus agenda.

new leadership in our largest export market, I believe we have an opportunity to strengthen Alberta’s position as Calgary – Alberta Premier Ed a North American energy provider.

The massive investments in public Stelmach announced what amounts to a bailout package of tax credits and drilling infrastructure which form part of the incentives to breathe new life into slump- new U.S. administration’s recovery plan ing junior and mid-size energy companies will require a stable supply of energy: in Alberta. Stelmach introduced his plans Secure energy, produced responsibly.

And our province can provide that to a Calgary Chamber of Commerce lun- to our mutual benefit. cheon Feb. 5.

We will work with the federal Details of the package will be made government to extend the hand of public once his Energy Minister, Mel Knight consults with oil the industry on friendship and partnership to the new incentives and with the banking sector on administration in Washington.

Last week, President Obama ways to ease credit.

Stelmach prefaced his bailout com- spoke about eliminating oil imports ments with a scan of the global financial from the Middle East and Venezuela crisis and the importance of energy to Cal- as part of his New Energy for America gary and the province. We’ve reprinted the plan.

Is there room in that plan for a latter part of his speech including his comments on reviving drilling activity in the partner such as Alberta, which shares his view about integrating energy, the oilpatch.

In particular, the future of the economy and the environment? I think energy sector is of critical importance there must be.

What the new administration to this city, and to our province. And I needs to know is that Alberta is combelieve that future remains bright.

While energy demand may slow mitted to showing environmental leaddown due to the recession in the U.S, ership in energy production.

We’ve done a lot already, and we’re I believe we can expect to see some rebound in energy prices as reserves moving forward with policies soundly based on science and innovation. shrink, likely in the next year or two.

That’s the message I took to Texas And with this week, and that’s the message we’ll take to Washington and beyond.

Because we will continue to market our products aggressively, both nationally and internationally, to protect Alberta’s income, jobs and opportunities.

And we’ll continue to protect Alberta’s reputation and promote a positive, accurate view of our province at home and abroad.

One of the biggest priorities in dealing with the new administration is coming to an agreement on climate change.

By all accounts that will be the number one issue for discussion when the President meets Prime Minister Harper later this month.

I welcome that.

Industry needs certainty with regard to government regulation. And a good agreement that offers consistency across the North AmeriAlberta Premier Ed Stelmach can economy

can provide it.

Albertans will be part of that discussion. Not sitting at the negotiating table - that’s the federal government’s job.

But we need to be consulted - before the fact - as resource owners.

And from our discussions at the recent First Ministers’ Meeting in Ottawa, I believe the Prime Minister shares that understanding.

I know many of you are concerned about the challenges facing the energy industry. And I share those concerns.

These are not normal times. The chill in global financial systems is impacting Alberta families and businesses.

As a government, we can’t control global financial markets or the price of commodities. But there are things we can do.

So I have asked Energy Minister Mel Knight to look at the cash-flow situation facing our junior energy companies.

I know those companies are finding it particularly difficult to access the capital they need for operations - and that means idle rigs and Albertans out of work.

So we will provide an incentive program, providing short-term, targeted assistance for junior and mid-cap companies.

One that encourages the banks to do their part, and could also address abandoned well reclamation.

Minister Knight will consult with industry and will be announcing more details.

We can dwell on how bad the recession might be. But that takes our attention away from where Alberta needs to be.

Using our hard-won advantages to ensure that our province emerges from these difficult days ahead of the pack.

With our skilled workforce intact, our infrastructure ready, and our economy strong and competitive to make the most of the inevitable recovery.

I believe we can face these new challenges with the same confidence and determination we had in meeting the challenges of unprecedented growth.

Our path may be different, but our goal for Alberta must be the same: A prosperous future and a world class quality of life.

I believe that’s the forward-looking approach Albertans want us to take.

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PIPELINE NEWS March 2009

Not ¿rst choice, but a good choice for the province

One of the province’s petroleum geologists, Fran Haidl shows a posterboard she takes when she speaks to schools about geology.

Outreach is important, especially to teachers, she notes, as they reach hundreds of students.

By Brian Zinchuk Pipeline News Regina - Ask a coffee room full of the province’s petroleum geologists how they got into geology in the first place, and the answers are mostly pretty similar. They started in something else.

“Engineering,” says one.

“Or biology,” says a second.

“Or physics,” says a third.

Melinda Yurkowski, a senior petroleum geologist, says many take geology as an elective in university, and then find it so interesting they decide to major in it.

Yurkowski’s area of expertise includes unconventional gas.

The province retains a stable of eight research petroleum geologists at its Regina Subsurface Geological Laboratory, also known as the core repository.

Erik Nickel, who spends a lot of his time on the east Bakken play and CO2 storage and EOR potential, says he did well site geology before coming to work for the province. “I was the white hardhat on the drilling rig, looking at cuttings samples, taking cores.”

He describes, with a smile, having to describe sets of cuttings taken every five metres while on

the rig, with clear instructions not to write “As above” on successive sets that often looked almost identical.

Dan Kohlruss also works on the Bakken, and on oilsands. He was also a well site geologist for four years out of university.

Jeff Coolican spends a lot of his time analyzing geophysical logs. “I initially worked in the field in the north,” he says, noting that that had been hard rock experience.

“Field experience never hurts,” Nickel says.

But when things dry up, as they did in 1998 for Nickel, he welcomed the chance to land a stable government job, first starting on a contract basis.

Going around the room, it’s readily apparent that most are younger than what you might expect in a provincial department, as in early thirties-young. There was a generational shift a number of years ago, and while there are several more senior geologists, it’s quite possibly one of the youngest average age provincial offices you might run into for a while.

They get the Star Trek jokes, for instance.

Fran Haidl, amongst other responsibilities, heads up the outreach program. “It is really important the public know what we do and why we do it,” she says, holding up a poster board she takes when she does school presentations. Workshops for teachers, she notes, are extremely valuable, because of the hundreds of students they will have contact with during their career.

Gavin Jensen’s work includes enhanced oil recovery and carbon dioxide storage. That includes work on a national carbon dioxide storage capacity atlas, still in its planning stages.

A typical day for these geologists can vary widely. “It’s tough to say,” one notes. They could be on the phone, interpreting geological data or writing a research paper.

Several have or are working on their masters degrees.

Arden Marsh, whose specialty includes heavy oil, coal and oilsands, says it can go from picking formation tops on cores to informational technology. “I handle a lot of the regional project data. The Weyburn data came through me,” he says of the Weyburn carbon dioxide sequestration project, phase 1, that ran from 2000 to 2004.

Occasionally there are hired consultant geologists, associated with the Petroleum Technology Research Centre (PTRC), but working at the lab.

“We take a lot of calls and requests from companies looking for information on Saskatchewan geology,” says Nickel. “I took a call from Michigan an hour ago.”

“It could be a geologist, or the president of a company, or a farmer wondering if they are going to drill on their land.”

Chao Yang specializes in potash. She notes there are a lot of new players in that field, and that there is strong interest from China. Yang speaks Mandarin, an advantage in that regard, since she says most of Saskatchewan’s potash exports go to China.

A3

News

Notes SaskEnergy cuts rates

SaskEnergy has applied to the Saskatchewan Rate Review Panel (SRRP) for a commodity rate decrease, effective April 1, 2009. The proposed commodity rate would be $6.23 per Gigajoule (GJ), compared to SaskEnergy’s existing rate of $8.51/GJ, which was implemented October 1, 2008. If approved, this 27 per cent commodity rate decrease would result in a 19% overall rate decrease for the average residential customer, resulting in savings of approximately $20 per month or $240 annually.

This application is based upon the go-forward pricing in the natural gas market for the next 12 months. Commodities, including natural gas, have declined significantly with the slowdown in the North American economy. If approved, this proposed commodity rate of $6.23/GJ will be the lowest SaskEnergy has had in place since April 2003.

Ryland Updates Bakken Results Ryland Oil Corporation says it completed drilling on the current phase of Bakken evaluation wells on its acreage position in early January, despite considerable delays encountered due to severe winter weather.

The focus of the work has been on expanding the productive area around the Roncott field. Ryland’s current production from the Roncott area is principally from two horizontal Bakken wells. One of the wells, which was put on pump in late December, 2008, is currently producing approximately 85 bbls of oil per day.

The second well, completed shortly thereafter, is showing a steadily increasing oil cut as frac fluid is recovered.

Ryland is also receiving minor contributions to its production from one of the horizontal wells drilled earlier in 2008, as well as several vertical wells in the main Roncott field area acquired through the purchase of Viceroy Resources Ltd., which contribute 20 to 25 bbls of oil a day.

In total, Ryland is currently producing approximately 145 bbls of oil per day from its Bakken wells in the Roncott field.

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EDITORIAL

PIPELINE NEWS March 2009

Pipeline News Publisher: Brant Kersey - Estevan Ph: 1.306.634.1015 Fax: 1.306.634.0141

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Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.634.1015 SOUTHWEST Swift Current 1.306.634.1015 NORTHWEST Geoff Lee - Lloydminster 1.780.875.6685

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Thud. Ouch. What now?

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There’s no question, Saskatchewan’s once lofty crown land sales have landed with a loud thud in February, in line with similarly cratering land sales in Alberta and British Columbia.

Saskatchewan’s Crown land sales auctions occur once every two months. The closing date for Feb. 9 sale postings was Oct. 22, and the sale was posted Nov. 27, 2008.

Permit closing dates are one month prior.

Bids are accepted up until 4 p.m. the day of the sale.

On that day, West Texas Intermediate Crude went for $39.58 at Cushing, Oklahoma.

The sales’ total haul was $6.3 million, down 96.6 per cent from the February, 2008, sale. Some would think that would be the definition of a meteor falling down to earth. But there is deeper meaning in the numbers, so don’t get too worked up just yet.

We had to go back through nine years of provincial press releases to find a February land sale that was lower.

In 2000, the February sale was $5.4 million. Since then it has been on a gentle rise for much of the decade, culminating in the whopping 2008 sale.

However, that 2008 number was in itself skewed.

Since 2000, the highest land sale in February was 2006, when it hit $35.1 million. The 2008 number was 5.6 times higher than the 2006 February high.

Counting the highs and the lows, you get an average of $35.6 million in sales, but even that is misleading.

Since only one year in the ten year set was over the $35.6 million, the average number is functionally meaningless.

Instead, one should look at the median - $16.6 million. This is a more realistic number.

We won the lotto in 2008, and 2009, it was back to pork and beans.

All of this is of course tied to the price of oil, and its tremendous drop in just eight month, from breathtaking heights to “Oh, great, now what?” lows.

The immediate impacts are going to be budgetary. It’s unlikely the province is going to be advertising requests for advice as to how to spend its surpluses. Sas-

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katchewan will not be paying off 40 per cent of its debt in one year in the foreseeable future. It was good that was done when we could, because the breathing room it bought will be needed.

For the public sector, there will be winners and losers. The registered nurses got a contract last year that no one else will even come close to touching. We may end up seeing restraint again in contract negotiations, which will be tough to swallow for those working alongside workers who did get a big boost when times were good.

Expect to hear the words “The cupboard is bare” at some time in contract negotiations this year, followed by, “You can do a lot more with $75 oil than you can with $35 oil.”

To do its part in the so-called stimulus extravaganza, the province will spend a lot on infrastructure. But at some point there will be a realization that there are no more windfall dollars from either land sales or oil royalties. Saskatchewan will have to live within its means.

For companies and workers in the oil and gas sector, it means a year of retrenchment. We see this in the rig count, which was off substantially in mid-February, in the low 30s. That’s about half of the rig counts for the past two years at this time. If it makes anyone feel any better, Alberta is reporting just over half the number of active rigs at this time, compared to the previous two years. They’re running at 266 active rigs as of Feb. 13, compared to nearly 500 in 2007 and 2008. Maybe that won’t make anyone feel any better.

A lot of land was purchased in Saskatchewan last year, and there still is a use-it-or-lose-it expiry date on all that land. It means that there will be continued development, but at a much slower pace than the summer and fall of 2008. A lot of companies are announcing they still intend to drill this year, but are pushing back their drilling programs to later in the year, when they expect prices of oil will rise.

That’s the name of the game right now – ‘We’ll just have to wait and see.’ Expect to hear that a lot.

PIPELINE NEWS INVITES OPPOSING VIEW POINTS. EDITORIALS AND LETTERS TO THE EDITOR WELCOMED.

PIPELINE NEWS March 2009

Opinion

A5

Are they tilting at windmills?

From the top of the pile Brian Zinchuk

I came over what passes for a small rise southwest of Winnipeg near the village of St. Leon when I was awe-struck.

After having driven almost two hours through billiard-table flat floodplain, I came across the St. Leon wind farm. Not since driving into Jasper for the first time have I been struck by such a beautiful vista. The gleaming white masts rose above the hard-caked snow against a cloudless blue sky. The blades, each the size of the wing of a large airliner, swept in their arc lazily, mesmerizingly.

This, I thought, like so many others, is the future.

It was an interesting thought from someone whose job it is to write about the oilpatch. Just two days before, I was taking pictures of drilling rigs. As I drove by plants, I could smell the characteristic whiff of hydrogen sulphide. When I left home, I saw the plumes rise from the smokestacks of the Shand and Boundary Dam power stations. Now, on this clear day, I stood beneath, and eventually touching, the future. It was an epiphany, if I ever had one.

The wind barely touched my face. It was nearly calm at ground level. Yet the blades were still turning at about six revolutions per minute. Standing

directly below one, there was hardly any noise, although, I will grant, the wind was barely there. I could have easily had a conversation with someone standing beside me without raising my voice in the slightest. I could hear a “whoosh, whoosh, whoosh,” with a distinctive whoosh for each blade.

There were no emissions, so noxious fumes, no pollution, no green house gases I knew of. I couIdn’t smell it as I drove by. I didn’t see birds committing hari kari on the blades. Yet they were still turning, and power was flowing out of the transformer at the base. If this isn’t perfection, what is? I wondered.

How can anyone argue with windmill power?

They are cheap – a few million each. Considering how much I paid for my house in an inflated market, that’s really not much at all.

They can be added incrementally, and in a very short amount of time, compared to the alternatives.

You could put up a few dozen or a few hundred at a time, if need be. Construction per unit is measured in months, not years. Individual windmills can be assembled in days.

A mammoth nuclear plant can add a thousand megawatts per unit, take ten years to build, and hundreds of thousands of years to dispose of. How do you dispose of a windmill? Knock it over, and recycle the steel. That’s it.

I don’t buy the argument that our power grid can only handle a small percentage of wind power.

In Europe, we’re seeing some countries generate up to a fifth of their power from the wind. Are we so backward we can’t drop them an email and ask them how they did it?

Amidst my ruminations of a perfectly green future, something eerie happened. They all stopped.

I looked around. Of the 23 windmills I could see, only two were turning. The remainder were gener-

ating exactly zero power.

You can’t run a lot of lightbulbs off that. Nor can you heat my buddy’s house, which, being in Manitoba, has electrical heat.

A few minutes later, one, then six, then all of them started turning again.

A lady from St. Leon walking down the road on this beautiful day told me they rarely stop, and she finds them beautiful. She’s filled her camera with pictures of them. When it is windy, they are noisier, but not much.

So maybe windmills can’t fully replace baseload generation. But there’s got to be a place for a dramatically higher proportion of wind energy in Canada’s energy mix.

Before any oilmen go get a noose and some torches, remember this. Windmills can’t power cars, yet. It’s going to take a serious revolution in batteries, but even then, wind can’t do the job.

Petroleum production in the US peaked decades ago. In Canada, if it weren’t for the oilsands, we would be on the same path. Every well the story is the same – production always declines until it is now longer economical. That’s why they keep drilling new wells.

Yet demand for power is continuously growing.

Keeping up to demand with petroleum or nuclear may be impossible, or in some instances, unpalatable. Wind’s function may be to fill the gap met by growing demand.

But don’t take my word for it. T. Boone Pickens made billions in the oilpatch. He thinks the future is in the wind. Maybe everyone else is just tilting at windmills.

Brian Zinchuk is editor of Pipeline News (www. pipelinenews.ca). He can be reached at brian.zinchuk@ sasktel.net.

Gasoline prices seem to be a joke Lee Side of Lloyd Geoff Lee

The downturn in the price of crude has once again exposed the greatest mystery in the universe – why is the price of gas so high?

It’s a surprise that the Discovery Channel hasn’t tackled this issue given how they how devoted plenty of resources to tell us in 60 minutes how the pyramids were built thousands of years ago.

Why can’t someone similarly inform us why gas went up as recently as yesterday? The evidence is still very fresh. This is not a cold case. There are fewer rocks to overturn.

Actually, it would be really nice if someone would

tell us straight up that there is no correlation between crude oil prices what we pay at the pump and quit trying to fool us with a daily litany of silly excuses.

There are a few websites which have compiled lengthy lists of funny reasons cited in news headlines over the past few years.

Here’s a few of the top picks for your amusement: 1. Nigerians running wild again this year 2. Three Filipino oil and gas workers were abducted in southern Nigeria 3. Concerns of new predictions of new hurricanes for 2006 4. The recent death of King Fahd 5. Oil is effected by a superhot, panic-ridden California market The sad part is, these were excuses for gas prices rising when crude was also rising on its way to a peak of over $147 a barrel last year. Now that crude has dropped back to earth, similar sounding excuses have resurfaced.

Some would says the truth is really all about greed. Oil companies will charge as much as they can get away without their competitor undercutting

them. But who is the person in the oil company with his or her hand on the daily price lever? If we can find that out, we could all file and settle a class action lawsuit to cover our gas costs for the rest of our lives.

What all of these theories, excuses and conspiracies boil down though is entertainment – not news –that is where these price disconnect stories should be filed.

If no one can determine the who, what, why, when and how, then it’s not news. It’s more like “info-tainment” or fodder for comedy. Here’s a couple of Jay Leno’s oil price jokes to leave you laughing whether gas goes up or down.

“Gas is so expensive now, today I saw Jose Canseco and Barry Bonds carrying their cars.”

“President Bush had lunch with U.S. troops yesterday. It’s been exactly two years since the fall of Baghdad and just as Bush predicted, Baghdad fell, Iraq fell, Saddam fell – the only thing that didn’t fall was the price of gas.”

“The price of gas in California is going crazy. In fact, today I did something smart. I bought a gallon as an investment.”

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PIPELINE NEWS March 2009

PIPELINE NEWS March 2009

A7

Gatekeepers of a precious resource:

By Brian Zinchuk Regina - In a low-slung building on Regina’s Dewdney Avenue, you’ll find a long, cold warehouse, one that has been expanded considerably over its 50+ year existence. As it expands, this unassuming building has housed a priceless, and in many ways irreplaceable body of knowledge about what is beneath our feet in Saskatchewan. In it are the gatekeepers of that knowledge.

The Saskatchewan core repository, more formally known as the Subsurface Geological Laboratory, hosts all the core samples taken in southern Saskatchewan, most in search of oil, gas or potash.

Chris Gilboy is the director of the Petroleum and Geology Branch for the Ministry of Energy and Resources. He has eight geologists and two GIS technicians working under him, plus nine warehouse staff who look after the core and other material geological data, and ensure clients get to view it when and as needed.

“We strictly deal with geology and archiving material that comes from oil and gas drilling,” he says, but adds that potash largely falls into their purview as well.

Mining in the north comes under a different set of regulations, and cores recovered during hard rock exploration are generally kept in the La Ronge core storage facility on a voluntary basis.

“Core, under the oil and gas regulations, belongs to the government,” Gilboy explains.

The repository is a library of sorts for three main forms of information, as data and as physical samples. They are logs, drill cuttings samples, and core.

Logs The first is geophysical logs from essentially all oil and gas wells drilled in Saskatchewan. While some newer forms of logging are submitted on a voluntary basis, other forms are mandatory.

A large library of paper records contains these logs. Gilboy pulls out a paper log created in the days long before computerization.

Paper records tend to be out of vogue these days, however. A commercial supplier has scanned all the logs, and makes them available, for a price.

This well, located in 14-05-004-30W1, has yellowed paper on which squiggly lines show how the resistivity of the rock changes as the physical characteristics of the layers of rock penetrated by the drillhole change.

Is every well logged?

“Mostly, yeah,” he replies. “Some of the newer stuff we don’t necessarily require, e.g., magnetic resonance, but it’s all helpful toward enabling us to interpret the geology.”

Drill Cuttings Samples At set intervals, e.g., every five metres, samples are collected at the drilling rig, usually a responsi-

Paul Ramaekers, in the red vest, is an independent geology consultant who, many years ago, worked at the Subsurface Geological Laboratory.

Now he works on his own as MF Mining & Forestry Resources, Inc., currently working on the Athabasca Basin in northwest Saskatchewan. Here he consults with project geologist Sean Bosman, of Saskatchewan Energy and Resources. In the area Paul is working on, located south of Lake Athabasca, he notes there is a lot of “natural oil pollution,” something that often gets overlooked in media reports of the “dirty oilsands.” “If you go in the bush on a hot day, it can, in places, smell like you’re in a reÀnery,” he explains.

Photo by Brian Zinchuk

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bility of the on-site geologist. These samples will be collected by the rig hands, and brought to the geologist to analyze.

“When drilling happens, they use a circulating mud system to control the pressure and cool the bit. The mud brings back the cuttings the rock chips the grindings to the surface. It goes through a sieve. “The geologist will look at it under a microscope on site, and make sure there is nothing unexpected about the formations that are being drilled into, Gilboy explains.

These drill cutting samples are usually collected on the first well in a section, or if there’s a second well that’s substantially deeper than the first.

“They come in small vials. The drilling mud has to be cleaned off,” he explains. “We get two sets of vials. One set goes to the Geological Survey of Canada in Calgary,” he says.

That second set is essentially a backup.

The vials are stored in tall cabinets with dozens of shelves, all tightly packed.

Core There is no off-site backup for the core, there’s only one set, and it rests in countless boxes stacked on heavy steel racks about 4 metres tall.

One shivers in the unheated warehouse, with rows upon rows of core that look like they belong in an Indiana Jones movie. The geologists joke about the Ark of the Covenant being in somewhere in the back, like in Raiders of the Lost Ark. In many ways, this is a priceless and irreplaceable physical source of knowledge. Companies are supposed to obtain permission if they wish to remove core from the province. That permission is pretty much a given, but the government wants it back, just like a library wants its books back.

They also want it in one piece, sort of. While plugs can be taken from core, destructive testing is not normally allowed, except in some cases for potash or oilsands work. “It’s pretty rare we’re asked for destructive analysis,” he says.

Gilboy notes some concerns about core leaving the province without permission. “It’s not that they’re purposefully disregarding regulations, but rather that they may be unaware of this particular requirement,” he explains. “We just need to follow what’s happening to the core.”

Public good A core repository is essentially a common good, like a public library in many ways.

“I think the first person who started to collect core was a U of S professor,” Gilboy says. Companies and government saw the value of having a central repository, so it was established in the 1950s. At first the repository was in another building. The current building was built in 1958. They forgot about the cake and cookies for the 50th anniversary last year, however. ɸ Page A8

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A8

PIPELINE NEWS March 2009

Logs, drill cutting, and lore ɺ Page A7

Chris Gilboy, director of the Saskatchewan Subsurface Geological Laboratory, scans an old well log kept at the site.

Photo by Brian Zinchuk

boxes can be seen on the racks of the repository, Not cheap Coring is expensive, but not many.

They take a lot of Gilboy notes, estimated with a broad brush at room, so much so that about $1000 per metre. the repository has exThat varies, of course, panded in 1957, 1960, whether you might be 1964, 1986, 1997, and coring a shallow gas well 2005. “We’ve asked for in the southwest, or a another expansion bedeeper Red River well in cause the drilling rates have been really high the southeast.

“They generally want over the past year and a to core only the target half,” Gilboy says.

Is industry use of the zone they are interested in, not above or below it,” lab tied to land sales?

“Certainly we’ve says Melinda Yurkowski, one of the senior geolo- been busier for this past year than in previous gists.

Cores are usually years, going back ten about 18 m in length, years at least,” he notes “We charge people and are kept in 12 to 14 core boxes, made of card- for pulling core. The inboard. A few old wooden come from it in 2008 was higher than since the late 1990s.”

University students, however, are not charged.

Classes from both the University of Regina and University of Saskatchewan make use of the facility. Many M.Sc. students also make detailed use of the core, in exchange for a copy of their thesis.

Confidentiality “All the information for what is considered a wildcat well is considered confidential for a year. Anything that’s a development well is confidential for 30 days.”

It means that the geologists have to be careful about what they say and to whom.

When that confidentiality period is up, however, it is fair game to whomever wants to look at it. A representative for BP Alaska at the 2008 Lloydminster Heavy Oil Symposium noted with some marvel at how accessible such records are.

While most of the core is examined in a large room with long roller tables, there’s a special confidential room for looking at core in private. In there, core can be analyzed without prying eyes or having conversations overheard.

Near the confidential room is a lab where thin slices of rock can be cut, meant for examination under a microscope.

Core Repository stats: Amount of stored material: a) Core: 372,817 boxes of core are presently (end-December, 2008) in storage (no temperature control), taken from 20,953 wells; this core has a total length of about 560 km; b) Drill-cuttings samples: more than 4.1 million vials of samples are stored (in temperature-controlled area), taken from some 31,854 wells; and c) Geophysical logs: approximately 70,000 logs are in storage (temperature controlled) for use by industry clients and Petroleum Geology Branch geologists and as partial backup to the main well files in Geodata Section.

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PIPELINE NEWS March 2009

A9

Norcan helping economy with hydraulics

By Geoff Lee Saskatoon – Norcan Fluid Power Ltd. is helping to keep the growing oil and gas industry of western Canada running smoothly along with potash and uranium companies with sales and service of hydraulic components.

“Hydraulics run the oil industry,” said Kelly Thimm, branch manager of Norcan’s busy Saskatoon branch. “The oil sector has become a bigger part of our business in Saskatchewan. “We’re in the fluid power industry.”

The company has seven locations from Saskatoon to Richmond, B.C. and specializes in hydraulic cylinder repairs, including honing, testing, rebuilding, and system design, installation, and upgrading.

Norcan sells everything from directional and proportional controls and hydrostatic transmissions to high performance heat exchangers and hydraulic valves and gauges for a wide range of industry uses.

In the oil and gas industry, hydraulics are used in wellhead drives, rotary drives, service equipment and include pumps, motors, valves and cylinders.

“We do a lot of work with the wellhead units,” said Thimm. “Instead of a pump jack, a lot of companies have rows of 350 hp engines. Instead of driving a transmission to run a vehicle, it drives a hydraulic pump.”

The wellhead control system and hydraulic power unit supply hydraulic fluid to all wellhead actuators/downhole

valves and control and monitor all wellhead/downhole functions.

“We sell a ton of repairs for that kind of use,” said Thimm. “With service rigs, drilling rigs, flushbys, vac trucks, swabbing units, a lot of the applications are run by hydraulics.”

Thimm says the recent downturn in the economy has slowed sales and service to Norcan’s customers in Lloydminster, Kindersley, Swift Current and Estevan, but he notes, “We cover a lot of industries. We’re still busy. We do a lot of mining work. We have a good client base. One industry doesn’t dominate to a huge point.

“We have a complete service section as well. Companies are looking for component repair and troubleshooting and design work. We service a lot of different brands.”

Norcan’s parent company is BC Bearing Group that adds its line of bearings, power transmission, material handling, electrical and allied industrial products to the product mix.

“What makes us standout is diversification with new components, sales and service and solution and problem solving and system design to help the customer out,” said Wes Hamm, Norcan’s president.

Component repairs are made in Saskatoon at Norcan’s 10,000 sq. ft warehouse. Corporate wide, Norcan carries more than $6.5 million of inventory and has approximately 27 sales people in the field.

“You have to be out there in the field knowing what’s going on,” said Hamm.

“You can’t do it over the phone.”

Hamm has noticed a slowdown with low oil prices and says he thinks people “are not buying new and trying to get more hours out of their equipment, but we’ve been busy for quite awhile.

“I think it’s because we do service work as well. A lot of people just sell components. We don’t just do one, we do both. We are building and fixing and selling. We’re doing a lot more than just selling a part number.

“We have engineers on staff at all locations. We design hydraulic power

packs and systems and put packages together for solutions for the customer.

We can take a customer’s idea and move it to a workable concept stage which includes system schematics and drawings.

From there we can take that design and turn it into reality.”

Hamm says a trend in hydraulic is the growing use of controlling hydraulic equipment with electronics.

“It means that automation is doing more of the controlling verses a guy having to do everything manually,” said Hamm. “The controllability with electronics is a lot better than what it used to be. It makes it more efficient.”

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A10

PIPELINE NEWS March 2009

North Battleford's growth assured with planned gas turbine project

By Geoff Lee North Battleford – SaskPower is plugging into future power demands in the energy-rich area around the Battlefords, with plans to construct a $250 million, 140 megawatt power plant driven by gas turbines by 2011.

“It will certainly provide SaskPower with the ability to support new industry,” said project manager Ron Bend.

The 140 MW plant will generate enough electricity to power the equiva-

lent of 115,000 homes and will provide peak loads when power consumption is highest.

Currently, SaskPower operates a gas turbine in Meadow Lake and Landis with a major switching station in Saskatoon.

“One of the enhancements for the North Battleford area with the generating facility right there, is that the quality of power in that particular area will be improved,” explained Bend. An open

house was held in North Battleford on Feb. 25 to introduce the public to the project, solicit input about possible locations and to create a buzz about what this means to the economic future of the area.

“There is a need within SaskPower to enhance the overall capacity in our system,” said Bend. “There is a lot of future power demand to support industry, commercial and even residential growth provincially. SaskPower has to respond to that increase in growth.

“Specific to the North Battleford area, with respect to some of the resource development in that area – oil and gas – there has been large growth in that area of the province. That area has been harder to serve because it’s further away from some of our main base loading unit in the Estevan and Coronach area.

“The ability to position a gas turbine station in the North Battleford area allows for more expansion to accommodate the load requirements in the province as well as providing a more reliable, secure source in the North Battleford area where a lot of that new growth is coming from.”

TransGas will work with SaskPower to provide the metering and pressure regulating stations required and be responsible for the supply and transmission of gas to the turbines.

One of the advantages of using gas to power turbines, relative to coal fired, is its ability to provide peak power.

“We can bring it online very fast compared to other systems,” said Bend.

“It’s dispatchable. It’s brought on to meet local demand quickly. You can also locate (build) gas turbines relatively easily as long as there is a good congruence between the transmission side of it and the natural gas supply.”

The turbines have been procured from General Electric but there are numerous opportunities for oil and gas manufacturers and suppliers throughout the length of the project.

“The opportunities are essentially provincial,” said Bend. “We will be letting contracts with fabricators and or construction firms to procure some the equipment like piping and cable and

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concrete. Those materials that have to be purchased will likely be done through Saskatchewan suppliers.

“We also have to build the facility itself. We intend to go with multiple contracts broken down into various stages of the project. Construction is expected to start in August.

“Our expectation as we move through the engineering process is to keep the construction industry advised as to the nature of the contracts, the timeframe and the scope of the project,” said Bend.

One of those contracts will be to actually assemble the gas turbines on site.

As for the facility location, Bend says that decision will be made after discussions with affected stakeholder and following an internal review.

“Because we are looking at tying into the Brada switching station which is located on the southeast side of North Battleford, sites that are attractive to us are in the southeast.

“One of the advantages of being able to locate gas turbines more local to where consumption is growing is to defer potential power line projects. It allows us to have flexibility with respect to our transmission.”

The project would require switching station upgrades to accept the power load and a short transmission line to bring the power from the location of the new plant to the switching station.

The $250 million price tag includes the gas turbines and funding to pay for the natural gas. Bend estimates daily gas usage at 32,500 gigajoules.

“We also have to buy transformers that step up the voltage output from the turbines to our transmission voltage,” said Bend. “Then, there’s the cost to build the plant – build the units and infrastructure.”

The North Battleford project follows a SaskPower plan in 2009 for new electrical generation to be built with private sector partners.

TransCanada Energy Ltd., ATCO Power Canada Ltd., Northland Power Inc., Epcor Utilities Inc. and SNCLavalin Inc. have been invited to submit proposals for 100 to 200 MW peak generation projects by April 8.

PIPELINE NEWS March 2009

A11

Bill Boyd leads investment mission to China

By Geoff Lee Regina – Energy and Resources Minister Bill Boyd led an investment mission by mineral exploration companies to China and Japan Feb. 9 to 21.

Before he departed for Asia, Boyd told Pipeline News that energy investment opportunities would also be a topic for discussion with representatives from Asian companies at tours stops in Tokyo, Beijing and Shanghai.

“The purpose is to promote the natural resource sector here and to try and attract capital to the junior oil and gas companies,” he said.

“We feel that we’ve had some good contacts with the Chinese and Japanese governments with respect to that. We are optimistic that we can seek further investment from those countries in our province.”

Boyd’s optimism is based on the fact there were 4,045 oil and gas wells drilled in the province in 2008 – the second-best year for drilling behind the 4,195 wells drilled in 2003.

In addition, the province’s oil and gas industry recorded approximately $15 billion in sales and invested $4.4 billion in exploration and development while employing 29,000 people in 2008.

The mission also sought to attract capital for Saskatchewan’s junior mining companies and follows on the heels of a predominantly mining trade mission to China last November led by Meadow Lake MLA Jeremy Harrison.

Harrison is the legislative secretary to Boyd and he reported back then that the Chinese are also interested in investing in the province’s energy sec-

tor “whether it is a potential oilsands development or a conventional oil and gas operation.”

While the global financial crisis has deepened since the November trip and exploration has slowed down, Boyd sees a potential demand for Saskatchewan’s energy resources.

“In Saskatchewan, we feel that we have a very good business climate and we have a royalty structure that is very competitive.

“The Province (government) wants to open up the marketplace as much as we can for opportunities in Saskatch-

ewan.

“China and Japan are certainly huge consumers and as a result of that they buy a lot of product from around the world. They have a lot of resources to invest and as a result of that we want to talk to them about the opportunities there are in our province,” said Boyd.

“We are getting contacts from all over the world and from governments about the resource base in Saskatchewan. They are interested in investing in the province. That’s great for Saskatchewan in terms of business development, investments and creating jobs.”

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A12

PIPELINE NEWS March 2009

Village of Kitscoty benefits from proximity to Lloydminster Kitscoty – The road to prosperity for the Village of Kitscoty is a two-way street in more ways than one.

Kitscoty is a bedroom community for oil and gas employees heading east on Highway 16 to work in Lloydminster, north on Highway 897 on the Lloydminster to Cold Lake corridor and all other employment points on the compass.

The village is also a destination community for people headed to work at major local employers like the County of Vermilion River administration office and public works and utility shops north of town. There is also a collection of oil and gas related companies like Automated Tank Manufacturing Ltd. and Cave Inspection Ltd. County ratepayers from parts of 72 surrounding townships are drawn to town to conduct business while tourists and shoppers like the friendly, folksy feel and

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selection of main street retailers. Tourism is on the rise and new housing is being built to accommodate a growing population.

“The town and council have developed a program of new residential lots,” said Harold Trew, chief administrative officer. “We have a new subdivision called Southridge Glens phase four which we opened in 2007.

“Growth is coming from activity in the oil and gas sector and some from tourism. Because we are a gateway to the north for oil and gas and tourism, and being on highway 16, we will continue growing.”

More new estate home construction is proceeding at Horizon Acres just north of the village limits where 17 of 24 lots from four to five acres in size have been sold.

“We do see ourselves as a bedroom community of Lloydminster,” said Mayor Daryl Frank, who commutes to his job with Nelson Homes in Lloydminster. “We are that close to Lloyd that people gravitate there for shopping, but because of our location we think that we could be just a little bit more than a bedroom community. We could support some industry and commercial development as well.”

Automated Tank Manufacturing is the latest oil and gas related industry to locate in Kitscoty and as Trew says “as long as we can keep finding some commercial and industrial lots, the village will keep growing.

“More industry could come here. We’ve added two industrial lots in the past two years. There’s a car/truck wash interested and we’ve developed a new commercial property that will come on this March. There’s a fair amount of interest.

“I don’t think it will be long before we need more residential lots too. A lot of it is because we are a bedroom community of Lloyd, but we have the opportunity to grow commercially as well.” ɸ Page A13

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PIPELINE NEWS March 2009

A13

Location has its benefits

Mayor Daryl Frank and CAO Harold Trew are optimistic Kitscoty will continue to grow on all fronts.

ɺ Page A12 Salt City Candle Company is a Canadian distributor of candle products and has a retail outlet on the main street. Wonder Bread has also established a warehouse and distribution base in Kitscoty. Other distributors may follow suit including a reported fireplace manufacturer.

Trew also sees business growth potential from the busy county office and its outlying shops. “As they keep growing and developing – the sub trades come off of that,” said Trew. “That’s where I see us growing.”

County growth is assured given there are 3,700 kilometres of roads covering parts of 72 townships in the county’s administrative area that had 4,764 oil wells and 1,268 gas wells at the end of 2008.

“Expansion is something we are talking about,” said Glenda Thomas, county administrator. “The province keeps downloading responsibilities to us so to address

those things, we need people. At some point we have to decide if we are going to do a major renovation of this office or move it to another location. That’s a decision council will have to make.”

The county operates the largest municipally-owned gas utility in Alberta that Thomas says is “due to us servicing heavy oil. It’s cheaper for oil and gas companies to heat their tanks with natural gas than propane.

“Our ratepayers come to town to do business with us and at the same time there is a spinoff for Kitscoty. The county has 68 full time employees. We patronize restaurants. Many of our people live here and can walk to work. It’s a mutual benefit.

It’s good to have a bank here.”

Kitscoty also boasts an RCMP detachment, an East Central Regional Health Authority office, and two Buffalo Trail Regional Division schools for K-12 students. Kitscoty also has a new spacious community hall for events and recreation facilities for hockey, curling, golf, lacrosse and baseball.

“I think there is a lot of potential for any company looking for a nice, quiet and clean community to locate in,” said Mayor Frank. “Kitscoty is very open to new growth while maintaining the small town feel. “ Kitscoty is also planning to develop new trails after being selected as an active, creative and engaged or ACE community by the Alberta Recreation and Parks Association in 2008 to promote healthy communities.

“We are in the process of completing our new area structure plan to identify trails for walking,” said Trew. “Residential subdivisions are essential to our growth and so are things like trails so people can walk and have a safe community.

“Planning is continual process but it gives us direction. We are in the process of preparing more land for industrial use.”

Water is not an issue for growth as the village as plenty of water from its municipal wells. “It’s very good water,” said Trew. “We don’t have to treat it very much.”

The village water tower, which was acquired from Lloydminster in 1976, holds 72,000 gallons of water during the summer and can be used to fight fires.

If plans to build a regional water system of potable water from the North Saskatchewan River with a consortium of municipalities are realized, Frank says added to what water the village has now, “we could double our population.”

Kitscoty also has standby generators for all of its utilities including the municipal water treatment plant.

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PIPELINE NEWS March 2009

Eureka moments ¿ll Oilman of t Lloydminster – Why me? That was Frank Jezowski’s first thought when Monte Armstrong from the Lloydminster Curling Club called to offer him the role of Oilman

of the Year for the Lloydminster Heavy Crude Oil Bonspiel March 18 to 22.

“I was surprised and wondered if they didn’t have somebody else,” said the 66 year-old retired

oilpatch mechanic. “I thought for a few seconds and decided I would take it. It’s quite an honour.”

Jezowski speculates he got the nod based on his long-term role on the

bonspiel committee and his reputation in the oilpatch as an inventor.

In his last two jobs in the surface pump division of Corlac Industries and National Oilwell Canada Ltd., he designed a topmounted compressor that was easier to access and maintain.

“I invent things hands-on,” he said. “If there is a need for it, I will see if I can make it or improve it. I got the idea for the top-mounted compressor from mechanics complaining about trying to do a service job.

“They had to ‘stand on their head’ and work through a plate on the side. That didn’t sit well with mechanics. I decided we could set the compressor on a table and drive it from underneath with a motor. The motor hardly needs any repairs but the compressor has to be maintained every six months or so.”

One of Jezowski’s tasks as Oilman of the Year is to prepare his biography of his career and accomplishments and credentials. If he misses noting any of his inventions, we’ve got the main ones covered in this story.

While working as contractor for Murphy Oil Corporation, in 1994, repairing trailers and water trucks, he filed a patent for air brake anchor spring pliers to remove and install anchor springs for Rockwell and Frue-

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This was Àrst working prototype of his patented air brake anchor pliers. He makes everything in his garage shop.

hauf brakes. The pliers also have an adjustable setting for easy installation of Eaton brakes.

Previously mechanics used screwdrivers and vice grips and Jezowski says “that could cause missing teeth.”

Early plier manufacturing was a family affair.

Jezowski’s son, Blaine did the welding; his daughter Chatherine buffed and prepped the hinges for welding and his wife Claudette handled the finished buffing.

Sales took off when staff at Fort Garry Industries in Lloydminster demonstrated the tools from a product display.

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ers for second-generation brakes that are made and sold by Ginont Manufacturing and Distributing Ltd. with royalties going to the inventor.

Jezowski grew up on a farm at Fertile, Saskatchewan, and inherited his mechanical genes from his dad. “I got a lot of practice tearing apart equipment that I shouldn’t have,” he said. “I paid attention to how things were taken apart so I could put them back together. There was always a logical way to put it back together.”

Jezowski launched his mechanical career in 1967 as a shop foreman for Butin Farm Equipment. He has a motor vehicle mechanical repair interprovincial ticket and a heavy duty mechanical ticket.

He came to work for Waugh Construction in Lloydminster in 1980 as a mechanic servicing trucks and tractors. He also bought an oil rig moving truck and leased it to Waugh for about three years.

The day Pipeline News showed up at Jezowski’s house, he proved he was busier than ever in retirement installing one of his latest inventions – a positive air shutdown in the diesel truck of Chris Husch, a contractor for Rife Resources.

If a diesel truck breathes in propane or a condensate of natural gas, the engine will rev out of control and it will blow up.

“The positive air shutdown shuts off air to the engine,” explained Jezowski. “It starves the

PIPELINE NEWS March 2009

A15

the Year’s accomplished career engine of air and shuts it down.”

Jezowski makes an air shutdown specifically for a Mac truck and a universal model for other trucks in his garage shop from parts purchased locally.

His homemade shutdowns retail for approximately $700.

Compared to factory units, Jezowski says his are simpler to install and are more reasonably priced.

While Jezowski has invented a lot of devices during his oilfield mechanical career, he says the downside of inventing is patents. “In Canada,

it can take up to two and half years,” he said. “Patents to me don’t mean a lot. If someone changes it a bit, you haven’t got it anymore.”

Jezowski says there are a lot of inventors like him who have helped to grow the oil industry. “There are a lot of people out there who think there is a better way to do something and they figure out a way to do it better,” he said.

“Lloydminster is probably the invention capital for heavy oil. Most of the inventions for heavy oil have come from Lloydminster. It’s because

of the need.”

Jezowski also worked for Lloyd Truck Centre, JED Anchors Ltd. and Waterflood Service & Sales Ltd. in Lloydminster. Somewhere down the line, Jezowski had another eureka moment to invent a swivel so hoses used to connect tractor trailers wouldn’t kink.

Jezowski said he often wakes up in the middle of the night with an idea and has it all figured out in the morning. His wife Claudette confirms the sleep disruptions.

Jezowski might credit another early morning

brainwave for his plan build a Saskatoon berry sorter in 2007.

“I built it and it ran for eight hours before two guys saw it and they wanted one each so I had to build two more last winter,” he said.

The inspirations are never ending as Jezowski is currently building parts

Plate Compactor TM15 Frank Jezowski, installs one of his homemade positive air shutdown units in a truck diesel engine for oilpatch contractor Chris Husch.

$1550

for a walking bridge to span a 62-foot wide creek “for his wife’s sister’s boyfriend” in Manitoba.

“He’s a nature who nut has property on the other side of a creek that he can’t get to,” explained Jezowski. “The bridge will be 72-feet long and will sit on the banks of the creek.

It’s a rafter structure four

feet wide.”

Curlers can learn more about Jezowski’s inventions when he and his wife are introduced at a pre-tournament banquet March 16. The couple will also attend the opening ceremonies March 19 the players’ banquet March 20 and trophy presentations March 22.

A16

PIPELINE NEWS March 2009

Leaving no footprints

Saskatoon – Do not disturb. That’s the approach Maverick Construction, based in Saskatoon, takes to the environment when seismic clearing and mulching for energy clients in Western Canada.

It’s called low-impact seismic using specialized shredders, mulchers and grinders that don’t leave a lasting footprint on the terrain.

“When we mulch with these units and make a path for access, it doesn’t disturb the root system,” said Maverick president, Ron Bodnar.

“It promotes quicker regrowth. When you mulch, there is a lot of organic matter that is fed back as nutrients to regrow the vegetation.”

With mulching for seismic clearing, there is no need to burn cleared debris and there is no added cost of hauling, dumping or chipping.

Exploration companies rely on seismic programs to help locate oil and gas reserves and use the services of companies like Maverick to cut brush through forested areas to lay out access lines.

The lines allow energy and other resource companies to survey the subsurface geology using shock wave reflections with 2D or 3D tools.

For the energy sector, 3D seismic tends to result in fewer dry holes, more optimized well locations, guidance for horizontal drilling projects and a more complete evaluation of mineral rights than 2D. “There is a difference between a 2D and a 3D seismic, but in both cases, they need lines cleared so that can locate their drill point or shot points,” said Bodnar.

“There is a variance that a lot of companies will allow, so that we can pick damaged areas to cut or areas that are not as vivacious. It can be done very selectively on a grid system.

“The 3D system is really a grid system. The 2D program is just a variety of long lines that could range from one to 17 kilometeres.”

This a typical doglegged seismic line that Maverick mulched this winter near the Saskatchewan/Alberta border.

Photo submitted

A couple of different lines are required for clearing to allow an exploration to access their shot points to drill to proper depths to put their loads in. A line is also needed for access to tie the detonation wires to the shot point for a 3D system.

“We have machinery that allows us to go in and cut lines at a very minimal disturbance,” said Bodnar.

“We cut by avoidance, so we don’t cut the healthier trees.

“We have specialized mulchers in our fleet in different widths and horsepower depending on what the client needs. We can cut right to the ground or leave it as a brush. With mulching you cut the vegetation and it stays on the ground.

“There are better opportunities for reclamation when you mulch. For seismic, the end product stays on the ground.”

With the economic slowdown, Bodnar is seeing fewer junior companies doing exploration this year, but says Maverick has a diversified client base.

Mulching isn’t just for 2Dand 3D seismic but can also be use for clearing access roads and camps and core hole drilling.

“The oil industry is our backbone with seismic and pipeline clearing,” said Bodnar. “Pipeline clearing is a good part of our business because, again, with mulching they don’t have to burn, pile or bury brush. It eliminates a lot of those processes.”

Most recently, Maverick crews were cutting seismic lines for clients in the Athabasca Basin since mulching in winter minimizes damage to the environment. The mulch mixes with snow and creates a hardened path above the surface for walking or snowmobiling. Mulch is also beneficial for wildlife.

“A short time after you mulch there is a certain aroma that a lot of animals are attracted to,” said Bodnar. “It’s like they smell the food. In areas where there are deer, you can go back a few hours later and you will see deer feeding on those lines and cleared areas.”

Maverick’s low-impact equipment is guided by GPS which allows the operator to maneuver on line to minimize disturbance.

Maverick has a branch office in Sylvan Lake, Alberta and has between 20 and 40 employees on staff depending on the season.

Bodnar says Maverick’s advantage over the competition is experience. “We have a terrific amount of experience and we are shroud operators. We know what areas are suited for mulching. We have done enough jobs to know the client wants.

“If we are cutting wood, we try to pick the dead stands which have the lowest impact. Also, there are no windrows created with mulching,” added Bodnar.

“In the northern Alberta you have to be cautious of the caribou routes. Caribou don’t want to cross windrows, so you have to try to leave the ground in a natural state. If you make a blockade it re-routes some of the wildlife.

“Mulching is as natural of a land reclamation system as you can get. You don’t have to go back and reclaim it and plant trees. It’s already done.”

PIPELINE NEWS March 2009

A17

TransGas taps into information pipeline

By Geoff Lee Regina – TransGas Limited is using the information pipeline to show potential investors in Alberta how easy it is to tap into some of Saskatchewan’s estimated 89 billion cubic metres of recoverable gas reserves.

The Saskatchewan Natural Gas Advantage Workshop held in Calgary, Feb. 25, walked potential investors through Saskatchewan’s upstream natural gas business.

Topics included everything from acquiring mineral rights to how to tie into the transmission system with speakers from variety of government agencies on hand.

TransGas, a wholly owned subsidiary of Crown corporation SaskEnergy, collects natural gas through its pipeline system and transports it to SaskEnergy’s distribution system for delivery to customers.

Out- of -province gas flows through the pipelines of TransCanada Pipelines Ltd., Foothills Pipe Lines Ltd. and the

Williston Basin Interstate Pipeline. TransGas is also responsible for natural gas storage caverns and fields in the province.

“The main selling point is that we are a very responsive organization,” said Jim Perfect, TransGas manager of transmission, storage and marketing.

“We are probably one of Canada’s best kept secrets as far as the potential for natural gas goes.

“What we’ve found out over the years, is that a lot of people from Alberta hadn’t considered taking a land position here. Some of the companies had misconceptions that was tough to do business here and that there were a lot of bureaucratic problems.

“So for the past few years, we’ve been putting on a workshop in Calgary with the idea representatives from the ministries of environment, agriculture and energy and resources, among others, would explain this is not a difficult process at all.

“It’s quite favourable for Albertans to do business in our province. We

“

We are probably one of Canada’s best kept secrets as far as the potential for natural gas goes

”

- Jim Perfect want to encourage companies to come here and develop the reserves and put their gas in our pipelines.”

Perfect says the first step for Albertans to tap into Saskatchewan’s gas reserves is to “take a land position and shoot seismic for development.

“Having representatives from the government explain the processes is helpful to people who haven’t done business in Saskatchewan before,” he said “This is a marketing opportunity “We usually get somewhere between 150 to 170 people out. We have had some small junior companies come out and take a small position in the province.

“We hope to attract some new producers who haven’t done business with us before.

The workshop will cover topics such as the environment, geology and gas formations and royalties.

Perfect noted during the past few boom years, there has been a lot of exploration activity in the southeast part of the province “proving up a lot of gas.”

From 1998 to 2007, there were 14,885 natural

gas wells drilled in Saskatchewan.

Despite the current downturn in gas exploration in Saskatchewan, Perfect says people in Alberta are starting to learn Saskatchewan’s royalty structure is attractive.

“We are very attractive with royalties for some of the lower production wells, which most of the wells are in Saskatchewan,” he said.

“It’s not tough to do business here. It’s just a little bit different from Alberta. We have different procedures.”

This year’s workshop came on the heels of a gas

rate reduction application by SaskEnergy from the existing rate of $8.51 per gigajoule to $6.23 per gigajoule effective April 1.

For a typical residential customer, this 27 per cent commodity rate decrease will mean a saving about $20 a month, if approved by the Saskatchewan Rate Review Panel.

“With the significant slowdown of the North American economy, commodity prices, including natural gas, have fallen, which is reflected in our application,” said Doug Kelln, president and CEO of SaskEnergy in a news release Feb. 17.

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A18

PIPELINE NEWS March 2009

Robotic tank manufacturer aims to cut production time and labour costs Kitscoty – Fully automated, just-in-time tank manufacturing using robotic welders is a little more than a wink away from reality at Automated Tank Manufacturing Inc. in Kitscoty.

“Our goal is to produce a higher quality tank going out to the marketplace through a single pass welding process done through robotics,” said manager, Joe Bowser.

Two robotic welding

arms will be delivered and installed in coming weeks and will allow Automated Tanks to manufacture two tanks a day when it goes into full operation.

In the meantime, the company has just com-

pleted its first semi-automated manufacturing process with the installation of a lifting, rotating device fitted into a 32-foot deep hole in the shop floor.

The idea is to feed steel into place to form the circular sections of the tank that can be lower, raised and rotated, enabling the welder to remain in one position while the vertical and horizontal assembly is done.

“This is a lot safer and a faster way to manufacture a tank,” said Bowser.

“With each course of steel to be added to the tank, we lower the tank into

the hole. As it rotates, we weld it and then we complete the roof structure.”

Work is also progressing to outfit a second 32- ft deep hole with a similar elevating device, one of which will evolve into a fully automated robotic tank manufacturing process.

“With our existing staff, we can now roll out four tanks a week,” said Bowser. “With a second semi-automated station, I am looking at putting in a second team. I am looking at hiring another five people down the road.”

Bowser says despite the economic slump,

Joe Bowser who manages Automated Tank Manufacturing in Kitscoty is an efÀciency expert.

Trucks can pick up Ànished tanks in the yard within 30 minutes.

Photo by Geoff Lee

there is a continuous demand for flow tanks in the marketplace.

“Drilling slows down but it doesn’t stop,” he said. Bowser says orders for tanks would pick up if oil tops the $50 US level.

“It would give use great comfort to see it there because we know the amount of holes that would be drilled would increase significantly,” he added.

“Our customer base is starting to grow. More and more people are gaining knowledge of our manufacturing techniques and the fact we are very responsible about how we want to deliver it.

“We are a one stop shop. We manufacture tanks, insulate them, paint them and now we do internal coating on site. The only thing we contract out is sand blasting and that might change.”

Automated Tanks was launched last summer after a few fits and starts over staffing and steel supply issues, but the initial goal to move toward robotics has never wavered.

Work began on the design, engineering and development of the semiautomated system last July with fabrication work from Grit Industries and engineering services provided by PFM, (now part of Bar Engineering).

“Every company we have utilized is in the Lloydminster area,” said Bowser who has a lengthy list of who to thank and invite for a progress inspection.

Automated Tanks is well into the test manufacturing mode with the lifting, rotating device that Bowser classes as being semi-automated.

“We want to make sure what we are doing is right prior to putting the robotics in,” he added.

“We will continue our day-to-day manufacture of 750 bbl and larger tanks based on what our customers’ needs are.”

A pair of robots will do the long seam horizontal and vertical welds and they should be ready for testing in a few weeks with a production target of June. ɸ Page A19

PIPELINE NEWS March 2009

A19

Domo arigato robotic welders ɺ Page A18 “This won’t replace any of existing welders but it greatly reduces the amount of staffing that we will require in the future,” said Bowser.

“We will continue to use our welders for the nozzling and plasma cut outs and other aspects

of manufacturing a tank such as ladders and platforms.”

Bowser says robotics will lead to a 40 per cent reduction in manufacturing time to produce one tank along with reduced manpower.

“It will make us highly competitive with

Terry Forget is the site supervisor working on testing the semi-automated tank manufacturing devices.

Photo by Geoff Lee

just- in-time manufacturing,” he said. “It greatly reduces the amount of stock we have to carry on site. What we manufacture is just on time so it’s moving off the lot.”

Automated Tanks is located on a 22-acre corner property near the junction of Highway 16 and Highway 897 with plenty of room to grow.

The site features the manufacturing shop and an adjacent insulation and paint shop.

Double overhead gantry cranes move the tanks, which can range in size from 400 bbl to 2,000-bbl capacity, manufactured to a high API 650 standard. Once they are finished, they are stored outside for easy pickup.

“When a truck pulls in here to pick up a tank at 7:30 a.m., they are off our site before 8 a.m.,” said Bowser. “From the time they arrive, cradle up and leave, it’s 30 minutes maximum.”

Efficiency was on

the mind of the group of investors who formed the company and asked Bowser to manage the business.

“There are a whole lot of business people who have put their faith into a change in the way this industry moves,” said Bowser. “They believe that automation is the future. They’ve gone to mobile robotic units

now on the pipelines and with high pressure water systems.

“I think gradually companies will be forced to move that way due to a lack of skilled labour.

Skilled labour in our industry is mostly mobile and transient.

“When you get a company like this, you have to take a look and design something that

is going to keep people today. What this does is provide long term job security. Our employees are excited about it. They get paid well and they get good benefits.

“We have been very cautious about the people we hire and we’ve been very fortunate that the people we have hired are a big part of what this company is today.”

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A20

PIPELINE NEWS March 2009

Hurricane Industries diversi¿es Lloydminster – Hurricane Industries Ltd. is best known for its foam circulating fluids used for sand cleanouts of heavy oil wells, but hopes to grow its new pressure service division.

Hurricane Industries’ most common foam treatments are stable foam cleanouts, foaming disposal wells and gas well foam cleanouts.

“Foam basically under-balances a well and gives the formation a chance to produce oil, wa-

ter, and sand,” explained general manager Tom Fisher. “It promotes an in-flow of oil to the well bore from the formation.

Hurricane Industries has numerous varieties and uses of foam including high temperature foam for steam wells.

“The future will be in thermal with foam,” he said. One of Fisher’s associates, Howie Cayford introduced foam to Lloydminster in 1970, with Border Drilling Co. Ltd. Hurricane Industries

Howie Cayford (left) met up with his friend, Tom Fisher, general manager of Hurricane Industries to double up for a photo of a new pressure truck.

also hopes to generate a storm of interest in its new mobile pressure testing service for pipelines in Alberta and Saskatchewan.

Two service trucks were acquired late last year to fit manager Fisher’s plan to diversify and grow the company. The trucks will also allow Hurricane to perform hydro testing, cement squeezes and inhibitor and chemical services for oil and gas wells.

“We want to get into different things and get established in this area of the business,” said Fisher.

“We want to make the company grow. We want to be all over Alberta and Saskatchewan. I still want to be here when I am 70.”

One of the trucks is a 2004 Ford F550 4X4 with a two compartment tank that will haul chemicals for well stimulations or a water and methanol mix for pipeline pressure testing.

The second truck is a revamped 2001 Freightliner with a 12 cubic metre tank for pressure testing new pipelines – a

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“You have to have experienced operators and a good price. We’ve been established for a long time and we have a lot of contacts. We will go wherever the work is.”

In the meantime, Fisher is looking beyond spring breakup for oilpatch activity to pick again. At age 66, Fisher has experienced all of the booms and busts since 1963 and he thinks the current slump could be rocky because of the higher volume of oil

companies, vendors and employees than in previous downturns “It affects a lot more people,” he said. “No one knows what’s going to happen after breakup.

“I think in order for a company to grow you have to be diversified.

That’s why we decided to get into clean pressure trucks last fall. The thinking is, in case things slow down in one area, they might pick up in another.

This is a way to keep people busy.”

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Hurricane Industries can also use the trucks to test gas pipelines for high pressure. The truck operator will perform a hydro test on the flow line.

“Anything that you flow fluid through has to be tested,” said Fisher.

While the economic downturn has slowed demand for pipeline pressure testing Fisher says, “If you have a new idea, oil companies will run with it.

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A21

Reliance Safety ¿nds its niche Lloydminster – Reliance Safety Supply & Services Ltd. is a new division of Reliance Industrial Products that mirrors the experience of safety sales manager Dennis Cole.

Cole was a full-time firefighter for 15 years with the Gander Fire Department in Newfoundland and worked four years as a safety manager for Schlumberger in Lloydminster before helping to launch the Reliance safety division last May. “Instead of preaching safety, now I’m selling safety,” said Cole in his new role. “It’s easier to talk safety with clients because I understand what they need. “ The company began as one of five authorized Scott Air-Pak distributors and repair centres in Canada for the oil and gas industry. They also sell and service personal gas monitors for energy workers doing jobs in confined spaces or near H2S gas.

“After the first few months, business picked up tremendously, “said Cole. “ Now, a lot of servicing is getting done during the slowdown.

“Scott Air-Paks must be tested every two years to make sure the proper amount of air is flowing through. We check to make sure there are no leaks and everything is sealed.

These are contained units.”

In the shop the Air-Paks undergo a series of tests including a computerized flow test and a hydro test of the air cylinders to determine if they still in good working order.

Cole also performs a complete visual inspection of the air cylinders and will clean and disinfect the breathing masks and check for wear in the cylinder harness.

The harness cylinders are also refilled with breathing air with a normal 21 per cent oxygen content at 2216 PSI. The air tanks are metal or have a light-weight outer shell of carbon fibre.

Reliance also has a supplied air system with large 4,500 PSI air cylinders for up to eight of hours for air supply for workers cleaning tanks or working in any atmosphere that is hazardous.

Cole’s experience as a firefighter has prompted Reliance Safety to tap into a steady regional market of sales and service of fire extinguishers and fire fighting

gear.

“We sell everything but the truck,” said Cole who is a volunteer firefighter in Lloyminster. “Local fire departments were glad to have a local supplier who can service their equipment.”

Reliance Safety built their own mobile service truck to service their energy and firefighter clients on site. The front part of the truck is equipped to empty fire extinguishers, clean the valves and refill the tanks with a dry chemical and re-pressure them with nitrogen.

The back of the truck contains 10 of those 4,500 PSI air cylinders that can be used to fill up to 60 of the portable 2216 PSI Scott Air-Paks.

“In the event of a fire, we could drive the truck to the scene and refill the cylinders used by fire fighters,” said Cole. “Most fire departments use Scott Air-Paks. They are the best in the industry for air packs.”

Reliance Safety also sells fire fighting clothing including gloves jackets and pants.

When it comes to knowing top quality equipment Cole says, “I’ve worn the best and the worst of fire equipment. The fire equipment and service side of the business for firefighters is a natural angle for me.”

During the September 11, 2001 attacks on the World Trade Centre when 38 jets bound for the United States were rerouted to Gander Airport, Cole put his firefighter skills to use.

He was the ground transportation coordinator for more 6,500 passengers who entered and exited the terminal during the four day crisis.

When he comes knocking at your door at as Reliance’s safety manager, ask him to share his incredible story about how all of the people of Gander came to the rescue that fateful day.

Cole can also tell you about his plans to expand the safety shop and set up more Safety Supply & Service divisions within all of the Reliance Industrial Products stores in Western Canada.

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A22

PIPELINE NEWS March 2009

CAD manager Chris Milley pulls off a pipeline plan from the map plotter at Altus Geomatics in Lloydminster.

Photo by Geoff Lee

Altus Geomatics surveys new way to diversify in downturn

By Geoff Lee Lloydminster –Altus Geomatics, a Calgarybased land survey company specializing in oilfield surveys is scanning the economic landscape at its Lloydminster office for ways to diversify and keep crews busy until oil prices and drilling rebound.

“Drilling activity is way down and drilling is what keeps us going,” said Jim Clarke, director of the Lloydminster

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branch that specializes in surveying well site leases and pipeline right of ways.

“Up until the last few months, it’s been going year-round,” said Clarke.

“We have seven crews but there is no activity going on right now. We are slowed right down.

“Activity started slowing down in December and since January, there has been very little work. We are not surveying many new leases right now.”

Survey staff are using the downtime to catch up on restoration and pipeline plans to get them registered and take on work in Altus’ western Canadian locations in Medicine Hat, Grande Prairie, Edmonton, Lloydminster, Yorkton, Regina and Weyburn.

“The area that is holding its own is the Weyburn-Estevan area,” said Clark, in reference to drilling and lease survey work. “It has slowed down too, but it was at such a fast pace that it’s still holding its own down there. For how much longer I don’t know.

“Because we are a large company, we can move guys around if the work is available. We do a fair amount of that.”

Clarke has sent some of his crew to Altus’ Edmonton office for work in the far north and a local crew is also doing

survey work for a potash company in Humboldt, Sask.

Corporately, Altus offers clients a full range of geomatic and survey services including 3D laser scanning, GIS development and all types of mapping products.

Altus’ partnership with Ezra Consulting Ltd in 2007 opens doors for additional work through Ezra’s expertise in forestry planning, government permitting, route selection, environmental field reports, construction and the legal surveying of right of ways and facilities.

More diversity for Altus in Lloydminster may flow from the new federal budget announcing $12 billion for infrastructure projects. The Saskatchewan government also announced an immediate injection of $131.6 million for infrastructure through a new Municipal Economic Enhancement Program in February along with $31.6 million for provincial-federal Building Canada Fund for new projects that may require surveying.

“If some of that money trickles down to the municipal level for road widening surveys and stuff we would certainly look at doing some of that work,” said Clarke. ɸ Page A23

PIPELINE NEWS March 2009

Any type of work is positive

Jim Clarke, director of Altus Geomatics in Lloydminster.

Photo by Geoff Lee

ɺ Page A22 “Any type of work is positive. The type of work we would normally turn down we would not turn down now, like municipal work. We will likely make ourselves a little

“

the position of the well within a quarter section of land with the coordinates. The area for a lease is usually a 100-metre square block.

The plan shows where the access road is

Activity started slowing down in December and since January, there has been very little work. We are not surveying many new leases right now

”

- Jim Clarke more visible to the RMs and visit their offices and drop off our cards.”

Altus faces competition from four major survey companies in Lloydminster and there may not be enough work now to keep all of them busy.

“I think we have all done very well in the last while,” said Clarke.

“There was a lot of work for all of us. That’s likely not the case right now.

Last year was excellent. Sometimes it was a struggle to keep our clients happy and get the jobs done in a timely manner. Right now that is not the problem.

“Our economy is driven by the oilfield and if the oilfield slows down then they stop building houses and everything.

We hope things will pick up in the third quarter.”

At the Lloydminster office, staff draft plans on a computer. An Altus well site plan includes

and how wide it is and includes the elevation and ground elevation of the corners.

These plans also show all of the typography around the lease, including low areas, lakes, sloughs and creeks and if the area is natural or cultivated land.

Clarke says the usual protocol is to work with the oil company consultant to determine the best place to drill. “The oil company makes the decision and we survey where they want it.”

Most of Altus’ work with pipelines in the Lloydminster area is planning for small gathering systems.

“Typically, heavy oil is trucked but they will run fuel gas lines to all of the wells and there are right if ways to be surveyed,” said Clarke.

“All natural gas has to be shipped by a pipeline so there will be a gathering system of right

of ways to a compressor and from a compressor out to a main compression line.”

Corporately, one of Altus’ largest pipeline projects involved surveying the rights of way for 800 km for the Alliance pipeline from Fox Creek, Alberta to the Saskatchewan border with 95 per cent of the work completed using a real time GPS system

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PIPELINE NEWS March 2009

Non - destructive welding tests keep Cave Inspection on the go contains what’s called a radioactive source or a pigtail assembly with two to four, one millimetre diameter radioactive wafers to expose a film negative of the weld.

“It’s similar to when you get an x-ray for a broken bone. We are doing virtually the same thing except with metal,” said Greg.

At the job site, safety equipment is set up and the camera is hooked up to a lengthy drive cable.

The cable allows the op-

erator to keep a safe distance between him and the radioactive source.

The drive cable moves the source out of the camera to the end of the cable to expose the film placed on the opposite side of the weld being inspected.

“We take three exposures for every weld,” said Greg. “The radioactive material exposes the latent image on the film which we develop in the mobile darkroom and gives us a 2-D image of the weld.

Greg Braham connects a drive cable to a radiographic camera device used for non-destructive tests of welds.

Photo by Geoff Lee

By Geoff Lee Kitscoty – You can’t see a defective weld with the naked eye. That’s why Cave Inspection Ltd., a growing mobile, non-destructive testing company, is called on to test the quality of welds in field equipment such as pipeline and batteries.

The company’s specialty is radiographic inspections but they also do magnetic particle, liquid penetration and ultra sonic thickness nondestructive tests.

Cave has an active fleet of nine trucks and four spares to service contractors and oil companies in Alberta and Saskatchewan from its base in Kitscoty.

“We are testing for

the integrity of welds and quality of metals,” said Cave owner, Dean Braham. “It’s a federal government requirement so companies are doing their due diligence by hiring us. We have over 200 companies that we work for.”

Cave’s major clients include Husky Energy, EnCana Oil and Gas and Canadian Natural Resources. To accommodate future growth, Cave will shift its operations from Dean’s acreage north of Kitscoty to a new shop in the village that will include new office space and room to park all mobile test vehicles.

Each vehicle is equipped with the latest Delta and Sigma 880s

series radiography camera or exposure device, and a mobile darkroom.

“With radiography, we are primarily looking for welding quality,” says Greg Braham, who is a level three technician in radiography and Dean’s brother.

“Each weld has a specific code it has to adhere to. We are looking for defects in that weld.

If they exceed the code specs, the welds have to be repaired.”

The exposure device

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“If there is a defect, we mark where the defect is on the pipe weld. The film has location markers so you know which part of the weld you are looking at. You mark the area the defect is in, flag it and notify the contractor.

Whoever did the original weld would be asked to repair it.”

Because Cave works with radioactive material, they are tightly regulated by the Canadian Nuclear Safety Commission. ɸ Page A25

PIPELINE NEWS March 2009

A25

Strict rules with nuclear energy ɺ Page A24 “We have very strict rules we have to adhere to,” said Greg. “With us being nuclear energy workers, we are trained and knowledgeable to work with radiation.

Everyone is very knowl-

edgeable in case of an emergency.

“It’s members of the public or people coming onto to a job site that don’t know the hazard associated with radiation. It’s our job to make sure they are not

exposed to any unnecessary radiation.”

Radiation detectors are standard equipment. Every 75 days, the radioactive source material depletes by half. About every six months, Cave exchanges their depleted radiation source with a fresh one. When not in use, the pigtail assemble is stored inside the protective exposure device which is safely locked in specialty stainless steel containers during transport and lock up.

Dean says nondestructive testing is a good business to get into but adds “it’s tough now to get a licence to own the radiation, so

we are happy to get in when we did.

“The business is getting big enough where we can warrant a shop in town to have more exposure and to move it out of this residential yard.”

“With the personnel we have, hopefully we will get by this slow time and build and grow. I hope to have 40 or 50 employees in the next five years.”

Dean got his business start through his senior hockey connections with the Kindersley Clippers started by NHLer Brian Skrudland and his brother Barry.

Dean attended

Notre Dame College in Wilcox, Saskatchewan on a midget hockey scholarship and was a member of the Memorial Cup champion Prince Albert Raiders in 1985. Greg played hockey for the WHL Flin Flon Bombers in 1994-97. He commutes to work from Lloydminster and has a son who is just getting into hockey.

Hockey is a sport that Dean says “has been a great building block in my life. When I came to play in Kindersley, I needed a job and they stuck me in a radiation truck and I started from there.”

That company was

AM Inspections and Dean moved to Lloydminster to set up an office for AM. He started Cave in 1995 and says choosing that name that instead of a numbered company was a no brainer since his nickname has been Caveman since he was 14.

He picked Kitscoty because that’s where he moved to after he arrived to work in Lloydminster “Lloyd was booming at the time and I thought it would be cheaper in Kitscoty, plus it’s a small town for the kids,” he explained.

Dean has two sons and two daughters.

Behind Cave Inspection owner, Dean Braham is a picture of himself with his former teammate and NHLer Dave Gertz (Penguins) when the pair played on the Memorial Cup winning Prince Alberta Raiders in 1985.

Photo by Geoff Lee

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PIPELINE NEWS March 2009

Infastructure funds help Great Plains

Carson Shea, a power engineering 4th class student gets hands-on experience during a Àre protection course at the Energy Training Centre in Kindersley.

Photo submitted

Swift Current – Working in a confined space is one of the health and safety courses taught at Great Plains College Campuses and a long time expansion restraint for the college.

The space dilemma will be resolved soon thanks to an injection

of $13.5 million of infrastructure funds to upgrade classrooms, labs and shops with most of the money earmarked for the main campus in Swift Current.

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tem and will allow the college to grow its academic, trades and energy facilities in Swift Current and satellite campuses including the Energy Training Centre in Kindersley.

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renovated space,” said college president Mark Frison.

“Those projects will relate to the energy sector in some ways. The number one priority here (Swift Current) is for improved and expanded shop space for trades.

“We have an energy sector committee that been telling us we need to be doing more trades training on a variety of fronts. Space was a limiting factor.”

“One of the things we’ve tried to identify in our strategic plans is to broaden the base of the programs we offer.

This year, we are looking at putting in five new courses on the energy training side.”

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plumbing, pipefitting and welding are some of the oil and gas related trades courses that can expand along with the new renovations planned at the Swift Current campus.

“The funding will allow us to continue on our path of growth by ensuring students are receiving a quality service,” said Frison who hopes to tap into additional federal infrastructure funding for colleges announced in that budget.

Great Plains also offers its health and safety courses aimed at the oilpatch at its smaller campuses such as Maple Creek, Shaunavon, Macklin, and Rosetown and Warman.

“The safety training courses have been growing for the last five years,” said Frison. “Even when the (oil) economy was hot, our traditional academic program has grown 30 per cent in the last three years.

Frison attributes the growth to better marketing, better course selection and a shift in course profile toward more trades-related courses like power engineering.

“These are the courses students have been anxious to get into,” said Frison. He also notes interest in driver training courses has been fairly steady.

“In Swift Current it’s driven partly by the oilpatch but also by farming and long-haul transportation.”

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in Kindersley. Program coordinator Willi McCorriston says with the slowdown, it’s difficult to put a timeline on when new courses will come on stream.

“We are investigating what other courses industry requires,” she said. “Hopefully, over the next year, we will identify some new opportunities.”

In the meantime, registration for standard oil and gas training courses like H2S, confined space, first aid, WHMIS, and Transportation of Dangerous Goods is picking up as spring breakup nears.

“On top of that we have a new focus on fall protection,” said McCorriston. “We built a portable fall protection simulator. That’s one that we intend to expand on in the future. New legislation requires new training and we try to stay on top of that.”

The Energy Training Centre in Kindersley is the equivalent to the Energy Training Institute offered by Southeast College in Estevan. The course list covers everything from all-terrain vehicle safety and pipeline construction safety to snowmobile safety and well service blow out prevention.

“Our course offerings are similar to Estevan in terms of what’s available to the oil and gas industry. We offer what people need,” said McCorriston.

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PIPELINE NEWS Saskatchewan’s Petroleum Monthly

B-Section March 2009

Ron Carson

Big success from a small town

By Brian Zinchuk Lampman – It’s one of the biggest, if not the biggest, oilfield construction operations in southeast Saskatchewan, with seven locations and a staff that peaked at around 900 last year. It’s all based in Lampman, population: 635 (2006 census).

The company is Carson Welding and Maintenance.

About 250 people report to the Lampman location. Not all are from Lampman compared to the size of the community but it’s a huge chunk of the local workforce.

Carson Welding and Maintenance was started by Ron Carson in 1974.

Since then, the company has grown substantially, but right now is dealing with the slowdown that has come with oil down over $100 from its peak last summer.

Employment numbers are down as well. In early February, Carson notes, “We’re around 750 overall.”

“We see a big slowdown with the price of oil the way it is. It was so busy.

The activity level is decreasing gradually as we speak.’

Carson says that’s mainly because clientele’s budget’s saw a great reduction in cash flow. Drilling programs are curtained in most cases.

On the bright side, Carson says, “It’s the first time we’ve seen it stay consistent as long as we have.”

“The way we deal with it is the same as our clients. We put a hold on all capital expenditures, use surplus trucks, trailers. Reign in expenses.”

The shop construction projects already underway were budgeted for. “We’re basically finishing what we had started.”

“The worst part about it is when the workload decreases we have an excess amount of staff. That’s what always hurts. That’s the sad part about it. Six months ago, we couldn’t find people, now we have too many. The hard thing to accept is a lot of people get hurt financially.

We keep as many people as humanely possible. We know we’ll need those people some day. The question is when?”

Carson is not expecting the slowdown to be short term. “I totally expect it won’t get going after breakup. I’m hoping to see some light at the end of the tunnel at the fourth quarter this year. It could be six months of this.”

Asked if the high land sales of 2008 will make a difference, Carson says, “It helps the workload. There has to be some wells drilled to maintain those leases.”

“I don’t think the Bakken play will dry up, but it will definitely slow down.”

Lines Carson Welding and Maintenance has locations in Lampman, Halbrite, Carlyle, Alida, Estevan, Swift Current and Wainwright, plus field offices at EnCana’s Weyburn field, and with Apache Canada at Midale. ɸ Page B2

Ron Carson credits staff who have been with him, some for over three decades, for the growth of his company.

Photo by Brian Zinchuk

50th Estevan OTS curling bonspiel

By Brian Zinchuk Estevan – Estevan’s Oilfield Technical Society is planning a bonspiel to remember this year, and for good reason. It’s their 50th, after all.

The event will take place at the Estevan Curling

Club Mar. 26-29. There will be a banquet and dance at the Beefeater Plaza on the Friday.

The vent is known for its massive amount of door prizes. Recent years have also had an added bonus – with winning teams receiving an envelope

with some cash after each win.

Entry fees are $300 per rink, and that guarantees four events. Registration can be done online at the Estevan OTS website (estevanots.com). Registrations close Mar. 20.

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PIPELINE NEWS March 2009

Carson maintains roots in Lampman ɺ Page B1 There are several divisions, but the big ones are facility construction and general maintenance, and pipeline. They have the inhouse capacity to handle up to 24-inch pipelines, but more practically, they do a lot of two- to 16inch lines.

The facility work includes batteries, gas plant expansion, and CO2 work.

“We do a lot of CO2 facility construction in the Weyburn and Midale units.”

It’s not the first time the company has worked with CO2. Carson recalls they did a lot of experimental CO2 work for Shell. “We installed an experimental plant at Boundary Dam years ago, taking exhaust off the stack. That was a long time ago.”

“It finally got moth-

balled.”

A highly vertically-integrated company, there’s little Carson Welding and Maintence subs out. Other areas of work include pickers, piledriving, safety, hydrovac, roadbuilding and gravel hauling. “We have an environmental department that works on land reclamation,” he notes. A new Ironwolf mulcher was in the yard when Pipeline News visited.

Quality Quality control and safety is an absolute must,” he says. You have to be a leader in that, or soon get lost in it. ISN Networld – that’s a fulltime job. It’s just on and on. If you don’t deal with it, someone’s going to be knocking on your door and asking, ‘Why not?’”

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son says, but adds, “No, I haven’t welded in years.”

“When I started in ’74, I was in partnership with another guy in Estevan. We closed that down.

“We ran four trucks – two welding, two service – at that point in time, a total of about eight people.”

It’s been a steady growth rate since then for Carson. He’s based in Lampman, because that’s where he started.

“We didn’t expect to see the growth we saw. We started up where we live.

I lived in town at the time, and live in town now.”

“We have a family farm operation in town as well. One of my sons runs that.”

Another son works in the business, managing the safety and services division. A new shop for that division is under construction, across the highway from the head office.

“It’s been pretty consistent growth over the years, as well as doing some outlying areas expansion and acquisition.”

Over those years, a lot of people have been part of the company for the long haul. “We have quite a few staff over 30 years.

Over 20 [years], we have a lot.”

A new addition to the Carson Welding and Maintenance Áeet, is the Ironwolf mulcher. It joins a wide and varied Áeet that includes over 70 excavators and hundreds of pickups.

Twenty four people have been with the firm for over twenty years. Six have been there for over 30. “Those people are all key people,” he says” “It would never happen without the people we have.”

One more recent acquisitions was Elite Mechanical, in Lloydminster.

A substantially larger shop was completed for them last year. The grand opening was in November.

Another shop expansion took place at Halbrite over the winter, adding vehicle storage.

“We have people that come out of every

pickup truck.

The Lampman location is definitely the largest of the locations. “Lots of people live here, but the people that report here are from all over,” Carson says.

Oil show

The Saskatchewan Oil and Gas show is coming up this June 3 and 4 in Weyburn. Ron Carson of Carson Welding and Maintenance is the chair of the show.

“It’s going to be every bit as strong as two years ago,” he says. “If the current activity level had kept consistent, it would have been above average.”

However, he expects the show to be consistent with other years. The show is held every two years. “We’re pretty much sold out for display areas.

“We’re going to have a big show. It’s always been a huge success.”

More information can be found at www.oilshow.ca.

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small town in southeast Saskatchewan. Some in Regina work in Halbrite,” Carson says.

It’s hard to drive down a street in Estevan, residential or commercial, and not see a blue Carson

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PIPELINE NEWS March 2009

B3

Big Eagle withdraws from board

In mid-February, Eagle Drilling Rig No. 2 was busy punching a hole for Antler River Resources near Pierson, in the extreme southwest corner of Manitoba. At the time, four rigs of the company’s six were at work, with the sixth being a new addition to the à eet.

Photo by Brian Zinchuk

„ By Brian Zinchuk Carlyle – Derrick Big Eagle, the head of Eagle Drilling, has withdrawn from his appointment as a member of the Enterprise Saskatchewan Energy Sector Team, an advisory board for the revamped business and economic development ministry.

Big Eagle heads up Eagle Drilling Services of Carlyle. The company has just completed building its sixth rig, and had it in the yard when Pipeline News called.

Big Eagle told Pipeline News Feb. 12 he opted out of the board because he wanted to put 100 per cent of his energy into his drilling rig company. “I’ve got 150 people working for me,�

he said, noting he wants to keep food on their tables.

Big Eagle said, “We’ve got four working right now, which is better than most. It’s been a chore, don’t get me wrong.� “By the end of February, I’m hoping to have all six working,� he said.

Enterprise Saskatchewan has named Carolyn Preston, Ph. D, as Big Eagle’s replacement on the team. Preston is the executive director of the Petroleum Technical Research Centre at the University of Regina’s research park.

Joanne Johnson, director of public aairs for Enterprise Saskatchewan, explains the sector teams are still in their early stages of operation.

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Readying products for oil show in June „ By Brian Zinchuk Lampman – With the Saskatchewan Oil and Gas Show coming up in Weyburn this June, Acutec Systems Ltd. of Lampman is getting ready, working on new products to be released during the second quarter. “We’re oilďŹ eld instrumentation and tank gauging systems,â€? explains John Grimes, of Acutec.

Located on the Main Street of Lampman, Acutec works with a combination of wired and wireless telemetry, The product goes to the end user – oil and gas producers.

The company is also the local cell phone dealer. It’s advantages, because it ties into their communications and alarm systems.

Acutec has about 10-12 people at a given time, mostly ďŹ eld instrumentation techs working in southeast Saskatchewan and southwest Manitoba.

Why Lampman? “This is where we started, and it’s centrally located. It works for use. Most [of our] sta lives in and around Lampman.

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PIPELINE NEWS March 2009

Geosciences grow at U of S Saskatoon – In a department that has been growing over the years, the Geology Department of the University of Saskatchewan has been producing grads that have in large numbers been staying in Saskatchewan. But with uncertain times in the industry, their prospects may vary in the coming years, according to the head of the department, Professor Kevin Ansdell.

Geologists and geophysicists are more involved with the exploration and early phases of production, he explains. “Once a well is pumping, petroleum engineers keep it flowing. You could include chemical engineers to a certain extent.”

Over the last two years, 2007 and 2008, 61 per cent of those completing their undergraduate degrees at the U of S stayed in Saskatchewan, while 24 per cent went to Albert. The rest went to BC, Australia and Manitoba.

Six years ago, 51 per cent stayed in Saskatchewan, with 27 per cent going to Alberta.

“For the last two to three years, because the mineral industry has been really hot, a lot of our graduates are actually staying closer to home. They want to stay in Saskatchewan,” Ansdell explains. Many are quite happy to be based in Saskatoon, where there are a lot more jobs in the mineral side of the industry than petroleum.

“The training students get is appropriate to either.”

Up until about three years ago, 50 per cent have historically would always go

into petroleum. Over the last two to three years, the proportion going into petroleum has dropped, with 70 to 70 per cent now going into minerals.

Of the 2008 graduates, companies that scooped them up included PetroCanada, Talisman, Devon, and a number of smaller firms, including Aldon Oil of Weyburn.

“The ones that are doing petroleum are all in Calgary, other than the one in Weyburn.”

The department has had students working for wireline logging companies like Precision or Schlumberger.

One trend Ansdell has notes is, “The engineers quickly get up to speed on how these things work, but once the geologists learn how the equipment works, they do better in the company, because they know how to interpret the signal.”

“Having a geosciences background is pretty useful.” ɸ Page B5

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The big man in the U of S Geology Department, so to speak, department head Kevin Ansdell points out features on the geological map of North America.

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Photo by Brian Zinchuk

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Geoscience studies grow in popularity Éş Page B4 There are a total of 200 students in the program between years one and four, with the third year ďŹ eld school having 43 people recently. That’s the highest in 20 years, he notes.

Why? A starting wage in the $60,000 to $70,000 range doesn’t hurt, with low 60s being an average start. “I think that’s part of the attraction.�

With the downturn in the sector, Ansdell is not sure what the reaction will be. “Because this is so sudden, it will be interesting to see how the students react.

It doesn’t matter what you do, there may not be a job out there.�

But he adds. “The good ones are going to get a job in any case. There will be jobs for them. They may get one job oer, instead of waiting for your ďŹ fth [oer].

Students will have to be patient and send out a lot of resumes.�

He notes a lot of jobs in the ďŹ eld are not advertised.

Geologists, geophysicists and geological engineers fall under the same professional body in Saskatchewan – APEGS. That stands for the Association of Professional Engineers and Geoscientists of Saskatchewan. You can be a professional geoscientist or professional engineer within the body, Ansdell explains.

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B6

PIPELINE NEWS March 2009

Geology without a net:

By Brian Zinchuk Pierson, Man. – He’s kind of important, that well site geologist.

He’s the one saying where to drill, and where not to. He works with the directional driller on a constant basis, making sure the bit stays where it should in the formation, not poking out through the cap rock, or dipping below. Without him, well, it might not be much of a well at all, just a dry hole.

Wellsite consulting is something of a hushhush business. You’ll

hear the term ‘tight’ a lot, as in, this is a ‘tight hole.’

People in the field in general aren’t allowed to talk about where they’re at, both on the surface, or at depth, or precisely what they’re doing. One geologist told us, “No names, no locations.”

It’s a bit of a paradox, in a way, because you’d have to be blind to miss a drilling rig at work on the bald prairie.

A GPS, road sign or even an RM map can tell you where you are. A quick scan of well bulletins can give a good in-

dication of what they are looking for. Confidentiality on wells at places like the core repository only lasts a set length of time, then logs can be accessed. Yet still, a geologist with loose lips likely isn’t going to work long.

Antler River Resources of Melita, Man., allowed us to speak to the geologist working on a well they were drilling near Pierson, Man., in mid-February, giving Pipeline News board access. They’re a small privately held oil company that operates about 22

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wells in southwest Manitoba, and are actively drilling while others are not.

Pinnacle Well Site Consultants is the geology firm, and Pierre Rondeau is the day-shift geologist.

He’s something of a local, i.e. not from Calgary, having taken his baccalaureate degree at Brandon University. It’s a good school, he says, one that companies recruit from. He graduated three and a half years ago.

Like many other geologists Pipeline News spoke to, geology wasn’t Rondeau’s first choice.

It was physics. Geology turned out being his best class, however.

Upon graduation, he went straight into well site geology, working one year with a Calgary firm. “With that Calgary company, I was up in Fort Nelson for a while.

Never want to go back.”

Rondeau’s work now is primarily in southwest Manitoba and southeast Saskatchewan, as far west as Stoughton. Prior to becoming a geologist and unlike others in his field, he says, “I never worked rigs.”

A stereoscopic microscope is a useful tool for a well site geologist.

Photo by Brian Zinchuk

This well is a horizontal, like nearly every other well he has done.

In fact, he has only done one vertical well to date, perhaps a reflection on the trend towards horizontal wells. Rondeau doesn’t like the pace of work on a vertical, Rondeau.

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directional driller, Jarrett Ashworth of Millennium Directional Services, they try to “keep it in the good stuff.”

“You want to be closer to the top. All the oil is going to rise until something stops it. That’s what your cap rock does.”

In this case, Antler River says they are in the MC3 (Mission Canyon 3) formation, known in Saskatchewan as the Frobisher. Pipeline News arrived just as they are about to meet the intermediate casing point (ICP).

It’s the point in a horizontal well where you’ve curved from vertical to a horizontal position. ɸ Page B7

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the well site geologist ɺ Page B6 “Once we get there, they pull out, cement it, and we go in with smaller tools,” he says.

Tools To keep it in the “good stuff,” there are several tools a well site geologist uses. The most important to Rondeau is the gamma tool, attached not too far from the bit at the

end of the drill stem. “We run a gamma tool, using the readings off that we can see where the tops of the different zones are.”

The rate of penetration is another measurement used. Sometimes, when you penetrate the cap rock into the zone, the rate the drill bit is advancing through the rock can accelerate greatly.

Then there are the drill cutting samples, taken every five meters by a rig hand, who scoops up mud off the shaker.

The rig hand brings it to the geologist. He washes it with hot water and runs it through a very fine sieve, probably too fine to sift flour.

The cuttings are then put under a microscope,

Well site geologist Pierre Rondeau left, confers with directional driller Jarrett Ashworth of Millennium Directional Services.

Photo by Brian Zinchuk

then a fluoroscope.

The stereoscopic microscope allows a threedimensional view of the cuttings. The fluoroscope is a hood with a black light under it. Cuttings that have hydrocarbons will glow under this light.

With a tray of five samples, representing 25 m of drilling, we are able to see just a few glowing chips. Use of a solvent like lighter fluid or nail polish remover will enhance the visual effect. “We’re barely getting into the pay there,” he says.

“When I washed it, you could tell there was some kind of hydrocarbon in there. You could smell it. It’s definitely a good indicator. It’s a good sign if you can smell it.”

If they use distillate, a diesel-based mud, the fluoroscope is useless, however, as everything will have been stained by the diesel. In that case, cuttings are washed with soap and water.

The cuttings are put in vials and sent to Win-

nipeg. Samples are kept for the oil company, if they want them.

Of all the tools, Rondeau says the gamma is most important to him.

Once the rig reaches the ICP, the geologist gets a bit of a breather, usually a day and a half until the cementing is complete and the rig is ready to proceed.

Doing the horizontal section typically takes three to five days, Rondeau says, three days for 600 m, five for 1,200 to 1,300 m. It could take longer if you have to trip out and change the bit.

Slower than summer The geologists work in 12 hour shifts, with Adam Campbell as the night geologist on this site.

During the summer, the company had seven geologists and three rigs on the go. It meant only two weeks off every two months or so. It’s good because you’re working, but it sucks because all you’re doing is working,

he says. Your weekends are whatever days you get off between wells. It’s a lot easier for him, because he’s not married.

It’s slower now, but that’s alright, he says.

Rondeau thinks there should be more stress on well site work at university, noting he had just one lab on drill cuttings.

“I hated looking at drill cuttings. Now it’s all that I do.”

Well site geology should be an optional course, he says.

What does the 27-year-old want to do in the future?

“Retire by 35?” he laughs. “Maybe fish and golf?”

Last year, there wasn’t much time for golf. But in slower times, there’s another hazard for many geologists, and it’s not the rough or the water by the 8th hole. Many are self-employed, he notes, meaning there is no employment insurance safety net to catch you when things slow down.

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B8

PIPELINE NEWS March 2009

No more snaking through downtown Estevan Estevan – Driving a long, wide load like a drilling rig through Estevan can be a tedious affair. When you approach the downtown, you have to take a detour down a sidestreet, taking you two blocks off what would otherwise be a straight route through town. The detour was a result of the main drag being pounded out, according to civic officials.

Soon, those wide loads should be able to detour around most of the city.

As part of the federal stimulus plan, Estevan was singled out for a truck bypass, taking Highway 39, the main route from North Portal to Regina, around the north side of the city.

It will intersect Highway 39 at the Rafferty Dam turnoff to the east, and the Shand Power Station turnoff to the

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west. At the north side of the city, it will intersect Highway 47 half a mile north of the city.

The 2009 Federal budget documents note, “Funding for those projects will come from the Building Canada Fund. Projects cost-shared with provincial and territorial governments could include [the] Highway 39 truck bypass in Estevan, Saskatchewan.”

Souris-Moose Mountain MP Ed Komarnicki had worked on the file for several years.

The route will be planned with anticipation that it could eventually be twinned into a four-lane divided highway.

Sam’s Trucking of Estevan, a division of Carduff ’s Fast Trucking, spe-

cializes in rig moves. Their loads are big, to say the least, and the twisting and turning of transitting Estevan’s downtown can be a hassle.

“It can be very frustrating, because the other traffic is not aware of how difficult it is to stop and take tight corners,” says Daylene Yoner, safety coordinator with Sam’s.

“Most of the time, our trucks don’t go that way if they can avoid it.”

She welcomes a bypass, saying, “As far as we’re concerned, it’s a good thing.

The less we have to bring loads through the city, the better it is.”

Yoner points out, however, that their base is still within the city, and that they will still have to travel into the city to come back to the shop.

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B9

Will last year’s sell out be repeated?

The core repository in Regina will host one of the technical workshops (the core workshop) for the Williston Basin Petroleum Conference and Prospect Expo, April 26-28.

Photo by Brian Zinchuk

By Brian Zinchuk Regina - The 17th annual Williston Basin Petroleum Conference and Prospect Expo will be taking place in Regina April 26 to 28, at the Delta Regina.

The event is organized by Saskatchewan Energy and Resources, North Dakota Petroleum Council and North Dakota Department of Mineral Resources.

Each year it alternates between Regina and Minot.

It's a chance to learn the latest about what is happening in the Williston Basin oil patch. Oral presentations, poster displays and workshops will focus on practical applications of geoscience and engineering technology that help identify what works - and what doesn't work - in the search for new hydrocarbon accumulations and the development of known pools. The Bakken play will be highlighted in in the core workshop that will take place on April 26, before the main conference, and in the event’s technical sessions. The workshop will be limited to a hundred people, and will be held at the Subsurface Geological Laboratory.

Chris Gilboy, director of the Saskatchewan Subsurface Geological Laboratory in Regina, is one of the organizers. He explains, “Normally the first few presentations are updates by jurisdictions in which the Williston Basin lies –

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South Dakota, North Dakota, Montana, Manitoba and Saskatchewan.”

Another session looks at logistical challenges, such as pipeline capacities.

Other sessions will look at geological and/or engineering aspects of different reservoir units.

There is only one session happening at a time so participants do not have to choose between several concurrent presentations. It will be in the Casino Show Lounge which can accommodate an audience of up to about 500. Organizers are expecting between 600 and 1,200 participants, many of whom will be focusing on the trade show which features more than 55 displayers.

Conference attendance can vary widely. Two years ago, it numbered 441, but last year in Minot, the number was 1,370 and they were turning people away.

By mid- February, registrations were already nearing 400. Early registration is encouraged, but they will take walk-ins up until the 1,500 capacity is reached.

The conference is expected to be of interest to company officers, petroleum engineers and geoscientists, consultants, drillers, landsmen and others who work in the petroleum and related industries.

Total attendance will be limited to 1500 delegate and 82 commercial booths. More info can be found at www.wbpc.ca.

B10

PIPELINE NEWS March 2009

Alberta Clipper, with an occasional Alberta Clipper Rosetown – There’s snow, and then, there’s snow. Enough snow that you need four graders and three D8 dozers pushing it to keep a right of way cleared.

That’s the type of snow Robert B. Somerville/Techint, the joint venture contractors working on the western Saskatchewan portion of Enbridge’s Alberta Clipper project have had to contend with since they went back to work after Christmas. When Pipeline News visited the right-of-way on Jan. 29, Highways workers were trying to keep drifts on the highway, never mind a right-of-way.

“The wind never lets up in this province,” says Jack Cantwell of Somerville.

At that time, Cantwell was anticipating a completion on or about March 15. The current loop they are working on is 98.2 km. Come early June, they will be tackling the final 170 km leg, running from halfway between Rosetown and Outlook to Bethune. The summer loop will be based out of Moose Jaw, with a temporary office in Outlook.

While their yard is currently in Rosetown, most of the workers are not. With a crew peaking at about 525, there simply was not enough room in Rosetown to put them up – not even close, especially since the traditional pipeliner abode – a fifth wheel camper, doesn’t hold up too well to January temperatures.

ɸ Page B11

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B11

Dealing with the wind and snow ɺ Page B10 As a result, they have been bussing hands out of Saskatoon, running 26 buses each day. Since they can’t work in the dark, the darkness is utilized for travel time.

Still, the contractors have set up as much as they can in Rosetown, Cantwell says, doing a lot of purchasing in the community. “We probably have 30 accounts in town,” says Robin O’Connell, purchasing agent.

A hooded sweater is a necessity on the pipeline right of way in a Saskatchewan winter.

On big-inch pipeline projects, the ditch is engineered, meaning that is has to be continually measured to ensure the pipe will Àt in the ditch without causing undo stress on the pipe. The role of measuring ditch falls on the oiler, one of whom typically accompanies each excavator.

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B12

PIPELINE NEWS March 2009

Market challenges Husky Energy to cut operating costs Guest speaker Keith Richardson, Husky Energy senior production coordinator, talked about the challenges producing heavy oil.

Photo by Geoff Lee

Lloydminster – Cutting operating costs is top of mind for Husky Energy’s senior production coordinator Keith Richardson who won’t argue that market con-

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ditions, technical issues and the low price for oil are taking their toll.

“We are struggling – when you take full cycle costs into account which is our operating cost, our royalties and the cost of capital, it’s a very tough game at this price,” said Richardson.

“Heavy oil is less valuable than conventional oil and it requires upgrading to be marketable. We have to be able to operate and the cost of capital is crucial when you are getting $30 a barrel less for your product than someone who has conventional oil.

“We want to be very cognizant of our operating costs – that’s what we have the most control over. We are looking at our costs closely.”

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lying message Richardson conveyed to a sold out Petroleum Society luncheon held in Lloydminster at the Best Western Wayside Inn, Feb. 11.

His topic was “Challenges of Cold Heavy Oil Production in Western Canada” which in Husky’s case, pertains to costs, weather and reservoir concerns.

“The main challenge we have right now is the cost environment,” said Richardson who listed the main cost drivers in his area of production as hauling fluids, energy use in production and servicing (flushbys, service rigs, coiled tubing jobs).”

“With the reduced oil price, it’s very difficult to make money at this game at this point in time,” he said. “We are going back to all of our vendors and asking for better pricing on their products.

“Probably the most important thing is, we are ranking all of the projects that we are going to do.

We are taking a good hard look at the wells

that we service to make sure that when we do service them, the money is well spent and that we expect those wells to run longer next time.”

To cut energy costs, Richardson informed his audience, the challenge is to get wells off propane and on to fuel gas or casing gas early in the life of a well.

Richardson told the Pipeline News his presentation was designed to give the audience an idea of the challenges producing cold heavy production (CHOPS) compared to the rest of the world.

He describes Husky’s typical local reservoir as unique with high viscosity oil that and a high density of 10 to 12 degrees API compared with 40 API for conventional oil. Local heavy oil also has a low reservoir temperature of 25 Celsius and produces sand. Well depths range from 450 to 550 metres with reservoir thickness from 2 to 10m. ɸ Page B13

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B13

SOLUTIONS FOR BAKKEN WATER (FRACS AND PRODUCTION) Champion’s proven products work effectively with frac gel and are thermally stable up to 200 oC. Using a combination of products designed to prevent or reduce the presence of potential problems we have identified, our Estevan and Carlyle teams can help ensure your Bakken wells continue to produce for years to come.

WATER INCOMPATIBILITIES LEAD TO OILFIELD CHALLENGES Keith Richardson and Tariq Ahmed select a draw prize at the Petroleum Society lunch in Lloydminster Feb. 11.

Photo by Geoff Lee

Tough challenges ɺ Page B12 “The most unique characteristic is wormhole development,” said Richardson. “We actually produce our reservoir and sand produces worm holes that can extend over 800 m in our producing wells.”

Wormhole and other reservoir characteristics can lead to technical challenges and production disruptions due to water and gas influx, outof-zone water influx and in-fill drilling.

“We look to the service industry to help us out with the challenges we have,” commented Richardson following his presentation.

“We talked about our primary cementing, our shut off of water, and increasing the life of our downhole pumps. The service industry should be aware those are our major issues and how they can help us out.”

As a regional production coordinator, Richardson and the five production engineers that report to him are responsible for Husky’s optimization and servicing programs in the field.

“The function right now is to produce the oil by maximizing oil production at the lowest possible cost,” said Richardson. “That’s what we are focused on.”

Richardson also talked about challenges of seasonal weather on production and how Husky tries to work around the upcoming spring breakup.

“Over the past couple of years, we’ve become a little more proactive at what he can do,”

said Richardson. “Wells that are good producers, we want to keep them producing – but we have difficulty hauling – we can go in with vehicles that have really wide tires so you can reduce the load restrictions on the roads. If we have a good well, we might haul in a bunch of gravel to get us through that period.”

On a positive note, Richardson says the low price of oil hasn’t slowed Husky’s servicing program. “At this point, we are still maintaining our wells. We are trying to keep business as much as usual,” he said.

“For the first quarter, we have a fairly active drilling program and a fairly active optimization program. Once our first quarter is over we will be looking at how we plan to spend money over the rest of the year.”

In other news, Husky reported it continues

to test various enhanced recovery techniques in the Lloydminster area.

In August, 2008 the company began carbon dioxide injection at its second cold-solvent pilot project. This pilot is designed to test oil recovery and production rates using CO2 and propane.

Husky also noted in its fourth quarter statement that its drilling program and pipeline construction at Gull Lake are complete and facility construction was 60 per cent complete at the end of 2008. Start-up of the Gull Lake project is planned for the second quarter of 2009, subject to market conditions.

Richardson thinks commodity prices are near the bottom and expects demand will rise.

“Typically, demand goes up in the summer during the asphalt season,” he said. “I am hoping for a turnaround.”

Mixing incompatible waters for the frac process or tying into existing process facilities can lead to a variety of production problems. Not treating the water can potentially lead to scale, corrosion, and bacteria issues.

SCALE Introducing foreign water into the Bakken formation can lead to: s #ALCIUM 3ULFATE s #ALCIUM #ARBONATE s "ARIUM 3ULFATE s 3TRONTIUM 3ULFATE

These are actual scale samples taken from Bakken producing wells.

CORROSION The produced effluent is corrosive.

Corrosion monitoring validates that there is potential for: s 0REMATURE FAILURES ON PRODUCING WELLS s $IFlCULTY IN MAINTAINING SALES QUALITY OIL s 0OTENTIAL FOR INJECTION WELL RESTRICTIONS

BACTERIA Introducing foreign water into the Bakken formation can introduce new bacteria, potentially leading to: s !CID 0RODUCING "ACTERIA !0" s 3ULFATE 2EDUCING "ACTERIA 32" s Formation souring

Hei-Bro-Tech Petroleum Services A Division of 24-7 Enterprises Ltd.

• Fluid levels • Dynamometers • Pressure surveys (automated & manual) • Foam depressions • Equipment sales (new & used), rentals & repairs • Repairs done on all models including: Sonolog, Echometer, DX, etc.

• Major parts and supplies in stock at all times

Box 4, Midale, SK S0C 1S0 Phone: (306) 458-2367 or (306) 861-1001 Fax: (306) 458-2373

For more information please contact us: Champion Technologies Toll Free: 1-877-301-0285 or at (403) 234-7881 www.champ-tech.com 10 Lamoro Street, Estevan Office: 306-634-7627 Area Manager Kelly Orsted: 306-861-6045

B14

PIPELINE NEWS March 2009

Laid off oil worker bought himself a job – in the last bust cycle

Dennis Roth bought the WheatÀeld Inn after he was laid off in the last oil bust of the 90s. One of his jobs is to clear snow.

Photo by Geoff Lee

Kitscoty –The last time oil and gas bottomed out in the late 90s, Dennis Roth lost his management position at Barcomp Petroleum Ltd. in Lloydminster.

His answer to unemployment was to buy a job as the owner and operator of the Wheatfield Inn in Kitscoty, along with this wife Kathy.

The Inn has 12 rooms, a bar and a restaurant.

If you are in the mood for a homemade burger with fried mushrooms, bacon and melted cheese head to Roth’s inn on the main street and order a Wheaty

Sales & Service For:

burger while the going is good.

As the current recession threatens to grip the oil and gas sector, Roth is looking down the round to his next possible career.

“I have a gravel truck and a loader. I would like to get into landscaping for private customers eventually.

It’s been a hobby for the last few years,” said Roth who is 59.

For the time being, he is trying to determine if his low 30 per cent room occupancy since last November is due to cold weather or the cold reality of the economic times.

“This is the first ma-

jor downturn since I was laid off,” said Roth. “In the first five or six years, I hardly rented any rooms from November to April. The last few years it was busy yearround and now I am at 30 per cent.

“I had a terrible December and January. We have not had as many oilfield construction workers. I strongly suspect we will be quieter until the fall as far as oil and gas customers go.

“In the summer, we have been getting more tourists and during winter storms, we get travellers looking to take shelter.” ɸ Page B15

TOLL FREE 1-888-532-5526 Creelman, Sask.

Pumps, Meters, Valves, Controls, Switches Instrumentation Service

Combustion Service

PLC/RTU Programming

SCADA Services

Treater Parts

SBB PSV Service

Shop & Field Calibrations

Shop & Field Repairs

• Oilfield Graveling • All Types of Gravel Products • Sealed Trailers for Hauling Contaminated Waste • Payloaders • Excavator • Heavy Equipment Hauling • Car/Truck Wash

Enform COR Certified Locally Owned and Servicing Southeast Sask. Since 1967 64 Devonian Street E., Estevan

Phone: 306-634-5304 • Fax: 306-634-5887 TM

Larry Allan

Cell: (306) 421-9295 Shop: 433-2059; Fax: 433-2069

Estevan Sales & Service Facility Grand Opening - March 26, 2009 Visit us at #1-502 6th Street starting at 8 am ESP Test Facility On-Site Manufacturer of Electrical Submersible Pumping Systems (ESP), Horizontal Pumping Systems (HPS) and Variable Frequency Generators (VFG)

• Service Technician and Spool Truck available • For service call Chris at 306.461.6644 • For sales call Karry at 306.421.7435 • For all other inquiries call 306.634.6281

Advanced Thinking–Down to Earth Service

www.cai-esp.com

PIPELINE NEWS March 2009

B15

Finding new oppportunities ɺ Page B14 “Fortunately, we are not totally dependent on oil and gas. I can’t take anything away from farming and the support we enjoy from the community. Farmers are very loyal customers.

They like to support local business.”

Roth has lived in the Kitscoty area since 1981 when he co-owned Sona-Dyne Services in Lloydminster and he moved to Kitscoty in 1991 with his wife. He was bought out in 1993 and worked for himself on various oilfield jobs until 1995 when Barcomp Petroleum hired him on.

When he bought the Wheatfield Inn Roth knew exactly what he was getting.

He moonlighted as the inn’s maintenance man for a few years and knew the owners well. The inn was built in 1978.

“I lived here and I felt I could do a positive job in the community,” he said of his purchase decision. “I saw a good opportunity to grow it.

I enjoy it.

“You are always upgrading and it’s three times the hours of working in oil and gas, but it’s a lot easier.

“My room business is mostly from oil and gas customers, but I also cater to the needs of the local community. That’s where most of my business comes from.”

Wheatfield caters to many events at the new Kitscoty Community Hall and Roth is in the market for two more cooks so he can once again offer hot breakfast meals in addition to his lunch and dinner menus. He has 10 fulltime and 14 part-timers on the payroll.

“My biggest downfall is staffing,” he said.

“It’s hard to find people.”

Roth is a village councillor for the second time since taking over the inn. He says that helps to keep the business “visible in the community”. Roth is involved in organizing senior hockey in town

and played an active role on the executive of the local nine-hole golf course. As a business owner, he sponsors a variety of youth sports teams.

Roth says the recent increase in new homes built in Kitscoty bodes well for his business,

“

but for now he says, his rooms “take a beating when there’s a downturn. I’ve been through a few oil slumps starting with 1981 and 1986.

“Hopefully this recession won’t last forever. We are in an active community for oil and gas.”

I strongly suspect we will be quieter until the fall as far as oil and gas customers go - Dennis Roth

”

Dennis Roth is also a councillor for the Village of Kitscoty.

Photo by Geoff Lee

ESTEVAN PLASTIC PRODUCTS LTD. Your One Stop Shop For Fibreglass Tanks 500 Barrel 1 piece fibreglass Tank 15’ diameter x 16’ high

650 Barrel 1 piece fibreglass Tank 15’ diameter x 20’ high

780 Barrel 1 piece fibreglass Tank 15’ diameter x 25’ high

We manufacture these engineered Fibreglass Tanks

400 Barrel - 12’ diameter x 20’ high 500 Barrel - 12’ diameter x 25’ high Also Manufacturers of: • Fibreglass Belt Guards • Internal Fibreglass of Steel Tanks • Tank Skimmers • Insulated Wellhead Shelters

Toll Free: 1-888-638-6433 or 1-306-634-6400 Plant: 1-306-388-2344 Fax: 1-306-634-7828 email: eppl@sasktel.net

website: www.estevanplastics.com

B16

PIPELINE NEWS March 2009

Fragrance seller helps to freshen up the oil patch Kitscoty – Welcome to the fragrance zone in the middle of the often odorous oil patch. This scented oasis is the Candle Crazy Gift Shop in Kitscoty.

Christal Holland and her husband Vince opened it in 2007 as an afterthought when they became the Canadian distributors of U.S. based, Salt City Candle Company.

Vince gave up his oil trucking job to handle the packaging and shipping of Salt City warehouse orders. Christal is director of operations for Canada.

The retail store and the warehouse are attached.

National Salt City sales come from Internet orders and home parties under the guidance of home party manager Jackie Orbeck. The gift shop, meanwhile, is winning over new customers by word of mouth.

“We have only had positive feedback,” said Christal. “Most of our customers make an effort to come here and see what is new. I would say 90 per cent of our retail customers live outside the town.

Most come from Lloydminster.

“A lot of people thought we were crazy starting a

business in a small place like Kitscoty. We had low expectations for the retail store and now we have four employees to run the store. We should have made the store twice as large.

“We have been growing steadily since we started. From September to December of 2008, we doubled our sales.”

The day Pipeline News paid a visit, there was a steady stream or customers, some whom arrived in oil company vehicles on their lunch hour.

“It’s great to see a man’s truck with a Salt City air freshener,” said Holland. “The store really caters to women, but we have a lot of men who buy for themselves.” ɸ Page B17 Angela O’Hare displays some of the costume jewellery available from the Crazy Candle Gift Shop.

Photo by Geoff Lee

Let Us Create Your Dream Home We Build Custom Homes Using Your Plans!

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Now booking for 2009

• OilÀeld • Environmental • Water & Sewer • Basements • Demolition • Lowbed Trucking

1-888-458-2270 458-2270 www.lynco.ca

P.O. Box 240 Midale, SK S0C

• Sand & Gravel • Rock & Topsoil • Excavators • Backhoes • Dozers • End Dumps

Insulated Concrete Forming Sales & Installation

Phone 748-5560 Fax 556-2220 86, Cromer, Fax MB R0M 0J0 PhoneBox 204-748-5560 204-556-2220 Box 86, Cromer, MB R0M 0J0

PIPELINE NEWS March 2009

B17

Look familiar?

Grimes Sales & Service of Lampman is one of the leading pumpjack suppliers in Southeast Saskatchewan, with their characteristic orange and black units prevalent on numerous new wells.

AFFORDABLE HOUSING is AVAILABLE MANUFACTURED HOMES

Christal Holland and Jackie Orbeck shovel snow from the front of the Candle Crazy gift Shop.

Canadian made SRI Homes with quality, style AND 10 year warranty! Both 16’ and 20’ wide models to choose from - create your own design or purchase units in stock.

Lots available in Weyburn and area.

Sweet smells ɺ Page B16 Some of the sweetest smelling dog houses and oil trucks on the road can trace their fruit, floral or spice fragrance to Salt City candle products purchased at the shop.

“We also have a lot of oil and gas companies that order products for gifts,” said Holland.

“Candles are a nice alternative and Salt City has the most intense fragrance candles on the market.”

According to their web site, Salt City Candle uses a unique triple blend of highly refined paraffin and soy waxes that surpass the burning and fragrance performance of other brands.

The fragrance line includes jarred candles, aromatherapy, fragrance diffusers, melter tiles, towers, aerosols and car fresheners.

Gifts aimed at women range from handbags, and stationery and Spanx under garments to jewellery, home decor, health and body products and Salt City fragrances.

“I’ve had some women tell me their husbands burn the candles in their doghouses,” said Holland.

“We wouldn’t be as successful without the oil and gas sector. The oil economy has an impact on our sales.”

Despite the recession, Holland says candles are

an affordable luxury.

“Candles have always been popular but now they are a better quality.

There are so many products now that you don’t have to light a candle to get scents.”

The Hollands moved to the area from Calgary 10 years ago for Vince’s oil patch job. Christal began to sell Salt City goods from her home a few years ago with instant success.

“I sold products out of my home and I got to know the American owner who asked if I wanted to distribute products for all of Canada,” she said.

“It’s kind of taken on a life of its own.”

Lots now available in Estevan and area!

WE PROUDLY SERVICE WHAT WE SELL!!

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Call Dick Michel today to set up an appointment 1-877-842-3288 921 Government Rd. S., Weyburn, SK.

1-877-842-3288.... CHECK US OUT ONLINE AT.... www.minardsleisureworld.com

B18

PIPELINE NEWS March 2009

Oilpatch careers website launched

Class Pays USED TRUCKS SN 877185

SN 891357

2006 PETERBILT MODEL 379 814,032 km, C15 (475 HP), 18 spd, 48 U Bunk, 12,000 lb Front Axle, Super 40’s, 3.91 Ratio, 244 WB

2005 PETERBILT MODEL 379

The JuneWarren-Nickle's Energy Group announced in mid-February the first job board of its kind devoted exclusively to Canada's oil and gas industry.

OilpatchCareers.com is a strategic partnership between JuneWarrenNickle's Energy Group and the Workopolis NicheNetwork who together offer a unique staffing solution for Canada's oilpatch.

OilpatchCareers.com is an invaluable resource for job seekers who are specifically targeting employment in the oil and gas industry and employers who are looking for high quality talent with experience in the oil and gas sector, Nickels said in a release.

In a special launch promotion, employers are invited to post jobs for free for two months. Post as many jobs on OilpatchCareers.com as you like until March 31st, 2009 and enjoy numerous benefits: get access to a targeted candidate pool with a better chance of reaching specialized candidates, post jobs easily and quickly, and access career-building resources as well as employment news.

The website includes career resources, like resume writing, how to network, and how to achieve interview success.

OilpatchCareers.com is also advertised across the entire JuneWarrenNickle's Network, which enjoys 500,000 page views and reaches 30,000 unique visitors each month.

JuneWarren-Nickle’s Energy Group and Pipeline News are both owned by Glacier Media Inc., of Vancouver.

314,184 km, C15 (475 HP), 18 spd, 48 U Bunk, 12,000 lb Front Axle, Super 40’s 3.73 Ratio, 235 WB, Reconditioned TNE Pump, Ready to haul SN 891223

SN 735918

Girard Bulk Service Ltd. * Bulk Petroleum & Propane * Cardlock * Propane Accessories * Lubricants

2007 PETERBILT MODEL 379 LEGACY 866,389 km, ISX (530 HP), 18 spd, 12,000 lb Front Axle, Super 40’s, 4.10 Ratio, 225 WB, Very Clean Unit

2006 PETERBILT MODEL 379 836,273 km, C15 (475 HP), 18 spd, 12,000 lb Front Axle, 46,000 Rear Axle, 4.10 Ratio, 220 WB

PROPANE

NEW TRUCKS SN 780442

SN 780966

ESTEVAN OXBOW ALIDA CARLYLE REDVERS 134 4th Street 637-4370 483-2826 443-2466 453-2262 452-3216

2009 PETERBILT MODEL 325

2009 PETERBILT 340

Paccar Engine PX6 (300 HP), Allison Automatic Transmission, 8,000 lb Front Axle, 14,000 lb Rear Axle, Hydraulic Brakes, 4.56 Ratio, complete with Dominator Service Body, 5000 lb Crane

Paccar PX8 (330 HP), Allison 3000 RDS-P Transmission, 14,600 lb Front Axle, 40,000 lb Rear Axle, 6.17 Ratio, complete with 16 foot Gravel Box (new), 3 to choose from

The place to go to buy or sell a business.

Karl Haselhan

Truck Sales Representative Call: 306-421-2918

Frontier Peterbilt Sales Ltd. #1 Frontier Street, Highway 39 East, at the Shand Road, Estevan, SK Phone: (306) 636-6320 • Fax: (306) 636-6321 Open Monday to Friday 7:30 am - 8:00 pm Saturday 7:30 a.m. to 6:00 p.m.

Darryl Fox, B.Admin.,CMA Sales Consultant

201-2750 Faithfull Ave. Saskatoon Sk. S7K 6M6 Tel: 306-382-5075 Fax: 306-382-5073 Cell: 306-292-9388 d.fox@sunbeltnetwork.com

www.sunbeltnetwork.com

PIPELINE NEWS March 2009

B19

Reef plans to merge with Woodthorpe Last month, Pipeline News reported that Reef Resources was seeking out a merger partner. On Jan. 30, they announced they found one.

Reef Resources Ltd. signed an agreement in principle to merge with Calgarybased private oil and gas company Woodthorpe Petroleum Ltd. Under the terms of the agreement Woodthorpe W and Reef agree to negotiate, on an exclusive basis, a common share exchange structure based on a mutually acceptable valuation formula. The merger w would be subject to further due diligence, Woodthorpe W and Reef Resources shareholder approval and meeting all applica-

ble regulatory and procedural guidelines.

Woodthorpe is a private oil and gas producer currently producing 45 bbls of oil equivalent per day from a high working interest property in the Chinchaga area of northwest Alberta. The company holds 3,960 contiguous areas with considerable upside through optimization and step out drilling locations. The company also owns 100% of its gathering systems, compression facilities, water injection system and disposal well and facility-battery capacity up to 550 BOE a day to support additional production from future development and exploration drilling.

Acquire, Exploit & Explore A Proud Producer in Southeast Saskatchewan

Reef Resources put out an ad in January seeking a merger partner, not too different from those who seek mail-order brides. By Jan. 30, an engagement was announced, with Woodthorpe Petroleum Ltd. Photo by Brian Zinchuk

17th Williston Basin Petroleum Conference & Prospect Expo

April 26 - 28, 2009

Delta Regina and Casino Regina Show Lounge, Regina, SK Canada

For Expo booths, call (306) 787-2577 For Sponsorships, call (306) 787-9104 All other information, call (306) 787-0169 or Email: info@wbpc.ca

Saskatchewan OfÀce: #6, 461 King Street Estevan, Saskatchewan S4A 1K6 (306) 637-3462 www.tristaroilandgas.com

Register Online at www.wbpc.ca Technical Talks Activity Updates “Hot Plays” Workshops Prospect Expo

B20

PIPELINE NEWS March 2009

New building rises for Winacott

Hey Girls!

Just wanna have fun?

Join the Oil Wives Club of Estevan, a social club for women whose significant others work in the oil patch.

We understand relocation and how hard it may be to meet people in a new town.

With our long established “Links of Friendship” via over 29 clubs in B.C., Alberta and Saskatchewan, you will always have a group of friends wherever the patch may take you and your family.

Our motto is “Fostering Friendship” and we meet every third Thursday of the month... just to have fun and a meal.

Come out and meet with women who share similar interests and take the opportunity to make life-long friendships.

Our next meeting will be held March 19, 2009.

For more information call Cindy Beaulieu at 634-4970 or Connie Spencer at 634-1012 Check out our website at: www.oilwives.com

CUSTOM BUILT WELLSITE ACCOMMODATIONS Wheeled Units Skid Units Service Rig Doghouses

(306) 861-5655 www.dembytrailer.com

Daylighting, Oilfield Hauling, Steaming & Mobile Pressure Washing, Winch, Pressure, Water & Vacuum Truck Services

Winacott Western Star & Sterling Trucks in Regina is putting up a new facility on Ross Avenue East. Currently they are located on Regina’s 6th Avenue East.

Photo by Brian Zinchuk

By Brian Zinchuk Regina – Winacott Western Star & Sterling Trucks is putting up a new building in the northeast corner of Regina, not far from the Ring Road on Ross Avenue.

The building will be 24,600 square feet, about a quarter larger than their existing facility on 6th Avenue East, according to Trevor

Winacott, dealer principal.

“More efficient and new,” he says of the new building that was still in the structural steel stages when Pipeline News saw it in early February.

“We’re hoping the end of June, but we’re kicked back a few weeks,” he says, due to weather. “More like July-ish, if not August.

“We’re a heavy duty truck/trailer dealership, around since ’74,” he says. The company is active in the oilpatch, according to Winacott, with sales including a heavy-duty oilpatch line of Doepker trailers.

Office - Kola, MB. 204-556-2464 Dan O’Connor Operations Manager 204-748-5088

(780) 875-0203 LloydMall Hwy 16, Lloydminster

PIPELINE NEWS March 2009

B21

Wasn’t his cup of tea „ By Brian Zinchuk Lampman - It’s lunchtime at the Harvest Cafe, on the Main Street of Lampman. The lunch crowd shues in, many in Nomex, with high visibility striping. Make sure you get there early, we’re told.

The place is busy, but not full on this early February day. The smorg is Ukrainian fare, and ďŹ lling.

Jared Ottenbreit and his compatriot are kind enough to allow this reporter to sit with them.

Ottenbreit could be seen before lunch, trenching a ditch along the north side of a new shop for Carson Welding and Maintenance, for whom he works.

The chain ditcher wouldn’t cut it, so it was time to bring in an excavator; one of over 70 Carsons has in its eet.

Ottenbreit works mainly in the pipeline area with the company. He moved to Lampman in the fall of 2008, a task that was not easy to accomplish. “It took almost a year to ďŹ nd a place to live,â€? the 27-year-old says.

Ottenbreit comes from Broadview,

and has worked with Carsons for a year and a half. Prior to that, he had been doing zero-disturbance lease building,� mostly with a rubber-tire hoe,� he says.

He runs dozer, grader, skid steer loader, and excavator. And perhaps, he ďŹ nally got tired of running in Alberta. “I was in Alberta for ďŹ ve years,â€? he says. “I went there right out of high school on drilling rigs, then did odd jobs before the zero disturbance.â€?

The work was in coal bed methane. “They’d rig up in about an hour, and drill in about and hour and a half. They were fast.�

So why come back? “It’s my province, my home. [I] came back to the best province,â€? Ottenbreit says, adding his friends and family were here. “I hated Alberta. It just wasn’t my cup of tea out there. I wanted to be back where I knew stu.â€?

What stu? “I’m a big hunting, ďŹ shing, outdoorsy guy,â€? he responds, noting he knows the lay of the land here.

:54? 85(/:'/22+ ,/+2* 9;6+8/4:+4*+4:

In the cab of this hoe, Jared Ottenbreit ditches in utilities for a new shop a the Carson Welding and Maintenance headquarters in Lampman.

Photo by Brian Zinchuk

(U^ )GXR_RK 9GYQGZINK]GT ]]] YG\GTTGKTKXM_ IUS

Ltd.

DRILLING • COMPLETIONS • PRODUCTIONS • Lab facility • Fresh water available • Industrial Cleaning Products Blaine Fallis

Dean Carriere

General Manager 306-421-2623

Technical Service Rep. 306-421-1238

Steve McLellan

Rick Breisnes

Chemist

421-5502

SWIFT CURRENT Kevin Burton - Technical Service Rep • 421-3473

92 Hwy. 39 E, Estevan • www.cbsterling.com

306.634.6549

5LLOIK )KRR ,G^ ZXUHOZGORRK&YG\GTTGKTKXM_ IUS

Member of CAODC, locally owned with four free standing double rigs and two free standing single rigs

Ron Newett - 861-1062 • Al Vilcu - 861-5253 Field Supervisor - Darren Wanner • 861-9990

Southern Range Well Servicing Ltd.

Box 895, Weyburn, SK, S4H 2L1 southernrange@sasktel.net Bus: (306) 842-3401 Fax: (306) 842-3402

JOHNSTONE TANK TRUCKING Ltd. Estevan Location - Phone: 634-8545 Frobisher Location - Phone: 486-2044

- Tank Trucks - Acid Trucks - Pressure Trucks - Vacuum Trucks -

B22

PIPELINE NEWS March 2009

More storage Carson Welding and Maintenance expanded its shop at Halbrite over the winter, providing more indoor storage.

Photo by Brian Zinchuk

GEE BEE CONSTRUCTION KIPLING SASK

Alan Batters 736-2332 (Office) 736-7855 (Cell) 736-2334 (Fax) geebee@sasktel.net

TRENCHING EXCAVATING GRAVEL TRUCKING WATER&SEWER DEMOLITION PIPELINE&OILFIELD CONSTRUCTION PICKER TRUCKS

! >5G "

(780) 875-0203 LloydMall Hwy 16, Lloydminster

H>D B0E4 186

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PIPELINE NEWS March 2009

B23

Breaker raises debt Âżnances and capital funds through share sale Calgary â&#x20AC;&#x201C;Breaker Energy Ltd. has raised just over $16.1 million through the sale of approximately ďŹ ve million of its Class A shares at $3.22 each.

The revenue from the sale announced in February will be applied to reduce debts and to fund

Breakerâ&#x20AC;&#x2122;s 2009 capital expenditure program, including ongoing horizontal multi-frac drilling at Fireweed, Provost and Irricana.

Breaker Energy Ltd. is a junior oil and gas company focused on creating shareholder value by growing per-share production and reserves through

acquisitions and a focused exploration, development and exploitation plan.

Breaker has more than 375 net locations and access to approximately 225,000 net acres of undeveloped land in Alberta, Saskatchewan and British Columbia.

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B24

PIPELINE NEWS March 2009

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PIPELINE NEWS Saskatchewan’s Petroleum Monthly

C-Section March 2009

Obama and Harper hail Weyburn CO2 project American President Barak Obama emphasized the Canada - U.S. relationship in their historic meeting in mid-February. Highlighting energy was one topic of common interest, speciÀcally citing a Saskatchewan project as a milestone.

David Boily/afp/Getty Images

Ottawa - It’s not often you get the President of the United States and the Prime Minister of Canada pointing to a project, saying this is what we should do, but that was the level of accolades the carbon capture project at Weyburn and Midale received during the presidential visit to Ottawa Feb. 19.

In the communiqué

following the presidential visit, the U.S.- Canada clean energy dialogue is laid out. In it was the statement on carbon capture and sequestration: “To spur rapid progress in this critical technology, the two nations will coordinate research and demonstrations of carbon capture and sequestration technology at coal-fired plants. This will build on

our experience with the North Dakota-Weyburn project.”

The communiqué goes on to say, “The United States will draw from the $3.4 billion for carbon capture and sequestration demonstrations in the American Recovery and Reinvestment Act. Canada’s Economic Action Plan establishes a $1 billion Clean Energy

Fund which builds on Canada’s previous investments in carbon capture and sequestration.

“A strengthened U.S.-Canada partnership on carbon sequestration will help accelerate private sector investment in commercial scale, nearzero-carbon coal facilities to promote climate and energy security.”

"This is a fantastic

day for Saskatchewan," said Minister of Crown Corporations Ken Cheveldayoff. "The impact is huge. It shows that at the very highest level these two world leaders are talking about the technology that is being developed here . . . it's very exciting. Saskatchewan will play a leadership role."

SaskPower is moving

forward with its clean coal test project at the Boundary Dam Power Station, with the Feb. 13 announcement of a short list of companies following a request for proposals. The project appears to be directly related to the references made by the president and prime minsister.

See related story on Page C7.

C2

PIPELINE NEWS March 2009

Computing horsepower improves seismic surveys: prof Saskatoon – He’s been peering into the ground for decades, having retired in 2003. Yet Zoltan “Zoli” Hajnal is still active in the University of Saskatchewan Geosciences Department, where he has four graduate students and a seismic lab.

He holds a professor emeritus position.

His ground level office in geology building, just down the hall from the triceratops and tyrannosaurus rex, is crammed. He peers over a mammoth desk that literally has a foot of books and maps covering it. You get there by navigating a narrow channel of still more maps and sundry other academic material. It’s the accumulation of having taught seismology for 36 years.

On one wall is a map of project one might think was science fiction. They took seismic surveys of the earth’s crusts up to 60-70 km deep. The national program was called the Litho Probe, looking at the earth’s lithosphere from coast to coast. One of the major portions was in Saskatchewan and Manitoba, a project Hajnal worked on.

From behind his mountain of papers, the topmost of which is a ‘poor man’s 3-D’ seismic survey, Hajnal gladly answers our questions.

What is the difference between geology and geophysics? “Fundamentally, the difference is you are using physical measurements to differentiate between differ-

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Professor emeritus Zoltan “Zoli” Hajnal of the University of Saskatchewan’s Geosciences Department explains how seismic surveys have improved over the years, but seismic has no direct relationship to how much oil a petroleum engineer can get out of a reservoir.

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ent rock types in the sub-surface.

“You can look below the surface. Geology looks at rocks on the surface,” he explains.

That can involved using probes in bore holes that measure gamma, density, resistivity, induction, and sonic.

“There are now a great variety of probes used to differentiate between the physical properties of rocks,” he says.

Hajnal talks of a harmony of earth sciences, using geology, geophysics, geochemistry, and geochronology to establish environments below the surface.

“Over 90 per cent of our graduates end up working in industry, a great majority in the oilpatch,” he says. During his active teaching years, they graduated 250 geophysics students, over 90 per cent of which ended up in the oil business.

“Their main goal is to locate petroleum reservoirs.”

The primary tool in that quest is the seismic survey, a technique where you create acoustic vibrations and send them into the sub-surface. Part of the vibrations echo back from the surface, and are detected using devices called geophones, a form of microphone. Hydrophones are used on open water, but with a certain diminishment of resolution.

The vibrations are set off by either explosives, or vibrators, large trucks that lower a belly plate to the ground and shake. Hajnal refers to them as “the dancing elephant.” Four of the largest of these machines, operating in synchronized mode, were used during the Litho Probe. ɸ Page C3

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C3

New tech. leads to more detailed surveying ɺ Page C2 The advances in computing technology have made great strides in the fidelity of such surveys, providing much higher detail than you could get 20 years ago, he says.

Additionally, better image display capabilities from much better graphics systems allow one to look at much bigger areas.

Similar to a digital camera, if you want sharp, detailed picture, you need to increase the number of pixels. Seismic does the same thing, he says. Geophones/ seismometers can provide visuals as big as a football at depths of 1000 m.

The first seismic system used in the search for hydrocarbons was a truck in the 1920s, equipped with four or five detectors. Current systems are capable of putting out 50,000 channels. The resolution underground is a function of spacing.

If you place the geophones half a meter apart, you will have higher fidelity then you would if you space them a kilometre apart.

It’s not always possible to place geophones where you would like. Hajnal talks of a recent seismic survey under Paris where they were looking under the Champs Elysees. In that case, it’s more of a scramble. But in Saskatchewan, where you still have lots of open ground, you can do virtually whatever you want, depending on the agreement with the landowner.

“In Saskatchewan, what we can achieve depends on the customer,” he explains. Optimal resolution is five to ten metres delineating properties of the rock.

“In Saskatchewan, you can easily go two-plus kilometres.”

It’s possible to go a lot deeper, if needed, like up to 10 km deep in the Gulf of Mexico. For very expensive wells, you want to be sure where you are drilling.

“That’s why this game of seismic became a big issue. You do everything possible before you drill a hole.”

“When dealing with a complex medium, you want to provide more and more detail. It’s like you want to describe a piece of cloth. It’s mainly blue. Okay, but it has white stripes. You need the dimensions of how far apart they are.”

Is there a difference between looking for light oil or heavy oil?

“No difference,” he says. Seismic does not detect hydrocarbons, but rather rock types and structures. Reservoirs are associated with anomalous structures at depth.

“Yes, having more sophisticated seismic, you can detect smaller reservoirs, but seismic has no direct relationship to how much oil a petroleum engineer can get out of a reservoir.”

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C4

PIPELINE NEWS March 2009

Lloydminster leads province

By Geoff Lee

Regina – What a difference a year makes when it comes to the sale of Crown petroleum and natural gas rights.

The Feb. 9, 2009 sale of Crown petroleum and natural gas rights generated just $6.3 million at an average price of $189/ha compared to a whopping $197 million tallied in the February, 2008 sale.

Of the total $6.3 million for this year’s sale, $339,000 was generated from the sale of two licences and 144 leases totally approximately $5.9 million.

The top land purchaser in the province was Scott Land & Lease Ltd. that spent $1,603,719 to acquire 31 lease parcels.

The top price paid for a single lease was $411,000 paid by Sandstone Land & Mineral Company Ltd. for a 65-ha parcel situated within the Tangleflags East McLaren Sand Oil Pool, 35 km northeast of Lloydminster.

The top price paid for a single licence was $288,861 paid by Western Land Services Co. Ltd. for a 9,321-ha block located situated 10 km south of the Minton Winnipegosis Oil Pool, 12 km southeast of Coronach.

The highest dollar per hectare was received from Prairie Land & Investment Services Ltd. that paid $6,889/ha for a 16-ha parcel located six km south of the Frys East Tilston Beds Oil Pool, 16 km east of Redvers.

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Gas prone areas of the province generated $704,631 in sales revenue for 6,022 ha, an average of$117/ha.

Parcels offering deeper rights only brought in $846,291 (13.53 per cent of the sale) for an average price of $202 /ha.

Lloydminster The total bonus for 52 leases received in the area was $3,059,607, an average of $380 /ha.

This compares to $2,384,851, an average of $332. /ha at the last sale in December, 2008.

The top purchaser of acreage in this area was Scott Land & Lease Ltd. that paid $761,472 to acquire 10 lease parcels.

The top price paid for a single lease in this area was $411,000 by Sandstone Land & Mineral Company Ltd. for a 65-ha parcel situated within the Tangleflags East McLaren Sand Pool, 35 km northeast of Lloydminster. This is the highest dollar per ha in this area at $6,309 /ha.

Kindersley-Kerrobert The total bonus for 22 leases received in the area was $520,521, an average of $106/ha This compares to $2,136,544, an average of $122 /ha at the previous sale in December.

The top purchaser of acreage in this area was McCrank Stewart Johnson that spent $119,312 to acquire two lease parcels.

The top price paid for a single lease in this area

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was $103,969 paid by Canadian Coastal Resources Ltd. for a 257-ha parcel situated adjacent to the Druid Mannville Sands (Oil) Pool, 20 km southeast of Kerrobert.

The highest dollar per hectare in this area was received from Prairie Land & Investment Services Ltd. who paid $441/ha for a 65-ha parcel located within the Dodsland Viking Sand (Oil) Pool, 41 km northwest of Rosetown.

Swift Current The total revenue for 25 leases received in the area was $503,974, an average of $93/ha. This compares to $2,839,534, an average of $143/ha at the December sale.

The top purchaser of acreage in this area was Scott Land & Lease Ltd. that spent $147,474 to acquire eight lease parcels.

The top price paid for a single lease in this area was $88,977 paid by Standard Land Company Inc. for a 32-ha parcel situated within the Whitemud Shaunavon Oil Pool, 16 km southeast of Eastend.

This is the highest dollar per hectare in this area at $2,748/ha.

Weyburn-Estevan The total bonus received in the area was $2,170,929, an average of $149/ha.

This compares to $40,163,783 an average of $759/ha at the last sale. The total sale amount includes two leases totally $339,000 and 45 lease totaling $1.8 million.

The top purchaser of acreage in this area was Scott Land & Lease Ltd. who spent $638,391to acquire nine lease parcels.

The top price paid for a single lease in this area was $171,955 paid by Scott Land & Lease Ltd. for a 65-ha parcel situated one km southeast of the Flinton Tilston Beds Pool, 25 km northeast of Stoughton. ɸ Page C5

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PIPELINE NEWS March 2009

Provincial Feb. 9 Land Sale

Licences Lease

Posted Parcels 6 199

Hectares 26,663.52 30,198.31

Parcels 2 144

Hectares 10,292.37 22,656.11

Sold Bonus 339,000.51 5,916,030.68

$/Hectares 32.94 261.12

Total

205

56,861.83

146

32,948.48

6,255,031.19

189.84

Weyburn-Estevan Posted

Sold

Licences Lease

Parcels 6 68

Hectares 26,663.52 5,573.58

Parcels 2 45

Hectares 10,292.37 4,314.17

Bonus 339,000.51 1,831,928.60

$/Hectares 32.94 424.63

Total

74

32,237.10

47

14,606.54

2,170,929.11

148.63

Licences Lease

Posted Parcels 0 45

Total

45

February 2009 land sales

ɺ Page C4 The top price paid for a single licence in this area was $288,862 paid by Western Land Services Co. Ltd. for a 9,321 ha block situated 10 km south of the Minton Winnipegosis Pool, 12 km southeast of Coronach.

Parcels 0 25

Hectares 0.00 5,401.56

Sold Bonus 0.00 503,973.53

$/Hectares 0.00 93.30

25

5,401.56

503,973.53

93.30

The highest dollar per hectare in this area was received from Prairie Land & Investment Services Ltd. who paid $6,889/ha for a 16.19 ha parcel located six km south of the Frys East Tilston Beds Pool, 16 km east of Redvers.

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C5

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Sold

Licences Lease

Parcels 0 29

Hectares 0.00 5,737.60

Parcels 0 22

Hectares 0.00 4,895.13

Bonus 0.00 520,521.51

$/Hectares 0.00 106.33

Total

29

5,737.60

22

4,895.13

520,521.51

106.33

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Posted Parcels 0 57

Hectares 0.00 8,272.28

Parcels 0 52

Hectares 0.00 8,045.25

Sold Bonus 0.00 3,059,607.04

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52

8,045.25

3,059,607.04

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PIPELINE NEWS March 2009

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RM of Browning working with industry Lampman â&#x20AC;&#x201C; The RM of Browning No. 34, is a mix of old oil, and new. One of Saskatchewanâ&#x20AC;&#x2122;s first fields, the Steelman, is along its southern side. The north side of the RM is part of the Bakken play.

The Rural Municipality of Browning has Lampman as its seat, on the western side of the R.M. Itâ&#x20AC;&#x2122;s the largest community in the R.M. The RM and town have been working on a cooperative industrial park, with approximately 60 acres being surveyed for commercial usage. Some lots have already been sold.

Lampman has also bought land for residential development, with a private developer.

Thereâ&#x20AC;&#x2122;s been wells there for years and years, says Reeve Randy Fleck of the Steelman field. Old fields like the Midale and Weyburn fields have seen new life infused in them, with the injection of carbon dioxide. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve

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heard somebodyâ&#x20AC;&#x2122;s looking into that. It is an old field, and I would think it makes sense to do it.â&#x20AC;?

Highway 361 divides to the RM into northern and southern halves. North of 361 is the majority of the Bakken wells. â&#x20AC;&#x153;In our RM, weâ&#x20AC;&#x2122;re seeing most of the drilling in the north half.

Mostly Bakken, some Frobisher and Midale zone.â&#x20AC;?

In 2008, there were 75 new drilling licenses. â&#x20AC;&#x153;We have approximately 1,400 wells in our RM.â&#x20AC;?

Most new wells are horizontal, with multistage fraccing. â&#x20AC;&#x153;We hardly ever see a vertical well anymore.â&#x20AC;? â&#x20AC;&#x153;The biggest increases weâ&#x20AC;&#x2122;ve seen is in truck numbers on our wells,â&#x20AC;? Fleck says.

It means more gravel, more grading, trying to maintain the infrastructure.

The new assessment will bring in more commercial and agricultural value. Thereâ&#x20AC;&#x2122;s no plan to decrease the mill rate, though, as the additional funds will be gobbled up by road maintenance.

Commercial assess-

ment makes up about 80 per cent of the tax base. â&#x20AC;&#x153;They realize they have got to get the oil hauled, and they need decent roads to drive on,â&#x20AC;? Fleck says.

The farmers are happy to see oil in the area, he notes.

As for jobs, he notes itâ&#x20AC;&#x2122;s never really been a problem to find a job in Browning.

Indeed, the RM has had a hard time finding employees for its operations. They lost two over the summer. â&#x20AC;&#x153;We hired a guy from Ontario. We are presently looking for two full time,â&#x20AC;? he said in early February. â&#x20AC;&#x153;With the slowdown, this may help us. Weâ&#x20AC;&#x2122;ve had to increase our wages to compete.â&#x20AC;?

With all the snow this winter, theyâ&#x20AC;&#x2122;ve been running pretty well seven days a week, keeping roads open for both buses and oil trucks.

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C7

Three carbon capture proposals for Boundary Dam shortlisted Estevan - SaskPower is moving forward with work on the Boundary Dam Integrated Carbon Capture and Sequestration Demonstration Project. Evaluations are currently underway on carbon capture technologies for the project, according to a Feb. 13 SaskPower release.

In July 2008 SaskPower issued a requestfor-proposals for carbon capture technology for the demonstration project, inviting companies from across Canada and around the world to submit proposals for consideration.

Three companies have been shortlisted to proceed to the next stage for further evaluation – Powerspan Corp., Cansolv Technologies Inc. and Fluor Canada Ltd. “We had an in-

dependent consultant evaluate the proposals based on performance, cost of capture, capital costs, operating costs and associated risks,” said Mike Monea, vicepresident, Integrated Carbon Capture and Sequestration.

“The technologies that were selected present the lowest cost and risk for CO2 capture and are best suited to our demonstration project.”

The Federal Government has contributed $240 million toward the project, which has an estimated value of approximately $1.4 billion.

The companies will now move forward to the next stage of the process, which involves the preparation of detailed project designs, cost estimates and risk profiles. Due to the

rapidly evolving nature of the carbon capture industry, SaskPower will also continue to monitor and evaluate emerging carbon capture technologies and trends in the industry.

The final selection of a carbon capture technology will take place by the end of 2009.

The Boundary Dam Integrated Carbon Capture and Sequestration Demonstration Project will transform the aging Unit 3 at Boundary Dam Power Station into a reliable, long-term producer of clean base load electricity, while enhancing provincial oil production and reducing greenhouse gas emissions, according to SaskPower. The Crown corporation notes the project will result in capital investment,

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increased royalty revenues (from coal and petroleum production) and innovative employment opportunities by extending the life of the unit for another 30 years.

To ensure longterm support for the province’s economic growth, SaskPower will also continue with the development of other supply options. Future options under consider-

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C8

PIPELINE NEWS March 2009

Emergo proposes to buy Ivory Energy for $21 million Calgary â&#x20AC;&#x201C; Ivory Energy Inc. says it has entered into a deďŹ nitive arrangement agreement with privately held Emergo Energy Inc. The $21 million transaction value includes the assumption of debt, working capital and transaction costs.

Ivory continues to produce oil from its Saskatchewan heavy oil properties and natural gas and natural gas liquids from its Obed, Alberta gas property. For the month of January 2009, Ivory estimates its sales by volume to be approximately 1,020 bbls of oil equivalent per day. Routine ďŹ eld operations, including minor workovers, will continue to the

extent reasonably possible.

The transaction will be eďŹ&#x20AC;ected by means of a court approved plan of arrangement in accordance with the Business Corporations Act (Alberta). Under the terms of the arrangement, holders of common shares of Ivory will receive four cents in cash for each Ivory share while holders of 9.5% convertible secured subordinated debentures of Ivory will receive $226.92 in cash for each $1,000 in principal amount of Ivory debentures outstanding.

As of Feb. 10, Ivoryâ&#x20AC;&#x2122;s 52 week high was 48.5 cents per share, reached May 27, 2008, and bottomed out at 1.5 cents a share on Christmas Eve, 2008.

Holders of options and warrants to acquire Ivory shares will receive no consideration and the options and warrants will be cancelled.

The arrangement is subject to the approval by the securityholders of Ivory, as well as court and regulatory

approvals.

The board of directors of Ivory, including a committee of independent directors, has considered the arrangement and unanimously determined it is in the best interests of Ivory and its shareholders given the challenging conditions of the severely constrained equity and debt markets, very low commodity prices and Ivory's position with respect to its lenders.

The Ivory board of directors has retained Haywood Securities Inc. to provide a fairness opinion with respect to the arrangement.

Subject to the satisfaction of customary closing conditions and the receipt of applicable regulatory and other approvals, it is anticipated that the closing of the arrangement will occur shortly after the meeting of securityholders of Ivory, anticipated to be held no later than March 31.

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PIPELINE NEWS March 2009

Boyd sees no need to match Stelmach’s junior energy bailout Regina – Not likely. That was the short answer Energy and Resources Minister Bill Boyd gave when asked if Saskatchewan would follow Alberta’s lead to provide tax credits and drilling incentives to slumping junior to mid-sized energy companies in that province.

Alberta Premier Ed Stelmach told a Calgary Chamber of Commerce luncheon on Feb. 5 that details of an incentive package would be made public in March. Boyd says there has been no demand from energy companies to change the status quo in Saskatchewan.

“We haven’t heard many details about the announcement,” said Boyd the day after Stelmach’s speech. “In Saskatchewan, we feel that we have a very good business climate and we have a royalty structure that is very competitive.

“We do have a number of drilling incentives in place currently. We haven’t been asked by any of the companies to look at any further assistance programs.

At this point in time, we are not contemplating anything of that type. It doesn’t mean that we won’t be, but we have no plans with respect to it.”

In addition to offering small Alberta energy companies tax credits and drilling incentives, Stelmach said his assistance package would include measures to promote more reclamation of abandoned wells.

“The future of the energy sector is of critical importance to this city, but as well to our province,” said Stelmach in Calgary.

Alberta’s new royalty rates announced in October, 2007 and effective since Jan. 1 this year, have been blamed by some critics for the drop in investment and drilling activity.

Boyd says that the fact Saskatchewan didn’t make any changes to its royalty structure, “has resulted in a tremendous amount of investment in the oil and gas sector of our province. We’ve seen huge land sales and drilling that is at a level we haven’t seen in a long time.”

Saskatchewan ended 2008 with a record $1.12 billion in revenue from land sales and Boyd says despite the fact oil prices are down and there has been a pull-back, Saskatchewan is “well placed compared with other jurisdictions.”

As for his take on where the energy sector is headed for the remainder of this year, Boyd says the province will be monitoring the situation closely.

“The price of oil is on the mind of all governments,” he said. “I think the fundamentals are such that we are likely to see prices increase over time. At this point in time, the companies are all evaluated their capital programs for the year” In his Calgary address, Stelmach said although the government doesn’t control global financial markets or the price of commodities, he has instructed his own Energy Minister Mel Knight to “look at the cash-flow situation facing our junior energy companies.

“I know those companies are finding it particularly difficult to access the capital they need for operations – and that means idle rigs and Albertans out of work,” said Stelmach.

In Saskatchewan, Boyd says the province’s stable royalty regime, existing drilling incentives and a competitive taxation system, “hold Saskatchewan in very good stead.

“We are taking a wait and see approach to what happens. We think we have – and there is all indication from the companies themselves – they tell us we have a very competitive structure in Saskatchewan and there isn’t much need for changes.”

C9

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C10

PIPELINE NEWS March 2009

Two RMs eye infrastructure funds to maintain busy oil roads

A grader blades and rips a layer of Áy ash and cement to the subgrade of a road in the RM of Britannia.

Lloydminster –The more things change, the more they stay the same, at least for some regional municipalities like the RMs of Wilton and Britannia when it comes to fundraising for road building and maintenance.

When the RM of Wilton was formed in 1909, one of the first bylaws passed was for the purpose of raising debentures to pay for $20,000 of road improvements.

Fast forward to 2009 and both heavily travelled

jurisdictions are hoping to tap into a new $100 million per capita Municipal Economic Enhancement Program fund in Saskatchewan for urban and rural infrastructure projects.

This fund is part of $500 million worth of infrastructure funding the province has moved up to the current fiscal year from its $1.5 billion Ready for Growth infrastructure program in the 2009-10 budget.

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the federal-provincial Building Canada fund for similar projects that will include roads.

The deadline to apply for the Economic Enhancement Fund was Feb. 28 and both RMs need money to repair their networks of oil and gas roads.

Wilton spends about $7 million a year for its road improvement program.

“We have a number of projects that are engineered and sitting on the shelf and ready to go if funding becomes available,” said Wilton Reeve Glen Dow, shortly after the funding announcement on Feb. 2.

“We’ve looked at the details in the Building Canada fund and we are looking at an application for that one. The new municipal fund is on a per capita basis and we will have to determine what the guidelines are.

“In a rural setting, when you take a look at the population base, cities carry a lot more weight and have a greater need because of that. We will put to good use whatever they (government) feel generous enough to part with.

“In the Northwest part of Saskatchewan, we are in the heavy oil zone. Trucks are the pipelines up here.

That means the economic infrastructure has a significant impact on any kind of road. There is always a need to upgrade the basic road structure.” ɸ Page C11

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C11

Money needed to maintain hectic oil¿eld roads ɺ Page C10 The RM of Wilton has more than 1,626 oil wells and more than 700 km of roads. Dow says about 400 km of the total network is “significantly impacted by oil transport trucks and biproduct transport trucks hauling sand and saline water produced from wells.”

The Husky Upgrader lies within the RM boundaries but Dow says the company is not a high user of infrastructure because a lot of their product is pipelined in and out. “The local wells that supply it have a high impact use on the roads,” he explained.

RM of Britannia Administer, Louis Genest estimates his RM would get $164,000 from the new municipal infrastructure fund to go toward the Green Street corridor road running east and west of Lloydminster, 16 km north of Highway 16. It’s a high volume oil traffic and residential route.

“We typically try to put every cent of grant money that’s been available into roads,” said Genest. “That’s a direct result of the oil and gas industry.

“A total of $164,000 doesn’t go a long way toward a road. Typically, the bottom standard of roads costs us between $100,000 and $150,000 per mile. A corridor road would be quite a bit more.”

The RM has also applied for Building Canada fund for the planned corridor road. The RM has also received amounts ranging from $750,000 to $1 million for road improvements from the provincial Roads to Resources program the last couple of years.

Britannia has approximately 915 km of roads including 90 km of upgraded roads for heavy oil traffic, 40 km of supergrid-gravel roads and 58 km of supergrid paved roads.

“We have some roads that have over 500 primary weight trucks a

day on them,” says Genest. The RM of Britannia, Wilton and Eldon have the highest traffic volume in the province due to the type of oil we have and the method of recovery. For the most part, it’s trucked.”

In the RM of Wilton, Dow says spring road bans are handled “in a manner to enhance industry and minimize the impact of roads.

“Our spring road ban program is internal so we monitor the roads carefully. If we get into a situation where the damage would be too excessive, we try to

make the ban as short as possible. We have a graded scale whereby load would be based on certain conditions.

We have a lot of roads and they all take a beating. Sometimes we have completed road failure in wet weather.

Our base is clay and silt. If you put enough weight on it you can lose complete sections of road.

A few years ago, we put about $1 million of rocks on the road just to solve that problem. One of the challenges in this area is that there isn’t much of a base.”

A tractor works on a section of improving the subgrade of 4 Mile Road in the RM of Britannia.

Photo submitted

The RM won a Municipal Service Excellence award in 2007 for its full-depth subgrade strengthening of roadways. It has more sandy land for building better roads than Wilton does with primary weights allowed in summer and

winter.

“We allow that because of some the road agreements that we have with oil companies are a mutual benefit. There is no doubt, that does place a big strain on the roads and we could sure use the money. We have

some mechanisms to recover costs from the oil companies.

“We make our best effort now to let one of these grant programs slip by us because it’s so necessary. Our truck station budget is over $7 million a year.”

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PIPELINE NEWS March 2009

Heavy lifters Regina - Rock is heavy. Imagine moving dozens of boxes full of rock each day, pretty much all day.

That’s what the warehouse staff do each day at the Saskatchewan Subsurface Geological Laboratory, also known as the core repository, in Regina.

“These boxes are pretty heavy,” notes Kim Desjarlais, who heads up the warehouse staff of the core repository. “Our guideline is they shouldn’t lift more than about 10 tonnes a day, and preferably not on successive days.”

“Some days, if it is really busy, they can hit their limit before lunch.”

In that case, they switch off, operating the forklift instead, for instance.

“It is repetitious. You probably get an average 45 to 50 lbs a box.”

Some are heavier.

Do they hire body builders?

“No. We try to keep them short,” he laughs. Tall guys have a rougher go of it, apparently.

Usually companies will phone ahead, requesting core be pulled. “Usually we can have it on the table before they get here.”

One of the most critical things about core is keeping it organized, laid out in the right order, and keeping everything facing the right direction. “Everything’s in order out there,” he says.

When hiring new staff, does one of the interview questions ask how clean they kept their bedroom?

No, he says, laughing. “Actually mine was pretty messy.”

Each of these boxes weighs an average for 45 to 50 lbs per box, and each core sample is 12 to 14 boxes. Moving them takes some serious effort by warehouse staff at the Saskatchewan Subsurface Geological Laboratory.

Photo by Brian Zinchuk

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Jerry Mainil shop nears completion Weyburn – Going up a little slower than expected, a new shop for Jerry Mainil Limited in Weyburn is rising just to the east of their main facility.

“It’s not going as fast as we’d like to see things,” says Dennis Mainil. Originally the 12,000 square foot A new 12,000 square foot shop is being constructed on the east side of Jerry Mainil Limited’s main facility was planned for Nov. 1, then December. Now building, on the southeast corner of Weyburn.

Photo by Brian Zinchuk it looks like it will be mid-March before the building is up. They knocked down the previous building on that site in August, last year.

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There will be four bay doors, including one that is Secondary Wellhead Containment 22 feet high and 28 feet wide, for large projects. The purpose of the building will be storage and fabricaThis is what our customers are saying... tion, according to Mainil.

“At least we’ll have the shell up and heated,” he I am pleased to say the operators are ecstatic about the new version of covers on this last round of says, noting the delays in construction were due to containments. We tried some of your competitors containments and I surely wish we had not. last year’s boom.

Things have slowed down since then, however.

In any case we will be putting in an order later in the fall and you will be our only supplier from now on.

“We’ve had to cut back,” he noted in mid-February.

“It’s definitely slowed down. It’s definitely a Bruce Miners slower economy than what it was.” enerPLUS RESOURCES He points to the decline in rig counts, stating Pembina Lead Operator there is a direct correlation between the rig counts and their activity. “If they go, we go. If they stop, we stop.”

“Make hay while the sun shines,” Mainil says, noting they are “just waiting in the wings.”

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PIPELINE NEWS March 2009

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C15

Saskatchewan Ministry of Energy and Resources Petroleum Geology Branch, Southern Geoscience: Geoscience Knowledge and Research Capacity (December, 2008) Saskatchewan’s Subsurface Geology Laboratory in Regina has eight in-house geologists. Each has several specialties, but they are also generalists, with a provincewide perspective. One of their main reasons for being is to offer assistance to those who need it.

5 Senior Research Petroleum Geologists: Fran Haidl SK stratigraphy, general (1); Lower Paleozoic (1); Bakken west (2)

3 Research Petroleum Geologists:

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•Unconventional gas (1); Oil, southwest (2); NGC (2); Melinda Yurkowski Post-Mannville to base glacial cover (1); Subsurface resources, general (2); Oilsands (2); PGB computer databases, protocols (2); Technical editing SK stratigraphy, general (2) (2); Oil-resource assessment (2) Chao Yang Devonian (1); Bakken east, Torquay (2)

•Potash (1); Oil-resource assessment (1); Brines (2); Oil, Bakken-east, Torquay (2); Geothermal (2); Regional hydrogeology and fluid migration (2)

Arden Marsh Post-Mississippian to base Colorado (1); Structure (1); Mississippian (2)

•Regional geoscience framework (1); PGB computer databases, protocols (1); Oil, southwest (1); Heavy oil (Mannville) (1); Basin modeling (1); Coal (1); Oil-resource assessment (2); Oilsands (2);Technical editing (3)

Erik Nickel Mississippian (1); Bakken east, Torquay (1)

•CO2 storage and EOR potential (1); NGC (1); Oil, southeast (1); Oil, Bakken-east, Torquay (1); Basin Modeling (1); PGB computer databases, protocols (2); Oil-resource assessment (2); Coal (2); Industry consulting (2); Technical editing (3)

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Dan Kohlruss Bakken west (1); Post-Mississippian to base Colorado (especially Mannville Sands, west-central) (2)

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PIPELINE NEWS March 2009

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SECOR Refresher – Apr. 1 COR – Apr. 2-3; Virden, MB – Apr. 6-7 Fall Protection – Apr. 1-2; 4-5 Rig Rescue – Apr. 3; 6 Well Service BOP – Apr. 13-16 Service Rig Assessor – Apr. 17 Safety Mgmt. & Reg. Awareness – Apr. 20-22 SMRA Refresher – Apr. 23 1st Line BOP – Apr. 20-23

We Know Downhole

Early Safety Training Week in Estevan & Carlyle – Apr. 13-19 Students ages 16-21 may apply for an Early Safety Training Bursary Oxbow Safety Training Week - March 23-27 CPR/1st Aid; C. Space; H2S Alive; Gr. Disturbance Carlyle Safety Training Week - March 30 – April 3 CPR/1st Aid; H2S Alive; Gr. Disturbance; C. Space Carnduff Safety Training Week - Apr. 20-24 C. Space; Gr. Disturbance; CPR/1st Aid; H2S Alive SEESS (Southeast Environmental Safety Seminar) Mar. 18 in Weyburn, SK Contact Debbie for info 306-637-4926 ENFORM Classes at the Estevan Campus: Incident Command Systems – Mar. 9 The Petroleum Industry in Canada – Mar. 31-Apr. 1 Supervision, Team Leadership & Motivation – Apr 6 Safety Inspection Skills – Apr. 14-15 Safety Training for Jobsite Supervisors – Apr. 16-17

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SAIT Business Courses at the Estevan Campus: Supervision Skills – Mar. 26-27 Presentation Skills – Apr. 30

For more info or to register call toll free 1-866-999-7372 Call us if you need a class set up just for you – we deliver safety training on our site or yours.

We also offer 1A Truck Driving Call 637-4921 for info.

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“Packing Quality and Service into Everything We Do” 634-7966 • 106 Perkins Street, Estevan, SK www.xtremeoiltools.com E-mail: cmcgillicky@xtremeoiltools.com

PIPELINE NEWS March 2009

C17

She fell in love

Buddy’s Pub attracted a lifetime bartender to move from Tumbler Ridge, BC to Arcola.

Photo submitted

By Brian Zinchuk Arcola - It’s a trip back in time, travelling up the stairs to Buddy’s Pub in the former town hall building of Arcola.

“I’ve been a bartender all my life. I was born in Saskatchewan, I wanted to come home,” says Ramona “Ronnie” Aschenbrenner.

She and her partner Gary Kerr bought the High House, a heritage building that used to be the town of Arcola’s town hall. The brick building is old, and you have to sling a lot of beer to heat it, , but boy, has it got character. The upstairs bar looks like a time warp. The main floor is Shirley’s Buffet, and there’s also Michael’s Pizza, a takeout joint.

“I saw this one, fell in love, and we bought it,” Aschenbrenner says of the bar.

It probably doesn’t hurt to have all the young men working in the oilpatch in the area. She notes the town has been very supportive.

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C18

PIPELINE NEWS March 2009

Saskatoon to Fort McMurray:

This is a side view of the pressure vessel as it made it way into Rosetown on the Àrst day of a nine-day delivery trip from Saskatoon to the oilsands of Fort McMurray.

Photo by Ian MacKay, The Rosetown Eagle

By Geoff Lee

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Saskatoon –The job of transporting one of the heaviest and longest loads on the roads of Saskatchewan to Fort McMurray caught the attention of rubberneckers when the mega load left Saskatoon Feb. 17.

The behemoth is a pressure vessel made by Hitachi Canadian Industries Ltd. in Saskatoon and is over 200 feet long and weighs more than 384 metric tons.

It took nine days to move by Mammoet Canada Western Ltd. under the direction of project manager Bert Bergermann along with two police escorts and four pilot vehicles for safety.

The Pipeline News caught up with Bergermann just as the convoy began moving west on Highway 7 after a tricky overnight journey out of Saskatoon. Once it’s on the highway, it can only be moved in daylight hours.

“This one has attracted more attention because it’s the first one of this size

out of Saskatoon,” said Bergermann.

The vessel, known as a vertical refinery processing tower, took three and a half days to load beginning Feb. 12 and sparked a celebration among HCI employees who worked on the assembly.

“They worked very hard over the last year getting the vessel out,” said Murray Daku, HCI’s vice-president in Saskatoon. “At the end of the day, we completed it on schedule.”

The shipment was the largest product ever made at its facility in Saskatoon.

“It was a big event,” said Daku.

“We had cake and coffee for all of our employees a couple of afternoons when it was done.”

HCI began making pressure vessels for the energy sector in 2002. Pressure vessels are large steel tanks use to store process gasses and liquids used during the oil extraction, upgrading and refining process. ɸ Page C19

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PIPELINE NEWS March 2009

C19

delivery a feat to complete

This monster sized pressure tank over 200 feet long made by Hitachi Canadian Industries in Saskatoon took nine days for Mammoet Canada Western Ltd to move to Fort McMurray.

Photo by Greg Pender, Saskatoon StarPhoenix

ɺ Page C18 “Over the past few years, we’ve done a significant volume of work for the oil industry, but things have slowed down recently,” said Daku.

“Pressure vessels are a small part of our business but we are positioned for future growth in this area.

“Pressure vessels are one of our four main product lines. We do work in the power generation field, wind turbine industries and after-sales service work for power generation equipment.

“One of our strategic focuses is to target more oil and gas work. There is other work in the chemical industry that we can use similar capabilities. If the local (Saskatchewan) oil sands market develops, we will be very interested in participating in it.”

Daku says the design and planning for the Fort McMurray pressure vessel began back in October 2007 with production starting last April.

The final assembly of the vessel was completed on rails and rolled out of the HCI shop and lifted

by Mammoet’s overhead cranes onto a pair of hydraulic pressure trailers that were bolted together.

“These are 10-axle trailers and there is one under each end of the vessel with a turntable,” explained Bergermann.

“We had a lot of spectators come by the Saskatoon shop when

we were loading. We also had a lot of media coverage when we left our parking spot just west of Saskatoon.”

The transportation route and planning took months to complete and involved detailed coordination between HCI, Mammoet and government agencies like SaskPower to find a safe route.

The convoy planned to take Hwy. 7 to Alberta where it becomes Hwy. 9 and head north on Hwy. 36 near Hanna on route Mammoet has taken before to Fort McMurray.

Top speed for this convoy was 39 km/h and the convoy had to pull over now and then to let traffic go by.

“Traffic is not really a danger unless someone doesn’t follow the police or pilot vehicle direc-

tions,” said Bergermann.

“It’s not an exceptionally wide load. It’s 21 feet which is wide enough, but the length is a bit of a challenge.”

Bergermann either follows or leads the convoy in a pickup truck and says his job as project manager during transit is to make phone calls or decisions. Where to stay and park has been predetermined by route supervisors.

“We have to find somewhere to park where we can pull in and out of easily,” said Bergermann We can’t make tight turns especially at corners that are perpendicular. There are a few spots where we have a good angle to approach to get the vehicle in and out.”

Mammoet is a heavy lifting and hauling company with operations in

Edmonton, where they mostly transport heavy oil equipment in Alberta that comes by rail overseas or is made in Edmonton.

“Saskatoon is also becoming a viable option to ship from,” said Bergermann. “We have also shipped from Lloydminster.”

Daku thinks it was a matter of capacity in shops closer to Fort McMurray and HCI’s competitiveness that landed his company the contract.

“When it comes right down to it. We are not a lot further from the oilsands than a shop

in Calgary. Edmonton would just be that much closer,” he said.

Once the pressure vessel arrived the plan

was to install it in the vertical position at a height of just over 62 m or 19 storeys high. It is 5.2 m wide.

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C20

PIPELINE NEWS March 2009

Boom and bust land sales shadow world economy

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Â&#x201E; By Geoff Lee Regina â&#x20AC;&#x201C; Gravity has brought once soaring oil prices and land sales back to earth with a thud. The reaction to the sales echoed the thud.

The February 2009

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sales of Crown petroleum and natural gas right bought in just $6.3 million in revenue compared with a recording setting $197 million in February, 2008. This yearâ&#x20AC;&#x2122;s sale is only 3.4 per cent of the February 2008 total. Land sales

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revenue hasnâ&#x20AC;&#x2122;t been this low since February 2000 when sales tallied $5.4 million.

The reaction to this yearâ&#x20AC;&#x2122;s sale by Energy and Resources Minister Bill Boyd was also in stark contrast to his comments following the

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great start to last yearâ&#x20AC;&#x2122;s record-ending total of $1.12 billion.

This year Boyd said, â&#x20AC;&#x153;The lower results for the February land sale are not entirely unexpected. â&#x20AC;&#x153;The 75 per cent drop in the spot price of oil in the last seven months is a major contributing factor, along with the now much tighter ďŹ nancial markets in which energy companies are operating. â&#x20AC;&#x153;We are not alone here, and see those new global market conditions reďŹ&#x201A;ected in recent lower land sale results in Alberta and British Columbia.

Flashback to the record sale of February 2008 when a happier

Boyd said, â&#x20AC;&#x153;These numbers are simply incredible and are a great start to 2008 for our province and our oil and gas industry. â&#x20AC;&#x153;They speak to the dynamic investment climate for our oil and gas resources, and underscore the heightened interest in the rich Bakken oil play in southeast Saskatchewan and the emerging oil play in the Shaunavon area.â&#x20AC;?

This year, the Lloydminster area led land sales with bonus bids of $3.1 million. The Weyburn-Estevan area was next at $2.2 million, followed by the Kindersley-Kerrobert area at $520,000 and the Swift Current area at $503,000.

In February, 2008 the highest price paid for a single parcel was $30.7 million. This year, the highest price paid for a single parcel was $411,000.

Sandstone Land & Mineral Company Ltd. acquired this 65-hectare lease in an oil pool 35 km northeast of Lloydminster.

In 2008, the highest

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price paid on a per hectare basis was $15,255 compared with a per hectare price of $6,889 paid in 2009.

Prairie Land & Investment Services Ltd. bid over $111,000 for a shallow rights lease of a 16-hectare parcel above the Bakken Formation, 16 km east of Redvers.

Despite the boom and bust comparison of year- over- year land sales, Boyd remains optimistic. â&#x20AC;&#x153;We are coming oďŹ&#x20AC; a record 2008 calendar year for land sales, and the two-year exploration licences that many companies bought should result in a shift from land acquisition to drilling and exploration as those companies move to maximize return on their investments,â&#x20AC;? he said in a news release. â&#x20AC;&#x153;As well, companies investing in our province are aware that attractive oil and gas plays like the Bakken and Lower Shaunavon are like â&#x20AC;&#x2DC;money in the bankâ&#x20AC;&#x2122; to them over the medium and long term.â&#x20AC;?

Last February, Boyd exclaimed, â&#x20AC;&#x153;We have a great oil and gas story to tell, and Premier Wall and I have been telling that story across the country.â&#x20AC;?

The February 2009 sale included two petroleum and natural gas exploration licences that sold for $339,000 and 144 lease parcels that attracted $5.9 million in bonus bids.

The next sale takes place April 6, 2009.

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PIPELINE NEWS March 2009

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PIPELINE NEWS March 2009

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PIPELINE NEWS March 2009

C23

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2 Years Experience

4 Years Experience

NW Saskatchewan and NE Alberta NW Sask - for all of your advertising needs contact: Ph: 780.875.6685 Fax: 780.875.6682 Email: daniela@pipelinenews.ca

Daniela Tobler Sales Manager

C24

PIPELINE NEWS March 2009