Pipeline News December 2010 by Pipeline News

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

December 2010

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Canada Post Publication No. 40069240

Peak Oil

Volume 3 Issue 7

Will They Pay More For Gasoline? A10 GCCL Enters Merger B1 Sask Peak Not Here Yet C1 Photo by Brian Zinchuk

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PIPELINE NEWS December 2010

News

Notes SAGD for Onion Lake

BlackPearl Resources Inc. said its board of directors has approved a 2011 budget that will see it spend between $130 million and $150 million, mostly at its three core areas. The program is to be funded from working capital and cash flow. The company retained Sproule Associates Limited to prepare a contingent oil resource assessment of its three core properties – the planned Blackrod steam assisted gravity drainage project in the Athabasca oilsands region in Alberta, the Onion Lake heavy oil property in Saskatchewan and the heavy oil property at Mooney in northern Alberta. At Onion Lake, BlackPearl drilled nine development wells in the third quarter. These wells will be completed and put on production in the fourth quarter. Due to surface access restrictions, BlackPearl got a late start on its fall drilling program. As a result, it expects to only drill 30 to 35 wells from its 70-well program before year’s end. Remaining wells from the fall program will be drilled in the first quarter. Over the next three to five years BlackPearl plans to drill more than 200 wells and then convert a portion of the Onion Lake field to SAGD.

NuVista drilling in Birdbear For the fourth quarter of 2010, NuVista Energy Ltd. plans to focus drilling activities primarily on oil targets but will continue to selectively drill liquid-rich natural gas prospects. The company said it will drill approximately 11 wells (eight oil wells and three natural gas wells), of which nine are planned to be horizontal wells. Of the oil wells, ﬁve wells are located in NuVista’s Wapiti and Pembina operating areas primarily targeting Cardium oil and three wells are in west central Saskatchewan targeting the Birdbear formation. Briefs courtesy Nickle’s Daily Oil Bulletin

Saskatchewan best bet for drilling in 2011 By Geoﬀ Lee Pipeline News

over 2009 to 11,350. “Although still a long way from the almost 25,000 wells of 2005, it represents a new beginning Calgary – The Petroleum Services Association of on a number of fronts.” Soucy cautions that PSAC’s drilling activCanada (PSAC) forecasts a strong year for oil drilling activity in 2011, especially in Saskatchewan and ity forecast for 2011 is based on crude oil prices of US$80 a barrel and an average natural gas prices of northeast AlberC$4 per million ta, and continued cubic feet. weakness in gas “In 2011, drilling, most nooil prices will be tably in southeast adequate to susAlberta. tain oil activity,” PSAC exsaid Soucy. pects a total of “As a result, 12,250 wells to we are forecastbe drilled across ing an increase Canada next year, in drilling in oil topping an exareas like Saspected year-end katchewan and total of 11,350 northeast Alwells for 2010. berta. Saskatch“Gas pricewan is expected ing, on the other to lead the way hand, remains in 2011 with an relatively low, estimated 16 per and we are not cent increase in expecting any the drilling rate signiﬁcant gas to 3,050 wells, price turnaround followed by a 10 in 2011. per cent jump in “That, comManitoba to 500 bined with inwells. dustry’s focus PSAC estion shale gas mates Alberta will drilling, has led drill 7,915 wells, us to forecast an a ﬁve per cent 11 per cent drop increase, while in the convenBritish Columtional shallow bia is expected to gas drilling area drill 700 wells for of southeast Ala small one per berta.” cent increase in PSAC is the the drilling rate. national trade The forecast association repfor 2011 follows resenting the news from Roger service, supply Soucy, the outgoand manufacing president of PSAC, that drill- Saskatchewan drilling rigs, like Red Dog Drilling Rig 3, seen turing sectors File photo within the uping activity con- here, are expected to have an active 2011. stream petroleum tinues to pick up industry. as 2010 draws to The organization represents a diverse range of a close. “This past year has been a turnaround year for over 250 member companies, employing more than the industry,” said Soucy in a news release. “We are 52,000 people and contracting almost exclusively to anticipating a 35 per cent increase in wells drilled oil and gas exploration and production companies.

PIPELINE NEWS December 2010

News

Notes Alberta Star Lloyd wells producing

The AW139 lifts off during the AMTC conference in Minneapolis. Saskatchewan plans on leasing two of these helicopter air ambulances. Photo by Mark Mennie/STARS

Crescent Point donates $5 million for air ambulance By Brian Zinchuk Pipeline News Regina, Calgary – The government of Saskatchewan has been looking at launching a helicopter air ambulance for a while, but it was a major boost by Crescent Point Energy Corp. that will help get the birds off the ground in the coming years. In the Oct. 27 speech from the throne, the provincial government announced it was pursuing helicopter air ambulances, also referred to as helicopter EMS (emergency medical services). Saskatchewan Party MLA Rod Gantefoer is quarterbacking the government’s efforts on the air ambulance. He held the finance portfolio until this past summer, when he decided not to run for office again. Gantefoer told Pipeline News the Saskatchewan Party had looked into helicopter emergency medical service while they were still in opposition, prior to the 2007 election. The province looked at it a year ago, but with a recession underway and a huge hole in the budget due to sagging potash royalties, it was deemed unaffordable at the time. Crescent Point Energy Corp., along with STARS, the Alberta Shock Trauma Air Rescue Society, made a presentation to Saskatchewan’s Minister of Health Don McMorris a couple of months ago, Gantefoer said. Crescent Point, one of the major players in

southeast Saskatchewan’s Bakken play, brought more than the idea to the table. They committed $5 million over four years. It’s something the company hinted at during the Weyburn Oil Show in June of 2009. It was the largest donation, by far, to the STARS program its 25 year history, according to Dr. Greg Powell, founder, president and CEO of STARS. “It’s a big deal for the province, and us as well. Saskatchewan is 90 per cent of our business,” said Trent Stangl, Crescent Point’s vice-president of marketing and investor relations. Crescent Point has taken a proactive approach to the communities they work in, he said. They had been looking at Alberta’s STARS program for several years now. This is an opportunity to give back to the community, or as Stangl put it, “Our way to say ‘Thank you.’” Approval “We discussed it at a caucus retreat in August. The decision was made to put it in the throne speech,” Gantefoer explained. Saskatchewan is in discussions to sign on with the STARS program, which has operated in Alberta for the last 25 years. A memorandum of understanding has been signed, but there is still a lot more to sort out. There are several advantages to joining STARS as opposed to having a stand-alone program, including experience and backup of hardware. ɸ Page A6

Alberta Star Development Corp. advises that three of the five standing cased wells located on the Lloydminster, Alta., assets acquired in August are now completed and producing in aggregate approximately 90 bpd (30 bpd net to the company) from the Sparky formation. Completion of the fourth well located on Section 15-14-50-1-W4M, is expected in the next few days, with the fifth and final standing cased well scheduled for completion over the weekend. Alberta Star holds a 33 1/3 per cent working interest in these assets. Aggregate production from Alberta Star’s three successful in-fill wells located at 6-50-2 W3M in Landrose, Sask., has stabilized at approximately at 240 bbls a day (62.5 bpd net to Alberta Star). Alberta Star has secured a drilling rig for the first week of December to commence drilling operations on two additional in-fill locations on section 6-50-25 W3M. The company’s current net production, primarily from its heavy oil interests in Landrose, Saskatchewan, Lloydminster Alberta and Maidstone, Saskatchewan, is approximately 225 bpd.

Culane exploring southwest Culane Energy Corp. says it has now completed the final closing of its previously announced bought deal private placement of 2.25 million “flow-through” common shares at an issue price of $1.45 per share for gross proceeds to the company of $3.26 million. The gross proceeds from the offering will be used to fund ongoing exploration activities eligible for Canadian exploration expenses to advance Culane’s exploration program in southwest Saskatchewan. Briefs courtesy Nickle’s Daily Oil Bulletin

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EDITORIAL

PIPELINE NEWS December 2010

Pipeline News Publisher: Brant Kersey - Estevan Ph: 1.306.634.2654 Fax: 1.306.634.3934

Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.

Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.461.5599 SOUTHWEST Swift Current 1.306.461.5599 NORTHWEST Geoﬀ Lee - Lloydminster 1.780.875.6685

Associate Advertising Consultants: SOUTHEAST • Estevan 1.306.634.2654 Jan Boyle - Sales Manager Cindy Beaulieu Glenys Dorwart Kristen O’Handley Deanna Tarnes SOUTHWEST • Swift Current 1.306.773.8260 Doug Evjen Stacey Powell NORTHWEST • Lloydminster Daniela Tobler 1.780.875.6685 MANITOBA • Virden - Gail Longmuir 1.204.748.3931 • Estevan - Jan Boyle 1.306.634.2654

To submit a stories or ideas: Pipelines News is always looking for stories or ideas for stories from our readers. To contribute please contact your local contributing reporter. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, but is now available online at www.pipelinenews.ca Advertising in Pipeline News: Advertising in Pipeline News is a newer model created to make it as easy as possible for any business or individual. Pipeline News has a group of experienced staﬀ working throughout Saskatchewan and parts of Manitoba, so please contact the sales representative for your area to assist you with your advertising needs. Special thanks to JuneWarren-Nickle’s Energy Group for their contributions and assistance with Pipeline News.

Pipeline News Estevan, SK Ph: 306.634.1015 Fax: 306.634.1041 Published monthly by Glacier Ventures International Corporation, Central Oﬃce, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see ﬁt. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.

Editorial

Is there opportunity in peak oil? The world will eventually run out of oil. For this, there is no doubt. The question is when? So far, the world has been able to keep increasing production to meet demand. At some point, however, we will no longer be able to increase production. This is the “peak” in peak oil theory. The scary part will be when we get on the decline side of production. Each well, each field, will eventually see a peak in production. Cumulatively, entire jurisdictions will also peak. M. King Hubbert, the author of peak oil theory, accurately predicted in 1956 that United States production would peak in the early 1970s. Alberta’s conventional production has been in decline for years, to the point where Saskatchewan’s production is now neck and neck with Alberta, excluding oilsands production. The big question is, what happens when this occurs on a global scale? A lot of people thought this might have been the case in mid-2008, when oil spiked at $147 a barrel. However, those high prices, combined with a housing financing disaster, helped push the world into a recession, temporarily cutting back demand and causing prices to plummet. One thing is for sure, however; long-term demand for energy will continue to rise. The global population is still on a sharp rise. Second World countries – Brazil, India and China, are on the economic rise, with strong demand for personal automobiles. Cars like the Indian Tata are much, much more affordable. Where are we going to get this energy from? Do we take food out of the mouths of the hungry to create ethanol? Let’s say the world does realize we’re at peak production globally. What happens then? Some nations, particularly Europe, are better positioned than others. They’ve already put a big push on alternative energy such as wind turbines.

There will likely be fighting for oil resources. If you think Gulf Wars I and II were nasty, just wait a few more years. The west will be in the Gulf again. Even the German Army is currently studying the security implications of peak oil. What will happen to the world order? United States policy up until now has been essentially, “If there’s oil in the world, it’s ours, and we get to use it.” What happens when someone, like OPEC did in the 1970s, says “No?” Lifestyle issues will affect everyone. The most likely place to see cuts will be in transportation. Remember 2008, when you could buy a gas guzzler SUV for a song, and the term “staycation” came to the fore? Sure, we can travel to anywhere in the world on a whim today. But we might not be able to afford it tomorrow. We will be connected globally by electrons instead of business class. On the production side, high oil prices make a lot more options viable. Expensive enhanced oil recovery techniques for tertiary production become affordable. We’ll see a lot more emphasis on developing the less-than-easy to get at oil, in particular the oilsands and heavy oils of Saskatchewan. So far, just a tiny fraction of Saskatchewan’s heavy oil is recoverable today, and none of its oilsands have seen commercial development. If Saskatchewan can maintain its current production around 425,000 bpd, as it has for about the past 10 years, and keep going at that rate or even grow it, we stand to benefit tremendously economically. We had a banner year fiscally in this province in 2008. It has been technology improvements in enhanced oil recovery, drilling and completions, that has allowed us to maintain that plateau. If we can stay flat when the world starts to decline in production, we will do well. But if our production starts to decline as well, we’re in for a bumpy ride.

PIPELINE NEWS December 2010

Opinion Helicopter air ambulance getting off the ground From the top of the pile Brian Zinchuk

It was with great joy that I came across the throne speech announcement of a new helicopter air ambulance service in Saskatchewan. It’s going to take another 14 to 16 months to get oﬀ the ground, literally, but it will be well worth it. As part of their regular safety regimen, Alberta contractors in the oilpatch prepare for the possibility of air ambulance rescue. This is not something we’ve had in Saskatchewan. Helicopter air ambulance may have been pioneered during the Korean War 60 years ago, but we haven’t adopted it until now. I spoke to a safety co-ordinator I know with a large contractor – a Saskatchewan boy working in Alberta. He pointed out there are several considerations for such a service. Where he’s currently working, in northern Alberta, they use two other helicopter services, as they are out of the range of the Edmonton and Grande Prairie bases of STARS. While helicopters by nature can land pretty much anywhere, one of the big considerations is knowing where to land. It’s common for the people

calling in a helicopter air ambulance to mess up their GPS co-ordinates. “It’s not a simple as it sounds,” he said. Additionally, certain landing conditions are not amicable to helicopters – trees, power lines, sand, and oilfield batteries being among them. That’s why they prepare staged landing zones (LZs). The helicopter service will have pre-arranged flight plans for those LZs, so they will know where to go and how to get there. Additionally, if the primary zone is fouled for some reason, there should be a secondary not terribly far away, say every 10 to 15 miles. They make a point of clearing these landing zones of snow on regular basis. The companies train their staff how to set up ad hoc LZ, blocking traffic on a road, for instance. It’s as much of their regular training as H2SAlive. We will likely see helipads staged throughout much of southeast Saskatchewan. Most hospitals out in the rural areas of Saskatchewan will eventually want to set up their own designated helipads. In the bush, the companies stage barrels of aviation fuel at their designated landing zones, along with hand pumps, so that helicopters can refuel if they are going to a place beyond their normal operating range. Perhaps that might be something to consider for places like Arcola. I am somewhat concerned that the plan is to rely on fundraising for a large portion of the budget. Crescent Point Energy has stepped up with the first major donation, $5 million over four years, to launch the Saskatchewan STARS program. But that still leaves a $4 to $5 million hole in the budget each year.

That’s more than Telemiracle took in last year – and that’s a province-wide, months long effort. My friend, however, is not terribly concerned, saying that once one oil company has stepped up to the plate, others will, too. I hope they do. The oil and gas industry is incredibly charitable. I just hope that the new air ambulance service doesn’t lead to some donor fatigue. Does ABC123 Oil Company give $100,000 to the local swimming pool when it needs replacement, or to the STARS program? Will there still be money for both? The safety guy told me that donations for LZs, medevac and the like come out of strategic infrastructure budgets, where as swimming pools come out of the public relations pot. Oil and Gas firms invest in these programs as it is far cheaper than running their own, he said. Thirteen years ago, my grandfather had a massive stroke while sitting on his couch on his farm near Arran, Sask. If he had been able to get to a hospital within the crucial first few hours, perhaps clotbusting drugs could have spared him the indignity of living the remaining months of his life in a severely disabled state. I am heartened to hear from STARS that they recently assisted a man at Grande Prairie who also had a stroke. They landed in his yard. He’s now doing fine. Hopefully, that will be the final outcome for more people here in Saskatchewan, with timely response from Saskatchewan’s new helicopter air ambulances. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

Syncrude pays dearly for dead ducks Did Syncrude get off too lightly with a $3 million fine determined by an Alberta court judge in October for the death of approximately 1,600 ducks in one of its tailing ponds in 2008? The company was fined the maximum for two charges under respective federal and provincial laws: $300,000 for the federal charge and $500,000 for the provincial charge. A further $1.3 million will be paid to a University of Alberta research project into bird migration and the effectiveness of bird deterrents. Another $900,000 will go towards a habitat conservation project at the Golden Ranches property in the Cooking Lake Moraine area east of Edmonton. Also $250,000 or one-half of the provincial fine will go to Keyano College in Fort McMurray to develop a wildlife management technical diploma program, focused on Aboriginal students. This sentencing, called “creative” in some quarters, was also called a “slap on the wrist” by a Greenpeace representative in light of the fact Syncrude had revenues of over $7 billion in 2009. No matter where one stands on the sentencing, the fact of the matter is that the image of those dead birds tarnished the entire image of the oilsands industry. Compounding the problem was the euthaniza-

Lee Side of Lloyd Geoff Lee

tion of 230 more ducks that landed in Syncrude’s tailings ponds and those of Suncor and Shell just one week after the sentencing. The images of dead birds were central in last summer’s Rethink Alberta campaign led by U.S. environmentalists linking the oilsands with damaging environmental practices. The San Francisco-based Corporate Ethics International compared Alberta’s oilsands with the British Petroleum oil spill in the Gulf of Mexico. That, in turn, prompted the Alberta government and organizations such as the Canadian Association of Petroleum Producers to invest millions of dollar in an ongoing public relations blitz to counter those damaging claims. Syncrude’s legal ﬁne works out to approximately

$1,868 per duck. The total cost to the image of the industry, counting all of the money spent on the public relations war by antagonists and protagonists since the ducks were found dead, is incalculable as the costs continue to mount, and the debate continues. Syncrude’s president and CEO Scott Sullivan stated in his company’s news release, “The public expects better from a leader in the oil sands, as do we. “We sincerely regret what occurred and have made changes to our waterfowl protection system. This sentence reflects the seriousness of what occurred.” When it comes to determining if Syncrude got off lightly, the fine itself suggests it did, but the total long term cost to Syncrude’s image and image of the entire oilsands industry as a result of the initial incident leads to a definite no. The deaths of the ducks in a Syncrude tailing pond became the perceived shared sins of the entire industry and the province of Alberta, which is a heavier price to pay that any fine, given the importance of the oil and gas industry. Did Syncrude get off too lightly with a $3 million fine? The answer is no. They paid a much heavier price than $1,868 per dead duck and they continue to pay with the latest incidents.

PIPELINE NEWS INVITES OPPOSING VIEW POINTS. EDITORIALS AND LETTERS TO THE EDITOR ARE WELCOME. Email to: brian.zinchuk@sasktel.net

PIPELINE NEWS December 2010

Crescent Point spurs air ambulance ɺ Page A3 Capabilities STARS currently operates three primary BK117 helicopters in Alberta, and maintains two additional aircraft for pilot training and aircraft backup. They have purchased two high technology Augusta Westland AW139 helicopters for Alberta, with the ﬁrst to be operational in 2011. Gantefoer said Saskatchewan will be leasing two new Augusta Westland AW139 helicopters, the same model as two new helicopters that are being added to the existing Alberta ﬂeet. By working together, Gantefoer said there are savings to be had. With common parts and servicing, Saskatchewan will be able to reduce its costs as it will not have to carry its own inventory of parts. Helicopters will be sent to Alberta when substantial maintenance is required. However, that will

not leave Saskatchewan empty-handed. By joining an existing fleet, back-up units will be sent here whenever a Saskatchewan-based aircraft is unavailable for service. The new helicopters have a greater range, and are much faster than the current BK117s. They will have a 310 km unrefueled operating range, allowing coverage of nearly all of the populated areas of southern Saskatchewan. They have a cruise speed of 306 km/h and a maximum speed of 320 km/h, according to Cam Heke, STARS spokesman. According to Powell, the Augustas will have de-icing equipment. They had significant difficulties with the first unit that wasn’t equipped with it, so they switched to a de-iced model. Augustas are comparable in size to the iconic Bell Huey. The aircraft will be

completely-dedicated air ambulances, equipped with a winch for vertical rescue if needed. Bases Gantefoer said one helicopter will be based in Regina, with the other in Saskatoon. Powell said by basing in those two locations, about 94 per cent of the population of Saskatchewan, if not the area, will be within the range of service. They eventually will have staged refuelling depots. Beyond the AW139’s 310 km range, a ﬁxed wing air ambulance usually makes more sense, he explained, as it is faster. Now the province needs to work out the intricacies of how the program is going to work, with the trauma centres in each city requiring helipads to be installed. Hanger space also needs to be arranged, and ﬂight plans pre-arranged. “We’ll start there, and see what else is required,” Gantefoer said.

WE RENT

The AW139 at night. STARS pilots are equipped with night vision goggles for night missions. Photo by Mark Mennie/STARS

Asked if the province will be paying for helipads to be installed at hospitals throughout rural Saskatchewan, he noted, “We’re going to have to walk before we can run.” Gantefoer said that communities will likely have to do that themselves. A helipad is a “minimal investment,” he not-

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16 months,” he said. Powell said it depends on how soon they can get aircraft from the manufacturer. In addition to the physical requirements like aircraft and helipads, they also need to get the personnel in place to fly the aircraft and provide emergency services. Each helicopter flies with two pilots, a flight nurse and flight paramedic. About one-quarter of the time, a flight referral emergency physician also joins the flight. The current Saskatchewan dispatch system will evolve to include a single dispatch for ground, helicopter and fixed wing ambulances, according to Gantefoer. ɸ Page A7

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STARSâ&#x20AC;&#x2122; roots found in Vietnam Â&#x201E; By Brian Zinchuk Calgary - The origins of Albertaâ&#x20AC;&#x2122;s STARS (Shock Trauma Air Rescue Society) program are found in the Vietnam War. Dr. Greg Powell, then early in his medical career, was on his way to a ďŹ&#x201A;ying doctors program in Australia when he was asked by the Canadian Embassy to go into Vietnam as an observer. There, he got to work in a real live mobile army surgical hospital (MASH), seeing how wounded soldiers brought back by helicopter had their lives saved. â&#x20AC;&#x153;I saw the amazing things that could be done to ďŹ x them up,â&#x20AC;? he said. Powell would go on to found STARS, and is still its president and CEO. The STARS service was established in Calgary in 1985. â&#x20AC;&#x153;I was head of Foothills emergency at the time,â&#x20AC;? he said of the major Calgary hospital. Thereâ&#x20AC;&#x2122;s a diďŹ&#x20AC;erence between what the air ambulance sees and what was in Vietnam. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re not shooting at each other,â&#x20AC;? he said. They

see a lot of heart attacks and strokes, as well as trauma. â&#x20AC;&#x153;If you move quickly on them, you can change the course of the disease,â&#x20AC;? he said. Otherwise, they may perish, or have very expensive rehabilitation costs. Speedy access to treatment by helicopter can actually reduce costs by avoiding rehabilitation costs. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve got a three hour window in a stroke to make a diďŹ&#x20AC;erence,â&#x20AC;? he said. In general, about half of STARSâ&#x20AC;&#x2122; cases are medical, the other half are surgical/trauma. Pediatrics makes up a small component of both. Transfers between intensive care units are a major thing, he said. In Alberta, there is a system of designated landing zones for air ambulances. STARS maintains a program called Emergency Link that keeps track of locations and known facilities and capabilities in the area, including ground ambulance. Companies pay a nominal fee each day to be part of the system. â&#x20AC;&#x153;I

Éş Page A6 Fundraising The program will cost about $16 to $17 million per year. The province has committed just under $10 million. That still leaves a substantial chunk of money, about $4 to $5 million dollars after the Crescent Point donation, to be raised on an annual basis. Thatâ&#x20AC;&#x2122;s more than the $4 million Telemiracle raised in 2010. The balance is expected to come from corporate and community donations, such as from the oil and gas and mining sectors, which he said were â&#x20AC;&#x153;robust.â&#x20AC;? Gantefoer said in Alberta, about three-quarters

of STARSâ&#x20AC;&#x2122; budge is fundraised. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re going to be funding over half initially,â&#x20AC;? he said, projecting the role of government will slowly diminish in time as donations pick up. Stangl said as lead sponsor, Crescent Point will play a major role trying to convince other companies and industries to play a role in supporting the service. Asked if the funding goal was achievable, he re- Dr. Greg Powell, STARSâ&#x20AC;&#x2122; founder, was Ă&#x20AC;rst exsponded, â&#x20AC;&#x153;I think so, no question.â&#x20AC;? posed to air ambulance service during the Vietâ&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s lots of work that needs to be done,â&#x20AC;? nam War. Stangl said. Photo by Mark Mennie/STARS

suspect we will see the same in Saskatchewan,â&#x20AC;? Powell said. â&#x20AC;&#x153;A lot of companies will phone us and prearrange for us to monitor that site.â&#x20AC;? When a call comes in, say for Site 456, they can plug it into the computer and be ready to go. Night missions are a regular part of STARSâ&#x20AC;&#x2122; 24/7 operation, with each pilot trained on the proper use of night-vision goggles. All captains have a minimum of 3,000 ďŹ&#x201A;ight hours before they start with STARS, but on top of that, they receive a full day of ground school with night-vision goggles, which includes a simulator class. Every mission has two pilots to increase safety. On the web: www.stars.ca

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PTRC: Research to push the peak forward

The Petroleum Technology Reserch Centre is located on the University of Regina campus. Photo by Brian Zinchuk

By Brian Zinchuk Regina - Peak oil, at least from a Canadian perspective, has always been a ﬂuid and diﬃcult thing to pin down – for the simple reason that much of Western Canada’s reserves are bitumen and heavy oil deposits, which do not act, in their extraction and “peak,” like light and medium oil deposits, according to Norm Sacuta, communications manager with the

Petroleum Technology Research Centre in Regina. “When M. King Hubbert ﬁrst created and employed the model to predict peak oil in the 1950s, he based his model on the idea that any individual oilﬁeld performs the same way – production increases steadily, and in some case exponentially, until peak

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extraction is reached. The field then drops off dramatically in production. Extrapolating this behaviour to the whole planet implied that supply and demand gurus could accurately predict when the maximum peak would be reached for global oil production, and how quickly that peak would trail off (even including such things as new oilfield discoveries),” Sacuta said. “However, technology moves in strange ways, and what’s been discovered in the past 20 or 30 years is that the exponential rise and fall of production at many oilfields can be interrupted and reversed with improvements in technologies (such as water flooding, use of solvent extraction techniques, thermal extraction methods, and horizontal drilling),” he said. “Indeed, some of those technologies, such as steam-assisted gravity drainage (SAGD), opened up a whole new set of reserves. It was just ten years ago that oil industry experts considered Alberta’ s oil sands to contain only eight billion barrels of actual reserves. That changed with the advent of SAGD and other thermal technologies, such that the United States Department of Energy and international groups like the International Energy Agency now consider the oilsands to hold 170 billion barrels of recoverable reserves. What has that fact done to the notion of ‘peak oil?’” Sacuta said, “The PTRC in Regina is committed to helping the Saskatchewan and Canadian oil industry increase its recovery rates from existing, producing reservoirs by developing new technologies that will lessen the environmental footprint of the industry while also increasing recovery. Right now, a good return from a heavy oil reservoir in the province of Saskatchewan is between eight and 10 per cent of the oil in place. Conventional oilfields, worldwide, often recover no more than 30 per cent of the oil in place. By developing technologies to increase these recovery rates, the peak oil curve is going to be pushed continually forward.” ɸ Page A9

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Enhanced oil recovery delays peak production ɺ Page A8 Sacuta pointed to the Midway-Sunset oilfield near Bakersfield, California. Discovered in 1894, it is the largest oilfield in California and one of the largest in the United States. The field is so prolific, it produced the largest gusher in United States history in 1910-11. The Lakeview #1 gusher spilled almost twice as much oil as the recent Deepwater Horizon spill. That field is still producing today, 116 years after the initial discovery. Enhanced oil recovery techniques, including steamflooding, cyclic steam, and fireflooding, in addition to waterflooding, have brought its total production to close to three billion barrels, with approximately 532 milllion barrels remaining. “The PTRC, through its Sustainable Technologies for Energy Production Systems (a recently inaugurated Business-led Network of Centres of Excellence by the federal government), is seeking to increase the recovery from Saskatchewan’s heavy oil deposits from the (on average) eight per cent to as much as 20 per cent through new research and development. This could mean a doubling of the oil recovered from Saskatchewan’s estimated 20.4 billion barrels in heavy reserves,” Sacuta said. (See pie chart graph) Sacuta pointed to the Weyburn field, in particular, as a stellar example where Hubbert’s peak oil trend has been reversed. The Weyburn and Midale fields are better known for the CO2 monitoring and storage project that has been ongoing there for 10 years, but the Weyburn field, operated by Cenovus, is most importantly an enhanced oil recovery operation. The oil in Weyburn is not heavy, but rather a medium crude, but with oilfield production down to just 8,000 bpd in the mid 1980s, successive technology improvements helped increase production until CO2 started be injected in 2000. The oilfield is now producing as many barrels of oil per day (close to 30,000) as it did back in the mid-1960s. The PTRC’s main areas of focus on enhancing oil recovery have primarily focused on heavy oil into: Improving and extending reservoir life after standard cold flow production methods. This can include such cutting edge technologies as in-situ combustion (where a combustion front is maintained in the reservoir to help heat the oil up in the formation and cause it to flow to production wells). This type of fireflood-

ing has been used, for example, in the Midway Sunset oilfield in California, above, in the latter stages of its life. Improving Waterflooding: the most common method of increasing recovery from conventional oil fields – waterflooding – works simply by increasing pressures in the reservoir and sweeping the oil out. But the PTRC has extended waterflooding research into heavy oil formations. This presents challenges, which researchers at the Saskatchewan Research Council and the University of Regina’s Petroleum Engineering Department have been studying for the past ten years. Adding surfactants to waterfloods can sometimes help increase the amount of oil produced in the emulsions coming to the surface, and combining waterfloods with CO2 or other solvents can also increase production. SVX (solvent vapour extraction): Work on solvent extraction technologies has also been a main goal of the PTRC. Solvents – which can include propane, butane, CO2 and other compounds – tend to reduce the viscosity of the oil and help it to flow better to production wells. However, because these solvents can, in and of themselves, be valuable commodities, they are only an effective means of getting more oil out of the ground if they can be recovered as part of the increased oil production. Solvent recovery only is economic if the solvent comes back up with the recovered oil. The PTRC has been working on this issue for a considerable time, both in its enhanced oil recovery research, and in its recently completed JIVE ( Joint Implementation of Vapour Extraction) pilot projects with Nexen, CNRL and Husky, which were recently completed in the Lloydminster area of Saskatchewan/Alberta.

Correction

In the November edition of Pipeline News, we made an error in identifying one person in two photographs. On page C3 and C7, the woman identiﬁed is actually Debbi Chomiak, wife of Manitoba Minister of Innovation, Energy and Mines, not Petroleum Branch secretary Twila Jolly. We regret any confusion this may have caused.

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PIPELINE NEWS December 2010

Demand will command higher prices By Brian Zinchuk Regina – When people talk about peak oil, there is usually a reference to oil that’s relatively easy to get out of the ground. Regina’s HTC Purenergy, and its subsidiary, EHR Enhanced Hydrocarbon Recovery, spends much of it effort getting the more difficult oil out. Lionel Kambeitz is the CEO of HTC Purenergy, and he had a lot to offer when asked by Pipeline News about peak oil theory, both for Saskatchewan and on a global scale. First, a primer. There are often three types of oil production commonly considered: primary production, where you put a pump in a well; secondary, where you will often use water to flood the well and produce more oil; and tertiary, which uses exotic techniques and technologies to squeeze yet more oil out of the well. It’s often referred to as enhanced oil recovery, or EOR. HTC’s and EHR’s efforts are around tertiary recovery, especially with the use of polymers and CO2. Asked about peak oil production and Saskatchewan, Kambeitz said, “I think we’re on a slight de-

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cline, with slightly less production year over year. Other onshore North American jurisdictions are in rapid decline.” That Saskatchewan has been able to maintain near-stable production numbers year over year is commendable, he noted. The natural tendency of all production is to decline. “I think the challenges in Saskatchewan, and an opportunity to keep the production line flat, or slightly the other way, is in the technology in the heavies,” he said of heavy crude oil. “The use of tertiary technology in the heavies will have the single largest impact in post prime production.” He pointed out that primary heavy oil production will see five to seven per cent recovery factors of original oil in place. “There’s a great opportunity to bring that to above 20 per cent recovery,” he said. “The emerging heavy secondary and tertiary technologies will be good for Saskatchewan.” Kambeitz pointed out 44 per cent of Saskatchewan’s oil is heavy. “Steam assisted gravity drainage (SAGD), optimized cyclic steam stimulation (CSS) and the utilization of CO2 in immiscible floods – these are now emerging in front of us,” he said. Saskatchewan is fortunate to have two heavy oil upgrading facilities, he said. “We understand how to manage heavy oil.” Kambeitz put in a plug for both the current and

previous provincial governments. “They’ve set the table with a feeling of stability. Investment likes predictability and stability. This government and the last one have done a very good job of delivering a message of stability of regime; that the playing field is going to be left the same.” Without that stability, producers chase primary production, but are more hesitant to invest into secondary and tertiary production, according to Kambeitz. Another factor in Saskatchewan, although not as large as heavy oil recovery improvements, is the access to carbon dioxide in southern Saskatchewan. “CO2 is capable of producing another 10 to 15 per cent of original oil in place – a substantial gain. I think that will have a significant effect.” He said a common ratio is five barrels of light or medium oil produced for every new tonne of CO2 injected in a CO2 flood. “If we can supply only two to three million tonnes per year, we have an opportunity to produce 10 to 15 million more barrels on an annual basis,” he said. In other words, that would roughly double the current amount of CO2 coming into Saskatchewan each day for use in the Apache Midale and Cenovus Weyburn fields. It would result in roughly 33,000 bpd increased production. Kambeitz said both SaskPower and North Dakota’s Basin Electric are looking at one million tonne a year CO2 capture projects to supply Saskatchewan and North Dakota oil fields. “Many other jurisdictions, in the U.S. in particular, have already implemented significant tertiary recovery. There are over 90 CO2 floods in the U.S. today.” ɸ Page A11

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A11

Lionel Kambeitz, CEO of HTC Purenergy, thinks growing demand for personal transportation will have an impact.

Going above and beyond to increase production ɺ Page A10 Looking at Wyoming for full tertiary polymer injection, one finds 80 such cases. But in Saskatchewan, there are only 10. “We have younger primary production here,” Kambeitz explained. Bakken Much of Saskatchewan’s new production in the last five years has come from the Bakken play. But Kambeitz pointed to rapid declines in primary production for Bakken wells. “We know there’s a significant amount of oil. We know it’s tight oil. We have to at least do secondary [production] in the Bakken. We also have to figure out how to do tertiary. We have to determine how to get more oil out of the Bakken.” “The technology of

finance is an equally important technology in the oil patch,” he said. Kambeitz noted the income trust model had worked well for Saskatchewan, with, as he puts it, “when we had limited men, money, and iron. “It chased primary production,” he added. “The income trust model was very beneficial to rapid primary production. The fastest production, and related revenue is still spudding a new hole.” Global On a global basis, Kambeitz feels the value of oil will increase as global production peaks, and then declines. “My personal opinion: the value we create from a barrel of oil, refining it to gasoline, is one of the great consumer bargains in the world. Will the consumer pay

more for gasoline? The answer is: they will.” Kambeitz said that there is a trend for countries in their development: electrification first, followed up by personal transportation. That’s being seen right now in China, India and Brazil, which he characterizes as emerging economies. “Only five to ten years ago, the people driving cars in China got electricity.” New cars going for as little as $2,500 like Indian automaker Tata’s Nano will have an impact. “When we look to that, what is that going to do for the price of a gallon of gasoline?” he said. “The barrier to entry is no longer a $35,000 GM, but a car every fourth family in China and India can afford.” “I believe in acceler-

ated demand for all energy products globally, we do not understand the power of waking economies, of emerging lifestyles. Close to ﬁve billion people in the world do not presently own or use engines for personal transportation and over two billion people do not have ready access to electricity. “I believe in peak oil theory. We are on the decline, globally, and we have a consumer rush for oil, that’s going to continue to be profound for next many years.” The global thirst for energy that is now being seen in electriﬁcation is spreading to gasoline to oil, he said. “We’re going to have demand.” Yet we have been “humbled by the oceans, and the Arctic,” he said, in reference to the Gulf of Mexico hurricanes and oil spill of past years.

“Are we at the limits of where we can go? What’s our ability to harvest all that oil from deep oceans and the Arctic?” A couple of solutions for oil in the next 10 to 20 years can be found in other forms of energy, he said, the prime one being significant improvements in natural gas-toliquids and coal to liquid fuel technologies and its use in personal transportation. The second will be in the “electrification of the wheel.” “That new battery, with the ability to store electricity in that battery, will take some pressure off traditional oil for transportation.” Climate change concerns have also been a call to accelerate development of non-fossil fuel technologies, according to Kambeitz. The world will slowly transition to a differ-

ent energy paradigm over the next 50 years, he forecasts “There are so many forms of energy – wind, solar, geothermal and biomass that will also replace some of the need for oil.”

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A12

PIPELINE NEWS December 2010

Salim Kadiwala, senior process engineer, and Chris Pelletier, project manager for HTC Purenergy of Regina, work on plans for a large carbon capture project in Italy. In the window, you can see the International Test Centre for CO2 Capture on the University of Regina campus.

Working globally on CO2 capture By Brian Zinchuk Regina - Regina-based HTC Purenergy, and its subsidiary EHR Enhanced Hydrocarbon Recovery, are starting to have an impact on the sophisticated world of enhanced oil recovery (EOR). “We’ve got some engagements. We’re very fortunate. Some of the sovereign oil companies of the world are looking at Saskatchewan,” said HTC CEO Lionel Kambeitz. He noted that on Nov. 18 and 19, executives from Pemex, the Mexican sovereign oil company, toured Weyburn’s Cenovus carbon dioxide flood. It was an introduction to secondary and tertiary recovery techniques for the Pemex people. HTC is allied with Cenovus with regards to the CO 2 technology, along with several other companies. “We’re in Abu Dhabai in January,” Kambeitz said. There they will be working on a project that has historically used natural gas as an agent for tertiary recovery. Now they are looking to use CO 2. The Gulf is starting to realize it doesn’t have infinite natural gas, Kambeitz noted. It is more useful to them for power production and desalination of sea water into fresh water. He pointed to the irony that the countries with the most energy in the world have the least water. “They are beginning to use those enhanced tools. They are just on the

cusp of using CO2,” he said. That carbon dioxide will be sourced from natural gas production, big refineries, and upgraders. In the back rooms, a team of engineers could be found designing a carbon capture project for Italian power producer Enel. The project is at Porto Tello, south of Venice. It is a large CO2 capture plant that will be incorporated into a power plant conversion. It is going from oil-fired to coal-fired. The project will capture about one million tonnes of CO2 per year, about the same size as SaskPower’s Boundary Dam 3 project. It is also similar in size to the Basin Electric project at Beulah, North Dakota, that HTC and its partner Doosan Babcock Energy are working on. The project will capture about 20 per cent of the carbon dioxide from the Enel plant. HTC has been working on CO2-based enhanced oil recovery for both heavy and light crudes, according to Kambeitz. “We were awarded a design package by the Alberta government with Devon. We’re working with other heavy oil producers as well,” he said. “We’re involved with several companies right on the cutting edge of using CO 2. The source of carbon dioxide may very well be the SAGD boilers used to generate the steam used in SAGD operations. That capture technology has also been developed by HTC.

PIPELINE NEWS December 2010

A13

Foreman Greg Appell directs the winch truck driver while positioning the rec hall of the new Weyburn House camp for PTI Group.

PTI Group sets up Day Weyburn House Construction Ltd. By Brian Zinchuk

Weyburn – PTI Group, Inc. has made its third foray into the southeast Saskatchewan/ southwest Manitoba market since last spring, setting up a camp on the west side of Weyburn. A crew could be found spending several weeks in November setting up the new Weyburn House, a 96-person camp with two dormitories, a rec hall and kitchen/dining area. The planned opening date was late November. It’s almost identical to the Waskada, Man., facility, according to Keith May, project manager for PTI. That is, at least, until the company doubled the size of Waskada Lodge to 200 beds this fall. It was opened in March 2010. Another 76-bed camp was set up in Redvers shortly after Waskada’s opened. The company also has a 168 room camp just across the U.S.-border at Stanley, N.D. It takes roughly two to three weeks to set up a camp, depending on site conditions, May said. “Roughly 29 truckloads come into that camp,” he said. On this

particular project, a picker was sent out to assist. Most of the work is done with winch trucks, but sometimes a picker is necessary, as was evidenced when the rec hall was being put into place on Nov. 9. Planking and blocks are used to keep the units level, but skid mats are used under the kitchen complex. The Weyburn location is at the intersection of Highways 39 and 13 on the west side of the city. It’s across the road from the Weyburn Co-op Crossroads Convenience Centre, and

adjacent to Southern Industrial and Truck. May said they have a ﬁve-acre lease, fully gravelled and packed on a base of pit run, with ﬁnish gravel on the parking areas. Swayze Concrete Ltd. of Weyburn did the work. ɸ Page A14

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PIPELINE NEWS December 2010

PTI opens third camp in region ɺ Page A13 Five men worked on the setup. Catering staff typically arrive just before a camp opens. Once up and running, the staff will run around four or five, according to May. Like its Redvers and Waskada Lodges, PTI’s Weyburn House will be an open camp,

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functioning much like a hotel. Clients can be drive-bys, single occupancy, or group contracts. “Just like a hotel,” May said. “Our consumables are mostly local, as much as we possibly can,” he said. That includes suppliers for water and propane. The camp will be completely self-contained on the lease, initially running on generator power. After that, they see what they can tie into, May explained.

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They’ve already talked to SaskPower, and an overhead power line can be seen running right to the edge of the lease. The idea is to get oﬀ generator power as quickly as possible, because it is one of the highest costs of such a facility. Chamber reacts While common in northern Alberta and British Columbia, such camps are a recent trend in southeast Saskatchewan and southwest Manitoba. It’s a

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response to an ongoing housing crunch in the region. ATCO opened a 200-bed camp in Estevan in early 2010 as well. PTI and ATCO have opened a combined 570 rooms in the region over the past year. It’s the equivalent of adding a small town the size of Arcola. “It’s important we build capacity. Hotels have a very low vacancy rate,” said Jeﬀ Richards, manager of the Weyburn Chamber of Commerce that was active in bringing the camp to Weyburn. “We worked pretty closely with them,” Richards said. “They came to us.” “We want to make sure we have capacity in the short term. I think we’re going to see a lot of activity all around Weyburn. As we become more centralized to more activity, you’ll see more using Wey- Assembling the steps for a dormitory is carpenburn as a home base.” ter apprentice Jason Best.

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A15

MacKenzie on lessons in leadership

Retired major general Lewis Mackenzie spoke of leadership by wandering about in his keynote presentation to the Enform Petroleum Safety Conference Prairies in Regina on Nov. 2.

By Brian Zinchuk Regina – Speaking about the challenges of being among the first peacekeepers in a Bosnia as civil war broke out, retired major general Lewis MacKenzie had the delegates enraptured in tales of real-life leadership under fire, and how that applies to them. Lewis was the keynote speaker for the Nov. 2 Enform Petroleum Safety Conference Prairies in Regina. “My definition of leadership is getting people to do what they don’t necessarily want to

do, and getting them to enjoy it,” he said. Good leaders are highly valued, especially if they are good managers as well, he implied. “Management is doing the thing right. Leadership is doing the right thing. If you have one with both, don’t let someone hire them away,” he said. “You can put a monkey in charge when it’s easy.” MacKenzie was on the ground in the former Yugoslavia as chaos overtook the country. Slovenia had declared independence, then Croatia. Bosnia was next. “It

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didn’t take a PhD to see a war coming.” Indeed, the officers there had a betting pool to see when the shooting would start. “Don’t ever be the last international agency to leave a town under fire. Under no circumstances get involved in a civil war with three sides.” “It’s easy to give up your pistol when a .50 cal is shoved in your face.” It was under these circumstances MacKenzie said he realized the “unbelievable power of television.” Fighters on all sides went to great lengths to make their point to the cameras. MacKenzie’s presentation spoke of practical, universal concepts in leadership. He started with, “Be yourself. “You have to motivate, inspire, convince them it’s the right thing to do. You can’t do that by screaming and yelling.” As a senior officer, MacKenzie made a point of having a senior non-commissioned officer drag him out of his office on a regular basis.

He called it “leadership by wandering about.” “You have no idea of the impact on a compliment of someone in your unit.” Listen, then you start paying attention. “If you give them credit for the idea publicly, they get credit, you get credit, and the organization gets better.” It’s important to get to know people’s interests outside of work. “What’s their passion? Most of us do other things. If you know that, that’s the window,” he said. “Morale is what my soldiers could brag about at the canteen.” You should know how much is enough to be competitive, but not so much as to break the back of the organization, he said. The example he gave was when French President Mitterand arrived on short notice in Sarajevo, and asked point blank what did he want for support. Lewis responded they needed 23 air support ﬂights a day. He got it. Much more, and they would not have been able to handle it, he pointed out. On courage, he said, “You have to create the

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PIPELINE NEWS December 2010

Penn West ponies up $250,000 for Waskada water project By Judy Wells Deloraine Times & Star Waskada, Man. – Penn West Energy has made a quarter million dollar contribution to a water project for the Village of Waskada, Man. “It’s a win-win situation,” said Tim Buchanan, senior production foreman, Manitoba with Penn West Energy. He was speaking of the recent business arrangement between his employer, Penn West Energy and the Village of Waskada. This arrangement centres around water. Recently, the Village of Waskada joined the Southwest Regional Water Co-operative Ltd. A water pipeline is currently being constructed to reach Waskada. There have been several concerns over the past few years about the quality of the water in Waskada, especially the high level of sodium. “There will be no need for bottled water any more this water coming is top quality right out of the tap,” said Debbie Temple, councillor for the RM of Brenda. Of course this delicious, safe water comes with a price tag. Every individual installation will cost $6,000. And this is where Penn West Energy comes in to play. Penn West requires a good, plentiful non-potable water source for its oil operations. Upon learning Waskada would be joining the water co-op, Penn West approached the Village of Waskada with a business proposal. Their proposal is to help oﬀset the in-

From Left: Penn West senior production manager (Calgary) Cam King, Waskada Mayor Gary Williams, Penn West senior production foreman (Manitoba) Tim Buchanan, councillor Debbie Temple and councillor Keith Hannah gather for a quarter million dollar cheque presentation to the Village of Waskada.

stallation cost by one-third of the price at $2000 per installation or $250,000 in total. The Village of Waskada was very excited with this business proposal and accepted. Two Penn West Energy representatives, including Buchanan and Cam King, senior production manager (Calgary) met with Village of Waskada council on Oct. 25 to present the funds. “Penn West sees this as a mutually beneﬁcial, innovative business arrangement to oﬀset the cost of

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PIPELINE NEWS December 2010

Technology increases recovery factors

By Brian Zinchuk Technology has played a major role in keeping Saskatchewan’s oil production stable over the past decade. One of the leading companies in providing that technology has been Packers Plus, whose StackFRAC system was a key innovation in the development of the Bakken play. Pipeline News asked Doug Bobrosky, Canadian business unit director of Packers Plus, about the role of technology in increasing production, and his thoughts on peak oil. Q: What is the role of new technology in increasing and extending production of known reserves? A: Using the Bakken as an example, it was discovered the same time as the giant Cardium field in Alberta. The Cardium had conglomeratic zone which allowed the oil to be produced. The Bakken had significant oil in place, but no technology at the time was available to allow the oil to flow out of the formation at economic quantities. Technology was the enabler. In Alberta, the tar sands have been known about since the early explorers, however, it was only in the last 15 years were we have been able to economically produce this oil through the advent of SAGD. Technology will continue to push uneconomical formation into economical formation. Q: What role has Packers Plus played in that, specifically in Saskatchewan’s Bakken play? A: We provided solutions early on to two of the early players in the Bakken. Both of the companies are now the leading drillers and producers in the area. Q: Can improved completion techniques substantially increase recovery factors? Howso?

A: The industry’s understanding of the unconventional reservoirs is not at the same level as conventional reservoirs that have been drilled for the last 100 years. Overall, we are continuing to learn and apply new ideas. When you consider for most reservoirs recovery factors are quite low, eight to 15 per cent, we are leaving a sizable volume of oil behind. Improved completion techniques will continue to push recovery factors higher. Q: What is the next big thing? A: Great questions. We see that a some of wells that have been fracked in the last three years have production rates that are signiﬁcantly lower than initial ﬁrst year production rates. What can the industry do to re-charge these wells to bring back production? Currently most ideas surround re-fracking the

wells or implementing some sort of water/gas ﬂood. We at Packers Plus are in the process of developing techniques to economically do both of these on both wells we have worked and wells that have been cemented in. Q: Have horizontal, multi-stage frac technologies been adopted throughout the world, i.e. in the Middle East and Russia? What sort of impact will that have on global production? A: Internationally the reservoirs that are being drilled are typically of higher quality than North America, however we have installed systems in the Middle East, Europe, Asia, Latin America to name a few. It will continue to expand as the better reservoirs play out and new zones are targeted. ɸ Page A18

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PIPELINE NEWS December 2010

What is the next big thing in completions? ɺ Page A17 How does the idea of peak production impact a company like Packers Plus? Does it mean your product will be in more demand as companies seek to extract as much as possible through reentering old wells and ﬁelds? In my mind, peak oil is real. Oil is not a re-

newable resource like forestry. It takes a lot longer to generate oil and gas in the ground. We are going to run out at some point in the future. Technology allows us to continue adding reserves back, delaying the day of decline. Tying back to the Cardium example from above, much of the

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drilli n g going on is around the original ﬁeld, a halo, if you will. Operators are looking at rock that was not deemed high enough quality to be drilled and exploited, and now for the ﬁrst time are now being economically drilled and produced. Q: Will there be even higher demand for advanced completion technologies if, and when, the world sees an eventual decline in global production? Or will technologies like yours push that eventu-

al decline oﬀ for many years to come? A: It is simple economics as the resource gets harder to ﬁnd, prices go up. With higher prices for t h e

comm o d ity, operators will spend more money to get the resource out of the ground. The price for oil is good right now and makes a lot of the current plays economical. Our technology allows for better stimulation and production from a reservoir so we believe the technology will be around for a long time. Our strategy

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Packer Plus StackFRAC system has had a major impact on increasing recovery in the Bakken play. Graphic submitted

PIPELINE NEWS December 2010

A19

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PIPELINE NEWS December 2010

Shortcuts can be fatal Estevan – If you allow little things to get by on the safety front, they can have disastrous consequences down the road. That was part of the message given by former astronaut Col. Mike Mullane, now retired. Now an author and speaker, he used to be a backseater in U. S. Air Force fighter bombers before becoming an astronaut. The event was hosted by South East Regional College’s Energy Training Institute and Enbridge, and acted as a fundraiser for the building project. It took place on Sept. 30 at the Estevan Beefeater Plaza. Mullane was a West Point graduate and Vietnam War veteran before joining the astronaut program. He hit on three “safety fundamentals,” in his presentation. The failure of following these resulted in two tragedies – the loss of the space shuttle Challenger in 1986, and space shuttle Columbia in 2003. “Four of my astronaut classmates were killed on Challenger,” he said. He flew on the space shuttle both before and after the Challenger disaster. Deviance The first fundamental, and the focus of much of the presentation, was “normalization of deviance,” or more simply, letting shortcuts become the norm. ɸ Page A21

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Don’t be a safety passenger ɺ Page A20 Mullane spoke of the natural tendency to take shortcuts. An example he gave was not having time to dress in personal protective equipment, or having done a task a thousand times. Not using tagouts or seat belts were other examples. This immediately forms a false feedback, he said. “The absence of something bad happening when deviance is accepted means it is safe to do. The shortcut becomes the norm. “It leads to predictable surprises,” he said, noting those can be injurious, or deadly. “Challenger was no accident. It was a predictable surprise,” Mullane said. With the Apollo program, the standard was “We are ‘No go’ for launch until it is safe to do so.” With the shuttle, that became “We are ‘Go’ for launch unless you prove it is unsafe to go.” The Achilles heel of Challenger was the O-rings in the solid rocket boosters. They were never designed to be touched by the ﬁre inside the rocket. Initial ﬂights revealed that they were indeed being

scorched, but since nothing bad happened, it was accepted as OK. “On 14 of 24 missions before STS 25 (the mission Challenger blew up), O-rings were touched by fire,” he said. A February 1984 memo, two years before the Challenger explosion, predicted it. NASA was ramping up to a plan of 26 shuttle flights a year, and not much was going to stand it its way, even safety, according to Mullane. “That business model became our guide.” “There was always a rationalization. They tested a damaged O-ring and it didn’t fail. They now accepted something that was never expected and not understood.” Faced with data that should have grounded the shuttle, instead NASA sought other data to justify continued flight operations. False feedback came from it, and the result was a worst nightmare for a multi-billion dollar program. Mullane outlined lines of defence. First, recognize your vulnerability. Second, plan the work, and work the plan. Have clear standards. Never execute a plan blindly. Think ahead. “A changing envi-

ronment can invalidate a plan. Think back to why safety practices were established in the first place.” He pointed out that the flight manual, essentially the plan, for a modern aircraft “is written in blood.” “How come there’s never time to do it right, but always time to do it over?” he asked. He pointed to the Deepwater Horizon explosion and oil spill in the Gulf of Mexico this past year, noting it was “a push to pick up production and pick up the pace.” Mullane said there are typically three balls in the air – budget, schedule, and the risk and safety factor. Make sure budget and schedule don’t erase the risk and safety factor, he said. “Surprises on the job in hazardous environments can lead to injury and death.” Listen to people closest to the issue, he stressed. Thiokol engineers warned NASA about Challenger’s Orings hours before the launch. “Columbia was a repeat of normalization of deviance,” he said. Foam came off the external tank on every mission. As time moved

on, the lessons of Challenger faded. Responsibility Responsibility was the second fundamental Mullane spoke of. He had a lot of experience as a backseater on F-4 Phantom fighterbombers. However, one day he was going up in a different type of aircraft. Mullane was on one of his first flights in an F-111 with a highly experienced pilot of that type of aircraft. He gave the pilot the “bingo fuel” warning, meaning that they had just enough fuel to get back to base. The pilot ignored it. The plane crashed on landing, and they had

to eject just seconds before. “We ran out of gas,” he said. “I ceased to be a team member, and I transferred responsibility to him. The pilot had position and longevity. I became a safety passenger.” A reluctance to confront, need for acceptance, fear of rejection, friendship, all work to turn someone into a “safety passenger,” he explained. Fear of the boss, and “it’s not my job” are other factors. There is a sacred responsibility to never be a passenger, according to Mullane. “Maintain your safety presence at

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all times.” Leaders should empower their teams, and not constrain people in their thinking. “Silence is consent,” he said. The ﬁnal tenet of his presentation was courageous self-leadership. Mullane said you should expand your performance envelope. “Tenacity, folks, it counts a lot. “It takes guts to challenge ourselves.” To that end, he said one should take in continuous education for your whole life. “Safety isn’t a ﬁnal destination. It’s a continuous life journey,” Mullane concluded.

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A22

PIPELINE NEWS December 2010

CO2 monitoring strategies pursued Editor’s note: This month Pipeline News invited submissions from leading Saskatchewan research institutes and academics on topic of peak oil and Saskatchewan. This is the submission of Joe Ralko, manager of corporate communications for the International Performance Assessment Centre for CO2 (IPAC-CO2), located on the University of Regina campus. By Joe Ralko IPAC-CO2 Regina - Hubbert’s Peak Oil Curve and Simmon’s Depletion Analysis along with other oil supply predictions need to be viewed within this context not all oil was created equally. For the most part,

reserves of easily-accessible conventional light sweet oil are producing. The probability of finding a hereto now unknown on-shore resource of WTI quality is very low. Clearly, reserves of this particular oil resource are depleting. However, what continues to grow is the amount of unconventional oil resources and associated recoverable reserves. By applying new technology, supplies of what were once inaccessible and unrecoverable oil have been added to the world’s potential resource account. And potential is the key word. These resources are: harder to access (offshore or remote) and more difficult to produce

(heavier and often sour), which means the oil is more expensive to bring to market. So, while the world may have less conventional oil, it has a large amount of unconventional oil upon which to draw. This is likely where the world’s supply of oil will come from. The problem with these new oil reserves is that they are more expensive to develop in both economic and environmental terms. The development of unconventional resources, by nature of the remote locations, has the potential for increased direct environmental impacts. Location, along with nature of oil, heavy and sour, dictates that this

oil has a higher indirect environmental cost too. That’s because it takes more energy to recover and process this type of oil. Therefore, on a per barrel basis the amount of carbon dioxide emitted is higher for unconventional oil than conventional oil. It is not so much the actual supply of oil that is of concern since we are assured that there is more than enough oil available but at a higher cost. What is most likely is that the supply of acceptable oil will be more of a factor in the future use of oil than will be the actual supply of oil. With the increased concern around the emissions of greenhouse gases associated with

the use of fossil fuels it is important that in order to retain the social licence to operate the future production of oil reserves will have to undertaken in a responsible manner. This will include reduced emissions of greenhouse gases. However, coal, natural gas and oil will remain the world’s dominant sources of energy over the next several decades adding to global greenhouse gas emissions. On a global scale, about 31 billion tons of CO2 are emitted per year into the atmosphere. The International Energy Agency (IEA) has urged a quick and global push to develop and deploy carbon capture and storage (CCS)

technologies to mitigate those greenhouse gas emissions. CCS is a process consisting of the separation of CO2 from industrial and energy-related sources, transport to a storage location and long-term isolation from the atmosphere. Scientists estimate carbon capture units on stationary sources such as coal-fired generating stations, refineries, upgraders and cement plants can be used to reduce emissions by 85 to 95 per cent. A top priority for storage research is the confirmation that CCS is a safe, reliable and environmentally beneficial practice for long-term CO2 storage. IPAC-CO2, an independent, not-for-profit organization, was designed to fill that specific need in the CCS chain. ɸ Page A23

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A23

Not all oil created equally

Dezirae Franke, left, picks up some pointers from her dad Randy Franke during Take Your Kid to Work day on Nov. 3.

More than just cleaning windows Estevan – Estevan Comprehensive School Grade 9 student Dezirae Franke got to cut class on Nov. 3, but it wasn’t to hang out at a coffee shop or shoot pool. “I washed windows on the loader,” she said, just prior to striking her first arc with a welder. “I worked on the plasma cutter. I was cutting rods on the iron worker.” It was Take Your Kid to Work day, when Grade 9 students throughout the country fan out to tag along with mom or dad for a day. However, there was not a lot new for Dezirae, as she can often be found at her father Randy Franke’s shop. Randy Franke is a co-owner of KRJ Custom Fabricating, located just east of Estevan. She helps out during the summer and at other times. But for part-time work, she’s more interested in signing on as a lifeguard as opposed to working in the shop. She’s been doing synchronized swimming for nine years. “This is a fallback, a good thing to know,” Randy noted, speaking of some basic skills he had been showing her, like using a grinder or reading a tape measure. Asked if there might be any interest in having Dezirae join the family firm for a career, Randy joked, “She better have a really good job so I can retire early and visit her.” Dezirae, 14, is the second of three children. She has a 17-year-old sister, Tory, and a 13-year-old brother, Roark. When she’s not swimming or going to school, you’ll find her on her dirt bike, racing competitively. She has ridden all her life. Dezirae also played on the ECS soccer team this year.

ɺ Page A22 “We exist to help organizations identify and manage the risk associated with storing carbon dioxide in the ground,” said Carmen Dybwad, who left her left her position as vice-president of the Canadian Energy Research Institute (CERI) to become CEO of IPAC-CO2. Prior to joining CERI in 2009, she was president of the Energy Council of Canada for two years and also served a seven-year term on the National Energy Board. IPAC-CO2’s work developing Canada’s first standard for the geologic storage of carbon dioxide with the Canadian Standards Association (CSA) was one of its most important initiatives this year. Today, there are no formally-recognized national or international standards for the capture and longterm storage of CO2. “Standards are the foundation for all the risk work that needs to be done relating to geologic storage of carbon dioxide,” explained Dybwad. “This is one small but very important step for us to gain public and regulator confidence in the geological storage of CO2 as a sustainable energy and environmental option.” Upon completion, the new CCS storage standard will be submitted to both ANSI in the United States and the Standards Council of Canada for recognition, making it the world’s first, formally-recognized CCS standard in this area. The new standard will then be used as a basis for the promotion of international standards through the International Standards Organization (ISO) by 2012. A technical committee of more than two dozen experts from academia, industry, environmental NGOs and regulators in both countries have begun reviewing the draft storage standard. IPAC-CO2 was established in 2009 with $14 million in funding from the government of Saskatchewan, Royal Dutch Shell and the government of Canada. Since then, it has established a global network with regional centres in Africa, Australia, Brazil, Canada, China, Europe and the United States. In addition, IPAC-CO2 has launched the first on-line Community of Practice for the CCS industry.

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PIPELINE NEWS December 2010

A relentless pursuit of zero Regina. – “What do you do for safety? ‘I wear my gloves and watch out.’ It’s not enough.” Those were the words of Mike Williamsen as he spoke at the Enform Petroleum Safety Conference Prairies in Regina on Nov. 2. “You can’t be a lone ranger or an isolated resource. You can’t be just a check in the box,” he told the assembled safety professionals. Speaking of incidents, he noted, “The overwhelming majority are caused by, for the most part, at-risk behaviour. “The at-risk behaviours come from the attitudes and ideas at the workplace.” Pressure to perform is an issue. “It doesn’t take new employees long to ﬁgure out what the norms are based on your culture. Our culture builds in risks, and our people live in that cul-

ture.” Williamsen spoke of regulations “written in blood.” “I don’t like nearmiss programming. I like near-miss resolution,” he said. He added that a near-miss should be closed within three to ﬁve business days. “They see it, they ﬁx it, and they move on.” Williamsen spoke of his experience looking after safety at a large munitions depot that had a horrible safety record, often drawing on examples from that work. By incorporating many of these measures, they took a situation that had injuries on a regular basis to almost no losttime incidents. Williamsen outlined several levels of safety thinking. Level 1 is reacting, including compliance programs, work orders, incident reports and the like.

The system is flexible to accommodate the site culture. Finally, the safety system is positively perceived by the workforce. “All the studies show more money doesn’t make you any safer,” Williamsen said. One way of focusing on safety is to use small groups of people to work on problems they know exist. He stressed you should ask for volunteers, not make assignments. Typically, you Mike Williamsen said “Zero is the only acceptable might get five to 10 per cent stepping up. number” when it comes to safety incidents. Photo by Brian Zinchuk Those teams should be chartered by upLevel 2 is what we Level 5, he said, is per management with see – observation pro- how do we fix what we a purpose, outcome and grams, job safety analy- know isn’t right? process. Outcomes must sis, and near miss reportThen at Level 6 you be measurable, he said. ing. find “how do we lead?” “This risk must disapAt Level 3 – what People at this level de- pear from our workforce, we do – there are safety velop a passion to fix ev- and never come back.” accountability systems. erything else. Williamsen spoke of What we believe is Moving up the chain “traps,” saying, “A trap is Level 4. That is opera- means whereas once something that’s wrong tions-based, and cultural a complaint meant a with safety. Sometimes reality. grievance, now it means at midday, or late in the a goal. day, or the probability Several times dur- chart runs out, your peoing his presentation ple step in them.” Williamsen credited the An “action item malate Dan Petersen from trix” charts out safety coming up with many of items to be addressed, these concepts. One set before they become inci• SALES was six criteria for safety dents. In the munitions • SERVICE excellence. plant, they addressed • PARTS Top management is 600. Production went • LEASING visibly committed was up, and injuries plumGenset Servicing the first. Middle man- meted. Available agement is actively in“You need a metric volved. Supervision is beyond injury rates,” he performance-focused. explained. Estevan - 89 Escana Street • 637-2121 Hourly employees are “It’s all about singles, Toll Free: 1-866-332-2121 Saskatoon • Regina • Winnipeg active participants.

not home runs.” Safety accountability has to include all employees, from the hourly workers, to the supervisor and vice-president. “I have to be responsible no matter where I am in the organization.” In workforces, Williamsen described the extremes in attitudes. About five per cent are positive. The opposite end of the spectrum is what he called CAVEmen – citizens against virtually everything. “If your five per cent negatives have an upper hand, you have a miserable condition.” Sometimes, there are obstacles you have to get rid of. He told the story of the one person he had fired, a 24-year veteran who made life miserable for everyone else. “From a character process, there are no free passes. Confront the brutal facts. We’re not walking around this trap. We’re disarming this trap,” Williamsen said. On management style, he said you should end X-theory management, which has the basic tenet that people are rotten, and you have to stand on them. In contrast, Y-theory management believes that people are good, and should be treated well. Z-theory management suggests engaging people as a team, and is in the Japanese style. “Zero is the only acceptable number,” Williamsen said of incidents. “But if you say that only once a year, at a safety banquet, that’s not enough.

Especially for You Thanks for giving us so much joy this past year.

2010 Weybex Award Winner

Trucking Estevan Ltd.

88 Devonian Street, Estevan, SK. Ph: 634-4041 (24 hr) Fax: 634-4040

PIPELINE NEWS December 2010

A25

Shifting gears in life and on the road Shifting Gears

One Woman’s Perspective on Life, Liberty and the Pursuit of Land Locations By Nadine Elson Three years ago, I turned pro. Shifting gears, after years out of the work force, I enrolled in truck driver training. I was well qualiﬁed for a driving career though. I had years of driving my minivan full of kids, dogs and sports equipment to countless hockey games, practices, archery and dance lessons and recitals. After two weeks of truck driver training, I took the test, and passed on the ﬁrst try. This was in spite of the fact that I had never even viewed the inside of the cab of a

big rig prior to the start of training. The decision to take the truck driver training started oﬀ as a small idea that simply picked up speed. My youngest was poised to enter Grade 9 at the local high school. He had been home schooled from Grade 1 through 8. My job, albeit unpaid, was over. Shifting gears from home to work was necessary in order to help with the ﬁnancial challenges of the road ahead. We had two kids who would be enrolled in post-secondary

schooling in a few short years. How to help with the family ﬁnances? University-educated and business-oriented, I had owned both service and retail businesses. I did not want to buy or start a business again, though. Yet, perusing the local papers for job openings, I noted that there were no jobs advertised for someone with my skill set. There were lots for truck drivers, though. It was time to change the skill set. My high school yearbook caption could easily have said, “Least likely to become a truck driver!” But driving has always been important to me. When I turned

16, I took my driver’s test in a blizzard on the ﬁrst business day that SGI was open after my birthday. The test was merely a formality though, and failure was not an option. I had been driving on the family farm since I had turned 12. As a teenager, I translated my love of driving into great jobs. In my Grade 10 year, I drove the delivery van after school and Saturdays for a local ﬂorist. This experience led to my dream job in my Grade 11 and 12 years of driving the delivery van for a dry-cleaning business. It was a dream job because it embodied being paid to drive, working with great people, work-

ing great hours, and, last but not least, free drycleaning. Life has a way of coming full circle. Many years after my high school driving jobs and with my own child now in high school, I am again being paid to drive. Instead of my minivan, I now drive a Ram 4500 truck coupled with a 35 foot trailer with a 20,000 pound capacity. I drive for a company that delivers tools and equipment to the oilﬁeld. It is a kind of courier service for the oil patch. I again have a dream job. I am being paid to drive, and I can use my many customer service skills honed through years of owning busi-

nesses. I meet great people in the patch and I have a great boss. Best of all, I work when there’s work and I am at home when there is not. And to overhear my son brag that his mom has a better licence than his dad, well that’s just sweet. While I have often been audacious and bold, until recently, I have never thought of myself as a hot shot. Yet I am! A hot shot driver, that is. What a Hot Shot! Nadine Elson lives in Estevan with her husband and family. Her mission, beyond delivering the goods quickly, is to have every interaction be a positive one. Smiles are free. Elson can be reached at missiondriver@hotmail.ca.

At Prairie Land... • Land Acquisitions • Freehold Mineral Specialists • Surface Acquisitions • Pipeline Right-of-Way • Rental Reviews • Damage Settlements • Seismic Permitting • Crown Sale Attendance • Title Registration...

Happy Holidays!

Prairie Land

Thank you for your support all year long.

& Investment Services Ltd.

Season’s Greetings

Saskatchewan & Manitoba’s Freehold Mineral Specialist

From our team to yours, go our very best wishes and heartfelt gratitude.

Don Pontius • Terry Jordan

Ph: (306) 634-4797 or 634-7334

Toll Free: 1-800-667-8025 • Fax: (306) 586-7669

Regina Office: (306) 757-5600 200, 2629 - 29th Avenue Regina, Saskatchewan S4S 2N9

DISTRIBUTION INC. 315A Kensington Ave., Estevan, SK (306) 634-2835 Fax (306) 634-2797 40B 18th Street, N. E., Weyburn Ph: (306) 842-5081 Fax: (306) 842-5309 www.apexdistribution.com

Swift Current: 1-800-667-8025 eml.postofÀce@prairie-land.com www.prairie-land.com

We Place Our Clients First.

L & C Trucking Phone: 634-5519 or 634-7341 24 Hwy. 39 E. Estevan

• • • • •

GENERAL OILFIELD HAULING TANK & TREATER MOVING 24 HOUR PERSONALIZED SERVICE PIPE CUSTODIAN PUMP JACK HAULING

A26

PIPELINE NEWS December 2010

Helping out people in need Waskada, Man. – When Pipeline News stopped by to visit one of the two local gas stations in Waskada in early October, the owner didn’t

have time to talk. That’s because Kenneth Austin was running out the door to put out a ﬁre at the local dump. Austin is the local

ﬁre chief in Waskada, and has been “for more years than I can count,” he said. He joined the volunteer ﬁre department

Complete Rod Pumping Design, Supply, Optimization & Field Services - Specializing in Rod Pumping System Design—Directional, Horizontal & Vertical - Full line of API, High Strength Steel & Fiberglass Sucker Rods - Complete Dynamometer & Fluid Level Services including Optimization Proposals - Automation Services including SAM Well Managers, Wermac/Yaskawa VFDs, Xspoc Web Based SCADA Packages Phone: (306) 634-7399 Fax: (306) 634-6989 E-Mail: Estevan@pentarods.com 58 Devonian Street Estevan, Saskatchewan PO Box 667 S4A 2A6

Lyle:

(lhaukeness@pentarods.com) Cell: (306) 421-3682 Yvonne: (ysever@pentarods.com) Cell: (306) 421-5842 James: (jmilton@pentarods.com) Cell: (306) 421-6845

www.pentarods.com

in 1973. Kenneth L. Austin Petroleum Services is a small, independent operation in Waskada. “We’re totally independent,” Austin said. “We buy our fuel out of Regina.” They have a keylock fuel sales system, and also take cash sales. Most of the local people have a key, Austin explained. They also supply fuel to local oilpatch companies, including EOG Resources, Penn West and Spearing Service LP. In addition to fuel, they carry lubricants, batteries, antifreeze, cables, slings and other supplies. The company has been in business since 1973. Before the 1980s, Waskada was mostly an

agricultural community, Austin explained. “That’s all there was here. When oil came in, we had bulk fuel delivery. I was with Shell Oil back then.” The company has been connected with several suppliers over the years. They went independent in 1990, tied in with Esso, then became independent again in 2002. “In the 1980s, we were really busy. I was servicing up to 11 drilling rigs at one time,” he said. “When the bottom fell out of the market, they were gone.” It petered out in the late 1980s, he recalled. “It just came to a stop. All the services left. We just continued on with the ag business.” There were still op-

Have a COOL HOLIDAY!

TRUCKING

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erators of wells that needed fuel and supplies, however, even after the drilling stopped. Waskada is now in the midst of another boom. Over the past two years, Austin noted, “Sales have gone up almost four times, largely to service oilfield and pipelines.” That will disappear, he noted, but they will still have ongoing operations afterwards. “It’s all newfound business,” he said. Austin’s wife Dorothy helps out, and has since the get-go. “She’s my partner, does books, and the office,” he said. They also have a helper, Debbie Millard. “I enjoy what I do. I enjoy helping people. That’s why I’m a fire chief – helping people in need.”

455-2429

With Warm Wishes And many thanks to our friends and neighbors at Christmas.

321 Imperial Avenue, Estevan Phone: 306-634-5304 Fax: 306-634-5887 www.estevanmeter.com

Hope it’s ﬁlled with lots of love and laughter. Merry Christmas!

Girard Bulk Service Ltd. 134 4th Street, Estevan

637-4370 with

BRIGHT WISHES

Daylighting, Oilfield Hauling, Steaming & Mobile Pressure Washing, Winch, Pressure, Water & Vacuum Truck Services

Thank you for lighting up our year with your visits.

Office - Kola, MB. 204-556-2464 Dan O’Connor Operations Manager 204-748-5088

ESTEVAN, SK 306-634-8912

PIPELINE NEWS December 2010

A27

Peak oil in Sask.? Not in our lifetimes Calgary - Peak oil production for Saskatchewan is a long way off, according to Crescent Point Energy Corps.’s Trent Stangl. Stangl is the vice-president of marketing and investor relations for the company, which is has been the largest oil producer in southeast Saskatchewan for about five years. About 90 per cent of the company’s 70,000 boepd production comes from Saskatchewan. “Peak oil is almost a misnomer. In the last 20 years, people would have argued Saskatchewan is all explored, with no more growth to be had,” he said. Citing the company’s experience in the Bakken oil play, he said, “I don’t think we’re anywhere close to peak oil.” Crescent Point has seen its Saskatchewan production grow year-over-year, through both acquisitions and drilling. Stangl said this year they’ve grown over 10 per cent through the drill bit. The company began moving towards secondary recovery (a waterflood) in the Stoughton area, with the initial pilot beginning three years ago. “Even if we get this waterflood going the way we want, that’s only 30 per cent of recoverable oil,” he said, noting there would still be 70 per cent left. He pointed to Cenovus’ experience in the Weyburn field, where they are looking at recovery rates in the range of 50 per cent, using carbon dioxide flooding in addition to waterflooding. Saying that technology will open the recovery of existing fields and of new fields, Stangl projected, “I don’t think there’s any peak oil in your lifetime or mine in Saskatchewan.” He said Mission Oil’s original fracking technology opened up the Bakken. “Packers Plus came along and allowed us to double reserves on a per-well basis.” ɸ Page C28

Trent Stangl, president of marketing and investor relations for Crescent Point Energy Corps., says Saskatchewan was once thought to be Ànished for production growth, but that was not the case at all. Photo submitted

il’s h P

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Enform COR Certified Christmas Greetings Folks like you make it all worthwhile. Thanks!

Since 1967 321 Imperial Avenue, Estevan

lancew@aspentrailer.com • www.aspentrailer.com Aspen Custom Trailers [T] 403 236 2244 6017-84th Street S.E. [F] 403 236 8829 Calgary, AB T2C 4S1 [C] 403 813 6319 [Toll Free] 877 236 2244

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

www.estevanmeter.com

A28

PIPELINE NEWS December 2010

Peak oil for Sask. a long way off, says producer ɺ Page C27 Now the company uses mostly cemented liners, with better results, for similar costs. The lin-

ers are run and cemented all the way down to the end of the horizontal section of the well, and a cutting tool, at the end

of a coiled tubing unit, opens up perforations where desired. They can be done anywhere on the line, and it is possible to

come back and add more stages later. “We do eight to 16 generally. We stick to a single leg, as we feel it is more amenable to the waterﬂood.” One of the big advantages is that you don’t leave equipment downhole, Stangl said. “We’re the only company doing waterﬂood in the Bakken,” he explained. They have three years of data based on the initial pilot with a Packer Plus-type well.

Newer pilots are now in place with cemented liner wells. That should bring the recovery rate up to 30 per cent with secondary recovery from an expected 17 to 19 per cent using primary recovery. Asked if they are looking to use carbon dioxide ﬂood similar to Cenovus, Stangl responded, “Not at this time, no.” Waterﬂood is easier, he said, and requires less infrastructure. It also doesn’t preclude using

SURFACE BIT RENTAL QUALITY RERUN & RETIP 24 HR SERVICE

Stuck truck Some days just don’t go well. The driver of this truck spent a large part of the day shovelling out the load, by hand, while waiting to get pulled out. It was a wet day in mid-November in southeast Saskatchewan. Photo by Brian Zinchuk

CHAD FROESE

CELL: 306-421-3726 RES: 306-634-7538 OFFICE: 306-388-2941

CO2 in the future. Asked about the implications of a possible global peak in oil production, Stangl said, “If you can ﬁnd an expert that will tell you what’s going on in Saudi Arabia, you’ll have your answer. “Look at what shale gas did to the market. There is a possibility it could do that for oil,” he said. “Is multi-stage fracking applicable to Africa? To Russia?”

Thinking of You

It’s been a real treat serving you this past year.

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

Regina’s Newest All-Suite Hotel

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Suzanna Nostadt Vice President (306) 861-2315 For 24 hour emergency service call:

Francis Lessard Service Manager (306) 861-2841 Parts: (306) 842-6100

New 406 & 407 Stock Units on location 5 – 22nd Avenue S.E., Weyburn, Sask.

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When you can’t be there, Stay Close to Home. One Bedroom King Suites with full kitchens Double Queen Studio Suites with kitchenettes Complimentary HomeEssentials Breakfast 24-Hour Fitness and Business Centres Daily, weekly and monthly rates available 3841 Eastgate Drive Regina, Saskatchewan S4Z 1A5 Toll-free 1-877-522-4434

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™

PIPELINE NEWS December 2010

A29

In an effort to raise money for the Canadian Cancer Society, 12 women who work with Carson Energy Services of Lampman have posed for a second risqué calendar. Photo submitted

Girls from Carson raise money for Cancer Society Lampman – Last year’s calendar was such a success, the women of Carson Energy Services Ltd. have decided to do it again. “It was very successful. Because of its success, we are repeating it,” said Sarah Smyth, spokeswoman of the risqué, but tasteful Girls From Carson calendar. “Last year we raised over $27,000 through the calendar. “There were people asking us if another calendar was coming out. It goes to a good cause,” she said. The calendar is a fundraiser for the Canadian Cancer Society, and is part of the Carson Cancer Crushers’ Relay for Life fundraising efforts. “All the models work for Carsons,” Smyth said. They include admin and ﬁeld staﬀ. There were 12 models this year. Deidre Mack of Stoughton provided the photography.

HAPPY HOLLY DAYS Thank you for the gift of your friendship.

P.O. Box 160 Lampman, SK. S0C 1N0

Ph: 487-2281

“She’s our accountant,” Smyth said. It was shot in one full day. The calendars sell for $20 each, and will be available at all Carson’s locations, plus other businesses throughout southeast Saskatchewan. Only one printing of 1,000 copies is planned.

Tax-deductible donations are also accepted. The format this year will be diﬀerent than last year, and will follow a traditional calendar format. It will be available in early December. For more information, contact ssmyth@ carsonenergyser vices. com

TRUCKING

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With a round of best wishes to you and yours this holiday season. We appreciate your loyal patronage.

Phone: (306) 388-2652 Fax: (306) 388-2345 24 Hour Service

MIDALE 306•458•2811 midale@totaloilÀeld.ca

(A Division of Total Energy Services Ltd.)

CARLYLE Ph: 306•453•4401 Fax: 306•453•4402 carlyle@totaloilÀeld.ca

A30

PIPELINE NEWS December 2010

Move allows for expansion Cement mixer trucks are the core of Bill Vollbrecht’s A & B Concrete Ltd’s Áeet.

Weyburn – As often happens with real estate transactions, what was too small for one company is just right for another. When Weyburn’s Southern Industrial and Truck moved into new digs this year, it freed up one of their locations on the west

side of the city. That location was purchased by A & B Concrete, and has made owner Bill Vollbrecht quite happy. The company, in business since 2002, is now in a 5,000 sq.-ft. building, a ﬁve-fold increase in size from their

previous leased location on the other side of Weyburn. It means they can keep their ﬂeet of concrete mixer trucks indoors, and have some place warm and dry to work on them. The additional shop room meant Vollbrecht could hire a mechanic.

The adjacent office trailer also made for another welcome addition to the crew – a full-time admin person. “My office was my kitchen,” he said. The staff now numbers seven with the two recent additions. A & B made the

Photo by Brian Zinchuk

purchase over the past summer, and moved in in August. As Vollbrecht explained, they outgrew their old digs tremendously. “I was very happy over there. When this came up, it was a huge step for us. “So many things

OIL & GAS, CORPORATE & TRUSTS THOMAS A. SCHUCK Re-organizations Taxation of Mineral Holdings Mineral & Royalty Trusts Family Trusts & Joint Ventures Incorporation of Oil Field Companies

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www.nswb.com

Big enough to meet your needs; Small enough to care that we do!

Estevan Office: Phone: (306) 634-2681 Fax: (306) 636-7227

are better. We have triple the yard space. It allows us to store more material, more gravel product.” There’s an additional 2,200 sq-ft. building on the site. A & B doesn’t need it right now, so they are in the final stages of negotiating a lease for another business to move in. The core of the business is the fleet of five concrete mixer trucks, which allow for concrete to be mixed on site. They can handle small projects, but also big ones. The company’s biggest pour to date was the shop floor for Carson Energy Services in Halbrite. It involved four trucks and 150 cubic yards of concrete. ɸ Page A31

www.rapidrodservice.com

Double Flushby Rod Rig based out of Carlyle, SK

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Toll Free: 1-800-465-4273 www.badgerinc.com

PIPELINE NEWS December 2010

A31

Wouldn’t have it any other way

Having a shop to work in is a welcome improvement for Weyburn’s A & B Concrete Ltd. Here the Áeet of cement mixer trucks is now indoors, on a miserably rainy November day.

ɺ Page A30 “We had it done by noon,” he said. Typically, they run back to the shop to reﬁll. “We run back here, reload, and away we go. But we have the abilities to reload on site,” he said. The company does some work directly out in the oil patch, assisting Weyburn-based South Sask Rathole in setting conductor barrels. The rathole company now has its one concrete mixer truck, but they still call in A & B when needed.

“They were one of my first customers. They had one rig, one setup. They’ve grown since. We’ve grown along with them.” While Vollbrecht said it’s busy in the Lake Alma area, southwest of Weyburn, Stoughton is, “without a doubt, our busiest for oilfield.” Much of their work is spinoffs from the oilfield, especially shop floors and yards. They’ve done a number on the south side of Weyburn, as well as some recent work

for Aaron Well Servicing on the east side. Another project underway was for a 7,000 sq.-ft. shop in the Stoughton area. These projects can include everything from stripping topsoil to building roads and the concrete work. They have several trucks, excavators, payloaders and skid steer loaders for dirt work. A & B is a family aﬀair. Vollbrecht’s wife Karen used to do admin work in the early years, at the aforementioned kitchen table at night

Rest Easier

with him. She’s now the local manager of Weatherford’s testing operations. Their sons, 16-year old Derek and 15-year old Wyatt, both worked last summer, covering a wide variety of operations including running equipment. Entrepreneurial spirit Vollbrecht is a journeyman power lineman by trade. “I actually quit SaskPower to do this,” he said. He started in the power side working in the rural underground distribution program, or RUD. “I was on RUD for four years. I travelled the whole province, and got to know a lot of people,” he said. He started running a backhoe after picking up some experience with the Weyburn ﬁrm, Jerry Mainil Ltd. Eventually he took an apprenticeship as a lineman. One of his most interesting experiences was a decade ago when he saw an ice storm take out

WATER

one-third of the power poles between his home ten miles from Weyburn and the city. It took 56 hours of solid work to get things sorted out. The venture into concrete came because, “I just wanted to do something on my own,” he said. “It just presented itself, and I ran with it.” He partnered with a local person for a couple

Deck the

holiday greetings

halls!

With a round of best wishes to all our good friends at Christmas.

THANK YOU for visiting us this year!

Estevan Office: Phone: (306) 634-2681 Fax: (306) 636-7227

ENERGY

years, then bought the partner out. That’s when things really took oﬀ, Vollbrecht said. While there’s not much in the way of time oﬀ or the security of a steady Crown corporation job, Vollbrecht wouldn’t have it any other way. “I love working. The harder you work, the more you’re rewarded.”

Phone: 482-3244

RECOVERY

(The oil patch is looking better, but at the end of a long day this bed looks fantastic)

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A32

PIPELINE NEWS December 2010

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PIPELINE NEWS Saskatchewan’s Petroleum Monthly

w Ne

B-Section December 2010

V I S

U L C X E e ip

Everyone in the Cousins family, except for the mother Paulette, has their pilot’s licence. Greg, seen here, Áies a Cirrus SR22, which can make it to from Carnduff to Calgary in about three hours, handy for business meetings. Two of their three children, Paul and Mark, earned their pilot wings through the air cadet program. Lisa completed her private pilot program with John Erickson in Estevan. The family also has a two-seater American Champion Adventurer taildragger. They have their own lit landing strip near their home, across the road from Greg Cousins Construction Ltd.’s main yard.

Greg Cousins Construction Ltd. merges with Site Energy By Brian Zinchuk Carnduﬀ – After 33 years as an independent contractor, Greg Cousins Construction Ltd. merged with Site Energy Services on Nov. 1. The result will be a company that can now compete for the largest projects in southeast Saskatchewan, from plant construction to the largest pipelines excluding mainlines. Site Energy, itself, is a recent startup on a growing trend. Since Site incorporated in March 2010, it has absorbed Timberline Industries Inc. of Pierceland and Tri City Construction Ltd. of Cold Lake, Alta. It had even begun to set up operations in Weyburn this past year – operations that will now be part of the Greg Cousins Construction Ltd. (GCCL) division. Southeast Saskatchewan and southwest Manitoba operations will continue to operate under the Greg Cousins Construction Ltd. banner. PAC Rentals, a separate rental company aﬃliated

with GCCL that deals primarily in generator rentals, will also be included in the multi-million dollar stock and cash deal. Site Energy Services is backed by SCF Partners, a Houston/Calgary-based private equity ﬁrm. Site Energy is headquartered in Sherwood Park, Alta. Greg Cousins, 53, has owned and operated the company with his wife Paulette ever since he bought a Case 580 backhoe and 1968 Chevy gravel truck with a tag-axle. A Carnduﬀ product, Greg had gone to Saskatoon to study heavy mechanics at Kelsey, and worked for the Kenworth dealer, but found the big city not to be of his liking. “In 1975, when I got out of school, I wanted to get out of this little town. There was nothing going on. It didn’t take long to realize a small town is a good place to live and raise a family.” His father, who had worked with Producers Pipelines (forerunner to Enbridge) loaned him the

money for the first backhoe and truck. The operation is based on the former family farm. They still have farmland, but it’s seeded into hay. The first year in operation, Greg contracted to Borger Bros. of Winnipeg. He hauled asphalt into Carnduff. “That was the year they paved the streets in Carnduff,” he said. In the early 1980s, the old backhoe and gravel truck were replaced with newer models. “We started doing little projects that required more people in the early ’80s,” Greg said. Along the way, he did what almost everyone with a backhoe in a small town does – dug graves when needed. “That’s what you do,” he said. “You can’t say, ‘Can I do it the next day?’” Greg Cousins Construction Ltd. was incorporated in 1985. They went to the first Weyburn Oil Show, where they met their long-time accountant. ɸ Page B2

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PIPELINE NEWS December 2010

33 years building GCCL Éş Page B2 â&#x20AC;&#x153;It was an eye-opening experience for us that there was a lot of potential out there,â&#x20AC;? Greg said. They were doing maintenance of ďŹ&#x201A;ow lines at the time. GCCL expanded quite a bit in the early to mid80s, adding excavators and trucks. They had about 10 people working at the time. Greg was still active in the ďŹ eld, pulling levers as needed, until the mid-90s. The company has been on continual growth trend over the years. At the time of the merger, they had approximately 120 employees. â&#x20AC;&#x153;In our business, youâ&#x20AC;&#x2122;re either growing or youâ&#x20AC;&#x2122;re dying. Staying status quo in the oilďŹ eld doesnâ&#x20AC;&#x2122;t exist,â&#x20AC;? Greg said. There have been several lean times and when asked how they coped with the low years, Greg said, â&#x20AC;&#x153;Suck it up. You grow and grow and grow. The bottom drops out, you pull in your horns and do what it takes until the next opportunity.â&#x20AC;? Itâ&#x20AC;&#x2122;s happened a few times, he noted. Theyâ&#x20AC;&#x2122;ve tried to position themselves in the market so that when things did turn around, they were set to grow. More than 90 per cent of GCCLâ&#x20AC;&#x2122;s work is oilďŹ eld, primarily dirt work. They have sidelines in ďŹ&#x201A;uid hauling and oilďŹ eld maintenance. Up until recently, it was mostly infrastructure for small gathering systems, with six-inch pipe being the largest they traditionally dealt with. Now the company can take advantage of resources and experience within Site Energy Services to tackle practically any project in the region, right up to the regional gathering systems and plants for companies like Enbridge or TransGas. Manitoba expansion In 2006, GCCL established an operations base near Sinclair, Man. In 2007, Melita, Man., saw a location added. It was more of a storage yard until this year. Now they are doing business out of Melita. â&#x20AC;&#x153;Up until probably 10 years ago, Saskatchewan was basically all of our work,â&#x20AC;? Greg said. â&#x20AC;&#x153;Our work in Manitoba has become a larger share of our business every year since we started there.â&#x20AC;? Over the last ďŹ ve years, much of their growth has been on the Manitoba side of the border due to

Greg and Paulette Cousins have been partners in business and life for over 30 years. The pair will still be highly active in the operation of Greg Cousins Construction Ltd. after its Nov. 1 merger with Site Energy Services Ltd. Greg noted GCCLâ&#x20AC;&#x2122;s yard was mostly empty, because everything was out working.

that provinceâ&#x20AC;&#x2122;s expanding oilďŹ eld. â&#x20AC;&#x153;My parents are both from there. It was a natural progression. We knew the people,â&#x20AC;? Greg said. â&#x20AC;&#x153;Manitoba has been a very good source of labour - with a good work ethic â&#x20AC;&#x201C; hard working farmers.â&#x20AC;? Family business The company, until now, has always been a family business. Paulette has been oďŹ&#x192;ce manager since 1980.Originally from Storthoaks, Paulette had Greg as her grad escort, although they werenâ&#x20AC;&#x2122;t â&#x20AC;&#x153;high school sweethearts.â&#x20AC;? They married in 1983. â&#x20AC;&#x153;I had the best of both worlds,â&#x20AC;? Paulette said. â&#x20AC;&#x153;I got to be at home with the kids, and they went with us everywhere, be it to the bank, or to see customers, the kids tagged along. I worked out of my home until the late â&#x20AC;&#x2122;80s. I managed my family and our business. I did a whole lot of work at night. I would wait until they were in bed.â&#x20AC;? While the kids were younger, Paulette was ac-

tive with their kidsâ&#x20AC;&#x2122; school activities, sports and their daughterâ&#x20AC;&#x2122;s ďŹ gure skating, while Greg spent 11 years as an air cadet instructor and volunteer with their boys. Each of their three children â&#x20AC;&#x201C; Lisa, 26; Paul, 24; and Mark, 19 - has played a part. â&#x20AC;&#x153;Lisa helped with admin work when she was out of school,â&#x20AC;? Greg said. â&#x20AC;&#x153;Paul was responsible for nightly shop checks. Mark took that over and worked last summer as a gravel truck driver.â&#x20AC;? Lisa is now pursuing an MBA at Harvard. Paul has a computer science degree and is a civilian employee of the RCMP. Mark is pursuing environmental engineering at the University of Saskatchewan. With all three children now following their own pursuits, that left open a question about succession planning for when Greg and Paulette feel the time is right to step back. The merger takes care of those concerns, allowing for stability for the company and its employees in the long term. Site will be looking at further expansion opportunities within the oilďŹ eld sector, Greg noted. â&#x20AC;&#x153;Siteâ&#x20AC;&#x2122;s goal is to be a full service provider. Weâ&#x20AC;&#x2122;re very excited. You canâ&#x20AC;&#x2122;t put into words how much knowledge and experience we can draw from.â&#x20AC;? The companyâ&#x20AC;&#x2122;s VP of operations, Lyle Reid, was part of a team that led Flint Energy Services growth from $250 million a year to over a billion dollars a year, Greg pointed out as an example.

In the early days, you would Ă&#x20AC;nd Greg Cousins operating a with a Case 580E backhoe. Heâ&#x20AC;&#x2122;s seen here with his two of his children. Photo submitted

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PIPELINE NEWS December 2010

The production of the Cenovus Weyburn unit has peaked several times over the past 55 years, as new technologies improve recovery. File photo

Cenovus stretches production from 55-year-old oil¿eld Weyburn, Calgary – When talking about “peak oil,” the Cenovus Weyburn ﬁeld is a good example. It has peaked, not once, but several times. Its production is expected to last the better part of a century,

going another 40 years from today with current technology. The Weyburn field was first developed in the mid-1950s. The pool was unitized in the 1960s, allowing for waterflooding and a surge in produc-

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tion. Under primary production and then waterflood, it peaked at about 46,000 bpd in 1966. After that, the production trailed off in the classic bell curve described by M. King Hubbert in 1956 when he first spoke of peak oil. But that’s where King’s theory goes off the rails, at least locally. In the late 1980s, vertical infill drilling flattened out production at approximately 13,000 bpd for the next six years, having climbed from around 10,000 bpd prior to the infills. Then horizontal infills brought the field’s production up to a third peak during the

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late 1990s, with production running around the 20,000 bpd range, and spiking to nearly 24,000 bpd in 1996. Since 2000, when the well-publicized CO2 enhanced oil recovery (EOR) flood came into play, production has peaked yet again, hitting 30,000 bpd in 2007 and hovering above 25,000 bpd since then. The process uses carbon dioxide produced at Dakota Gasification in Beulah, N.D., in a miscible flood. Over 55 years, the Weyburn field has indeed peaked – several times. Allan Greeves, Cenovus team lead for the Weyburn project, said,

“The best way is to describe is, we’ve seen a quite large production volume from early on in the pool life. We’ve gotten the easy oil out ﬁrst, and we’ve had to work harder and harder to get the remaining oil out. That’s typical of the whole peak oil theory. Easy oil is behind us, and the more challenging oil is left to recover.” “It’s going quite well. We’ve had good EOR response to the early phases. We continue to roll out new patterns to our EOR and CO2 recovery. This year we are continuing that expansion, and we’ll be starting our drilling here on our next pattern rollouts,” Greeves said.

A “pattern” is a cell of wells surrounding a carbon dioxide injector well. Typically, six producer wells will surround an injector well in a honeycomb pattern. Currently, about 60 per cent of their resource has been developed in this manner. Production, he said, is holding flat. Ongoing production levels depend on the capital spending each year into expanding EOR. A small lull occurred five years ago, when there were fewer patterns and infill wells added. “We might come up a little bit, but generally, we’ll be holding steady for the next few years. ɸ Page B4

PIPELINE NEWS December 2010

Peak production, again and again

Weyburn Unit Oil Production 50,000 45,000

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ɺ Page B3 40,000 “In Saskatchewan, we’re happy with our CO2 supply,” Greeves said. He noted that in Alberta, CO2 35,000 supply for companies looking at enhanced oil recovery is “a real issue.” 30,000 Asked of the potential for other operators to do similar work with CO2 EOR, he pointed to access to 25,000 Vertical Infills CO2. Their good supply has allowed them to become 20,000 the leader. The security of the supply, and the price CO2 EOR that works for their project, the purity of the CO2 15,000 Pre CO2 and the pressure it is available at, are an advantage Hz Infills for them in southeast Saskatchewan. 10,000 Primary & Waterflood “Over time, you’ll see more CO2 sources become available. The pricing may be an issue, but the prox5,000 imity will hopefully be there.” 0 “As the greenhouse gas issue evolves and people look at taking CO2 out of the atmosphere, and increasing EOR opportunities, it’s a perfect fit for this type of project. As time goes on, I believe you’ll see Production through YE 2 009 Date more and more of this [type of ] CO2 EOR project,” The Weyburn Àeld has seen several peaks in production over its 55 years, and it is anticipated to Greeves said. keep producing for another 40 years. Graphic courtesy Cenovus Energy SaskPower is expected to make an announcement soon as to whether or not it will go ahead with which is where they see the most potential for CO2 its planned CO2 capture project at Boundary Dam Power Station. “Those would be the kind of sources industry is flood. Regarding peak oil globally, Greeves said, “The looking for, for sure,” he said. "We Dispatch for the Oil Patch" Whereas horizontal, multi-stage fracked wells essence of it is, scarcity of supply increases price, have made a big difference in tight oil plays near the price gives us incentive to apply newer technology Weyburn field, such completion techniques are not and look for newer technology all the time. In turn, it • Two Way Radios provides more supply. It’s one of those cyclical things required in the Weyburn field. • Alarm Monitoring that really drive the industry. You see that as time “Our reservoir does not require that. Our res• Safety Checks ervoir is a carbonate that has very good porosity goes on, as price allows, we adapt more technology and permeability,” he said. “It’s not like a tight silt which allows us to keep getting more oil out of the or sandstone that needs encouragement through a ground. It makes peak oil theory really tough to pin 738 5th Street (back door) Phone: 634-3522 down, because you get those technology improvemulti-stage frac.” 24 Hour Service - 7 Days A Week! They are in the Midale and Marley formations, ments that prolong the life.”

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PIPELINE NEWS December 2010

Kramer receives Order of Merit Regina – Donald E. Kramer, chairman of Kramer Ltd., will be a recipient of the Saskatchewan Order of

said. “Each honouree exempliﬁes excellence, determination and passion, and we are all the beneﬁciaries of their outstand-

Donald E. Kramer.

Merit. Kramer Ltd. is Saskatchewan’s Caterpillar dealership. Lieutenant-Governor Gordon Barnhart announced the names of seven recipients of the Saskatchewan Order of Merit on Oct. 20. “This year’s recipients of the Saskatchewan Order of Merit are an extraordinary group of individuals,” Barnhart

innon, professor of history, University of Saskatchewan, Saskatoon; • Dr. J.D. ( Jack) Mollard, O.C., founder

Photo submitted

ing contributions.” The 2010 recipients are: • Maurice (Mo) Bundon, senior vicepresident and CEO of Harvard Development Ltd., and chief operating oﬃcer, McCallum Hill Group of Companies, Regina; • Donald E. Kramer, chairman, Kramer Ltd., Regina; • Dr. Janice MacK-

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and past president of J.D. Mollard and Associates Limited, Regina; • Elizabeth Raum, composer, teacher and professional oboist, Toronto; • Dr. Douglas A. Schmeiser, Q.C., professor emeritus of Law, University of Saskatchewan, Saskatoon; and • Myrna F. Yuzicapi, special advisor to SIAST on Aboriginal Initiatives,

Saskatoon. Kramer’s official biography that was included with the announcement from reads: In the field of business, commerce and industry, there is no name as recognizable throughout Saskatchewan as Don Kramer. But it is his generous support of countless community organizations that have helped make Saskatchewan a better place to live, work and raise a family. Mr. Kramer has served as president and chair of Kramer Ltd., the president the Canadian Association of Equipment Distributors and campaign chair of the United Way of Regina. He was chair of board of directors for Santa Maria Home and Junior Achievement and director of the board for the Saskatchewan Roughriders, Saskatchewan Government Insurance Office, Canadian National Institute for the Blind, the YMCA and the American Association of Equipment Distributors. From his position as a business leader in Saskatchewan, he has had the opportunity to establish programs that have benefited the lives of thousands of Sas-

katchewan residents. In 1969, he established The Southern Saskatchewan Community Foundation Inc. (SSCF), with the motto of “a charity for all charities,” and through a permanent endowment fund, the Donald and Claire Kramer Foundation has provided financial support to over 30 local charitable causes annually. With the personal belief that a creative community must offer creative means of expression, Mr. Kramer has been a major supporter of the arts in Saskatchewan, including the Regina Symphony Orchestra and the RCMP Heritage Centre, and has provided key funding for several acquisitions and special exhibits at the Mackenzie Art Gallery, including Joe Fafard’s bronze sculpture of cows. Mr. Kramer was the chief financial donor to the Kramer IMAX Theatre in Regina, and several scholarships at the Universities of Saskatchewan and Regina, Campion College and SIAST, helping over 300 students across Saskatchewan, realize their dreams of furthering their education. A vision and love of all people, he provided

for a residence and treatment program for youth suffering from mental illness, a program that continues to flourish today. His good work has continued through the donation of property and financial assistance to community organizations including Kramer Home, the Marian Centre, and Holy Rosary Cathedral. Mr. Kramer is a recipient of the Canada 125 Commemorative Medal. In 2009, he received the Outstanding Philanthropist Award, from the Regina Chapter of the Association of Fundraising Professionals.

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PIPELINE NEWS December 2010

Going for heavy oil in a peak oil world Saskatoon â&#x20AC;&#x201C; As easy-to-get-at light, sweet crude oil becomes more and more scarce, the world is going to see a lot more companies like Saskatoonâ&#x20AC;&#x2122;s Rallyemont Energy Inc. Rallyemont Energy spent November pursuing a 14 square-mile 3D seismic program in the Prince area, north of North Battleford and south of JackďŹ sh Lake. The company has plans for up to 10 delineation wells this winter, after having drilled and cored several wells of the past year. They also have land in the Wilkie area. The target: heavy oil that will likely require enhanced oil recovery. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m a believer in peak oil theory,â&#x20AC;? Corey Giasson, president and CEO of Rallyemont, told Pipeline

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News. â&#x20AC;&#x153;Peak oil theory doesnâ&#x20AC;&#x2122;t mean weâ&#x20AC;&#x2122;re going to run out of oil. The low-cost oil has been produced. The oil that remains will be more costly and diďŹ&#x192;cult to extract.â&#x20AC;? He said the price of oil has to justify its extraction. Giasson noted that it took oil in the $60 to $65 range for SAGD in the oilsands to get payback. For their own project, itâ&#x20AC;&#x2122;s hard to say right now. There are signiďŹ cant cost beneďŹ ts to their location over north-

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ern Alberta, being only 70 miles from Lloydminster with established communities like North Battleford nearby. â&#x20AC;&#x153;Saskatchewan also has a better enhanced oil recovery royalty regime,â&#x20AC;? he added. â&#x20AC;&#x153;The Bakken is another good example of it. Without horizontal drilling and multi-stage fracking, you wouldnâ&#x20AC;&#x2122;t see it. â&#x20AC;&#x153;The low-hanging fruit has been picked,â&#x20AC;? Giasson concluded.

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PIPELINE NEWS December 2010

First Petroleum Safety Conference Prairies a success By Brian Zinchuk Regina – Enform established a Saskatchewan presence in Regina over the last year, and now it has hosted its first major safety conference in that city. The first Petroleum Safety Conference Prairies was “absolutely excellent,” according to Bob Ross, Enform Saskatchewan manager and master of ceremonies for the event. “We hope you all leave with innovated ideas you can take to your workplace,” he noted in his closing remarks. Enform hopes to continue with the conference, which was similar to the annual event held by Enform in Banff. “Industry is concerned with the health and safety of workers and direct participation in preventing injury and illness of their workers,” he told Pipeline News. “Prevention is the key element in safety right now.” There were approximately 145 attendees to the conference. The trade show had nearly 20 safetyrelated booths. Speakers included Saskatchewan Deputy Minister of Labour Relations and Workplace Safety Mike Carr, who gave the executive address, and retired major general Lewis MacKenzie as the keynote speaker. Mike Williamsen spoke on building safety leadership. Dr. Don Melnychuk went into detail on fatigue management. Lawyers Jennifer Miller of Bennett Jones and David Myrol of McLennon Ross tackled the legal perspective of safety in Western Canada. The conference kicked off with two half-day pre-conference workshops held at the Enform, SPISA campus on Nov. 1. Certificate of Recognition (COR) Program; benefits, requirements and how to maintain Enform’s new guidelines on contractor management systems and supervisor competency were the focuses of the day’s programs.

Nearly 20 exhibitors took part in the trade show portion of the Enform Petroleum Safety Conference Prairies in Regina on Nov. 2.

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PIPELINE NEWS December 2010

Keystone XL could pipe 25 per cent U.S. Bakken oil By Geoff Lee Calgary – TransCanada may be crossing its fingers that American crude oil producers in the Williston Basin jump at the opportunity to ship their oil on the proposed U.S. portion of the XL pipeline to extend from Hardisty, Alberta to the Gulf Coast. In September, TransCanada introduced a new Bakken Marketlink and Cushing Markelink open season to allow U.S. oil producers to submit bids outlining how much their want to ship and for what duration with a Nov. 19 deadline. The Bakken Marketlink would provide crude oil transportation service from Baker, Montana to Cushing, Oklahoma and to the U.S. Gulf Coast. “Once those bids are submitted, our commercial team will negotiate with those interest parties to come to a final resolution,” said TransCanada spokesperson Terry Cunha. An affirmative response to the open seasons by Williston producers could help to pave the way for anticipated regulatory approval for the U.S. portion of the XL project in the first half of 2011. TransCanada has already received regulatory approval for the Canadian portion of the project which will increase commercial capacity of the full Keystone pipeline system to 1.1 million bopd. “What we are doing by holding the Bakken Marketlink open season and the Cushing Marketlink open season is providing an opportunity for

TransCanada set a deadline of Nov. 19 to accept proposals from U.S. Bakken oil producers in the Williston Basin who want to ship their oil on the proposed Keystone XL pipeline. The proposed pipeline to run from Hardisty, Alberta to the U.S. Gulf Coast, could carry up to 25 per cent U.S. Bakken crude oil. Photo Copyright © TransCanada Corporation. All rights reserved.

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U.S. producers to put domestic crude into the XL pipeline,” said Cunha. “At full capacity, we could see up to 25 per cent of the capacity of that line being domestic (U.S.) which would demonstrate it is no longer just an international pipeline, but would be providing Canadian crude and domestic crude in the U.S. to the Gulf Coast.” The project would provide Bakken producers in the Williston Basin with an alternative and competitive market access solution, using pipeline facilities that form part of TransCanada’s proposed Keystone XL project. Signiﬁcant increases in Bakken crude oil production in recent years have resulted in production exceeding available exit pipeline capacity from the region. The Bakken Marketlink Project is expected to help relieve exit pipeline capacity constraints and support expected growth from this key U.S. producing region. ɸ Page B9

634-6081

Cell: (306) 487-8120 Bus: (306) 487-2608 Fax: (306) 487-2296 Lampman, SK. Email: huttholdings@sasktel.net

PIPELINE NEWS December 2010

North Dakota and Montana gain on-ramp plications for approval of the construction of $140 million of required facilities in Baker, Montana and $70 million in Cushing, Oklahoma. “What we would need to do here in Baker is build some metering facilities and, in addition to that, we would need to build two 250,000 barrel tanks at Baker,” said Cunha. “At Cushing, we would also have to build two 250,000 barrel tanks if we have a successful open season.” The Bakken and Cushing marketlink projects are expected to commence providing service in the ﬁrst quarter of 2013. In the meantime, Cunha says TransCanada’s focus is on waiting to get the ﬁnal environmental impact statement (from the Environmental Protection Agency) to the Department of State (U.S. State Department) by the end of 2010 or early 2011. “Once they get that there will also be a 90-day comment period to determine the national interest of this project,” said Cunha. “Once that 90 day period is concluded, the Department of State will hopefully provide us with the presidential permit or determine not to.”

ɺ Page B8 No Canadian crude from the Bakken play in southeast Saskatchewan will be shipped on the XL line in Montana. Meanwhile, construction of the second phase of the US$12 billion Keystone pipeline system to expand nominal capacity to 591,000 bopd, and extend the pipeline system to Cushing, Oklahoma is over 90 per cent complete. This phase is expected to be operational in ﬁrst quarter 2011 with contracted volumes of 530,000 bopd. TransCanada’s Keystone XL has a design capacity of 500,000 bopd with current binding long term commitments from Canadian crude oil producers for 380,000 bopd from Hardisty. Keystone will play an important role in linking a secure and growing supply of Western Canadian and U.S. Williston Basin crude. Cunha said the idea for the open seasons took hold after TransCanada had discussions with Ameri-

can producers in the Williston Basin and found there was deﬁnitely a shipping interest in that region. “We still have capacity left on the line so we felt the open season – it’s an opportunity to ship domestic crude across the U.S. to the Gulf Coast,” he said. “A lot of producers in the area want to get their product to the U.S Gulf Coast. This will have a direct impact on the value of the crude.” Cunha says if the marketlink bids are successful, TransCanada will “continue to move it forward to the next steps” which would mean submitting ap-

Gibson Welding Ltd. Oilfield Trucking & Rentals

WRAP UP A GREAT SEASON! Hope your holiday season is Älled with lots and lots of wonderful surprises. We're so grateful for all you've given us this past year.

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B10

PIPELINE NEWS December 2010

U of S studies gasiÂżcation for greener oilsands fuels Saskatoon â&#x20AC;&#x201C; Peak oil theory is predicated on fears that the world has been running out of oil since the 1970s. That worry is a background motivator for a new gasiďŹ cation research project involving the University of Saskatchewan to produce greener fuels for electric power generation and oilsands upgrading. The $1 million project is funded by the fed-

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Professor Todd Pugsley stands in front of Ă uidized bed equipment in the University of Saskatchewanâ&#x20AC;&#x2122;s chemical engineering pilot plant. Photo submitted

eral Networks of Centres of Excellence and administered by Carbon Management Canada Inc. (CMC) in Calgary. The CMC Network has been allocated $25 million for projects that can reduce Canadaâ&#x20AC;&#x2122;s greenhouse gas emissions.

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The gasiďŹ cation project was proposed for funding by Todd Pugsley, a professor of chemical engineering at the U of S in Saskatoon, in collaboration with researchers from other Canadian universities in the CMC Network project. â&#x20AC;&#x153;We are a collection of universities, and we are interacting with utility companies and oilsands companies,â&#x20AC;? said Pugsley who notes his group is developing a new process for gasiďŹ cation. â&#x20AC;&#x153;We are taking three Western Canadian fuels of interest â&#x20AC;&#x201C; lignite coal from Saskatchewan, sub-bituminous coal from Alberta, and petroleum coke from Fort McMurray oilsands operations, and looking at gasifying this material to produce a clean gas-use fuel,â&#x20AC;? he said. GasiďŹ cation is a clean energy technology that converts any material containing carbon such as coal, petroleum coke or biomass into a synthetic gas called syngas. É¸ Page B11

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PIPELINE NEWS December 2010

B11

Syngas has several possible uses ɺ Page B10 Syngas can be burned to produce electricity or further processed to manufacture chemicals, fertilizers, liquid fuels or hydrogen for upgrading heavy crude oil. “That’s the power of gasiﬁcation,” said Pugsley. “You can take that gas-use product and make pure hydrogen. You can take the gasuse product and make ethanol or methanol or chemicals or a substitute natural gas. “You can also use it to produce heat and power. You can generate electric power from coal with it, but in a much cleaner fashion.” An important byproduct from the process is carbon dioxide which can be sequestered underground. Aside from using solid carbon-based fuels for the gasiﬁcation project, the researchers will also source the heaviest fraction of waste bitumen and gasify it.

“If you take the heavy material left over – the liquid material from oilsands bitumen and make hydrogen, you don’t need to use natural gas to make hydrogen,” said Pugsley. Pugsley says the interest in the project from oilsands companies is strong as they are under pressure to improve their environmental performance. “Instead of using clean natural gas to upgrade a dirty fuel – if you use gasiﬁcation to make your hydrogen, you have improved on your environmental footprint,” he said. “There is an environment incentive, and also an economic one because you are not paying for the natural gas anymore.” Pugsley was interviewed in Washington, D.C., where he was attending a global Gasiﬁcation Technologies Conference Oct. 31 to Nov. 3.

“Worldwide, this is very important technology,” he said. “All continents are interested in using gasification not just for clean coal. Similar gasification technologies can be used for biomass as well. “You can use that as a reliable route to making biofuels. It’s a tremendously important technology and our research is continuing to develop this and make it more cost effective and reliable.” Gasification has been used on a commercial scale for more than 75 years by the chemical, refining and fertilizer industries and for more than 35 years by the electric power industry, but the process is costly to operate and maintain. There are also issues with reliability. Gasifiers operate under severe conditions such as high temperature, high pressures and slag running down along the vessel walls, all of

which can lead to unplanned shutdowns. “Our research aims to improve both the capital cost and the reliability of gasifier technology,” said Pugsley. “We are aiming for something transformational – a new breakthrough technology that will overcome these challenges. “If you are an electrical utility company like SaskPower, or if you are using gasification to make hydrogen for oilsands upgrading, you need it to be available almost 100 per cent of the time. “There are challenges there that need to be overcome.” The gasification project will take three years to complete with a pilot study to prove the research. “We have our fuels in place, and we are characterizing them for their fuel properties, and doing some chemistry studies,” he said.

“From there, we will go to pilot plant studies in the second and third year of the project.” As for how gasification fits into the peak oil theory, Pugsley says it’s a certainty that crude oil prices will rise again like they did in 2008. He says that will have a significant impact on the economy – if we don’t have alternative means to create the liquid fuels that we need. “Gasification is an

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alternative route to liquid fuels like gasoline and diesel,” said Pugsley. “It can be much more cost eﬀective when crude oil prices go high. What we need now is the research and development that means that we’re ready, so when oil prices start to rise again, we have alternative technologies to make our liquid fuels.”

Season’s Greetings It’s the most wonderful time of the year, and we hope it brings you much joy!

United Centrifuge Ltd. “24 Hour Service” Ph: 842-2378 Hwy. 39 E, Weyburn email: unitedcentrifuge@sasktel.net www.unitedcentrifuge.ca

B12

PIPELINE NEWS December 2010

Nordics hopes to tap into low cost capital Endeavour, Winnipeg – Nordic Oil and Gas Ltd the Company has received its well license from the Saskatchewan government, thereby paving the way for Nordic to commence drilling its new exploration well at Endeavour, north of Preeceville. “While it took longer than we had anticipated, we are delighted to ﬁnally receive the required well license that now allows us to

move forward with this exciting project,” CEO Donald Benson in a news release. “The first well location is offset from a 1950s well, which encountered oil in six different intervals. The seismic that we shot indicated that a well drilled back in the mid-1950s was drilled on a low, whereas our location is on a structural high. The 1950s well also indicated the presence of a salt cap,

which we feel acts as a seal.” In addition, Benson also noted that the Company has completed surveying and is applying to license a second location in the Endeavour area, “and we plan on drilling both wells at the same time.” Nordic announced on Nov. 12 that the ﬁfth of ﬁve previously standing and cased wells at Lloydminster, which were drilled last year, is

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now completed and on production. The company and its partners in the region are planning to drill two new wells in Lloydminster before the end of this year, and have identiﬁed two other wells for re-entry. As such, when all wells are on production, Nordic will have a 33 1/3 per cent interest in 18 wells at Lloydminster by the end of 2010 or early 2011. Financing Nordic is banking on the approval of a creative source of financing – up to $10 million – to further explore and develop oil and gas resources in Western Canada. The junior oil and gas company based in Winnipeg is waiting for various Canadian securities and regulators to OK the $10 million equity line facility or ELF from Bostonbased Dutchess Capi-

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PIPELINE NEWS December 2010

Harder to get at Saskatoon-based geophysicist Michael Hartley says that when it comes to the idea of peak oil, there’s one particular assumption that stands out. Contacted from Australia, he said, “The essence of my argument is that peak oil assumes that all the oil in the world is available. What I argue is that the human race could never get all the oil out of the ground

as it will be found in increasingly more impassable locations, in more complicated zones, and in smaller quantities. “The price will go up and up so people will not be able to aﬀord it, but rather move to cheaper options. Even now the amount of energy in one dollar of gasoline is less than one dollar of natural gas or other fuels.” He added that EnCana is partnering with

the government of Canada to install natural gas fuelling stations along the TransCanada highway. “This, coupled with new wetgas storage tech, is going to incentivise consumers to switch away from gasoline. I think even delaying mass shift into electric vehicles. “The only problem I see is the need for plastics.”

B13

Enform Petroleum Safety Conference Annette Goski, an account manager with the Saskatchewan Workers Compensation Board, took care of the WCB booth at the Enform Petroleum Safety Conference Prairies in Regina on Nov. 2

Tra¿na drilling in Southwest Sask. Traﬁna Energy Ltd. announced that a drilling rig has been contracted to drill an Upper Shaunavon horizontal well on its Rangeview/Divide property in southwest Saskatchewan. Drilling was projected to begin in late November. Based on the seismic interpretation of the surrounding acreage, a successful well would lead to a number of follow-up drilling locations. Also at Rangeview/ Divide, the company plans to re-complete a standing well in the Upper and Lower Shaunavon zones using a new completion technique. The completion entails hydraulically drilling four short-radius horizontal worm-holes, 5.12 centimeters in diameter and 100 metres in length.

As with the Upper Shaunavon drill, a successful re-completion would set up a number of potential recompletions. Trafina has also participated in its first Cardium oil well in the west Pembina area of west central Alberta. The well was successfully stimulated with a 432 tonne 20-stage fracture treatment and flowed to clean-up for 48 hours before being shut in. Over the 48hour period, the well produced a total of 406 bbls of oil and liquids and 346 mcf of natural gas. During clean-up, approximately 37 per cent of the load fluid used for the completion was also recovered. Due to the short duration of the clean-up period, the operator of the well was

DUSTIN DUNCAN, MLA Weyburn - Big Muddy 35-5th Street NE, Weyburn, SK S4H 0Y9 dduncan.mla@accesscomm.ca (Tel) 842-4810 (Fax) 842-4811 (Toll Free) 1-877-842-4810 www.dduncan.ca

unable to predict a stabilized rate of production. Once placed on production, the operator will continue to monitor the well to optimize performance. Production from the well is expected to commence in December. Traﬁna has a 24.375 per cent working interest in this well, the ﬁrst of four (one net) non-operated Cardium horizontal wells the company expects to drill. Drilling

of the second well is expected to commence in the ﬁrst quarter of 2011 with the drilling of up to two additional Cardium wells shortly thereafter contingent upon success. When Traﬁna's current management team was put in place in October 2008, company average production was 280 bbls of oil equivalent per day, weighted 90 per cent

to natural gas. Over the past two years, Traﬁna has disposed of non-core assets and refocused the company, concentrating on becoming more oil weighted while managing debt levels in an extremely soft gas price environment. Today, average company production is estimated to be in excess of 450 BOE a day, weighted

28 per cent to oil and 72 per cent to gas, excluding the Cardium and Upper Shaunavon opportunities in progress. If successful, these opportunities would continue the upward trend in oil production over the remainder of 2010 and into 2011, the company noted. Courtesy Nickle’s Daily Oil Bulletin

See us for all of your instrumentation needs!

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We’re grateful for your patronage this past year and wish you a very happy holiday season.

M.E.T. OILFIELD CONST. LTD. Box 1605, Estevan, Sk. S4A 2L7 Cell. (306) 421-3174, (306) 421-6410, (306) 421-2059 Fax: (306) 634-1273

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B14

PIPELINE NEWS December 2010

CAODC sees rise in drilling rig activity in 2011 By Geoﬀ Lee Calgary – The Canadian Association of Oilwell Drilling Contractors (CAODC) sees a continuation of this year’s strengthening drilling activity in store for 2011 with a two per cent increase in the number of wells drilled and more oil focused drilling. CAODC estimates 11,811 wells will be drilled in 2011, compared with a predicted 11,587 by the end of 2010. The higher num-

ber of wells expected in 2011 reﬂects an increase in the days required to drill a well to 10.8 days from 10.3 days and busier times for drilling. The association projects an average of 356 rigs drilling next year with a utilization rate of 45 per cent, up from this year’s forecast rate of 43 per cent. The outlook is a major improvement from the low 24 per cent utilization rate during the downturn of 2009 when only 8,278 wells were drilled in Western

ATTENTION DEVELOPERS

QUARTER

ACTIVE RIGS

FLEET

2011 – 1st

480

800

60%

42,700

2011 – 2nd

160

800

20%

15,500

360

800

45%

32,400

2011 – 4

424

800

53%

38,000

Average 2011

356

800

45%

128,600

2011 – 3

Drilling 351

2008 Util. 40%

Wells 16,844

UTILIZATION

OPERATING DAYS *

Drilling 209

2009 Util. 24%

Assumptions: WTI: $80.00/bbl (USD)

Wells 8,278

Drilling 346

AECO: $4.00/Mcf (CDN)

* Calculation based on spud $4.00/Mcf to rig release data Assumptions: WTI: $80.00/bbl (USD) AECO: (CDN)

Wells 11,587

10.8 days/well 10.8 days/well

Canada. CAODC predicts 400 rigs to be running on average during the remainder of the fourth quarter in 2010, with a utilization rate of 50 per cent, generating optimism for the beginning of 2011. Drilling contractors can expect a busier ﬁrst quarter in 2011 with a

rig count of 480 and a utilization rate of 60 per cent compared to a rig count of 431 and a 54 per cent utilization rate in the ﬁrst quarter of 2010. Spring break could see a 20 per cent decline in the number of active rigs to 160 similar to the 154 at work in the second quarter of 2010.

The forecast also calls for increasing activity levels during the ﬁnal six months of 2011 compared to 2010, with an average of 360 rigs or 45 per cent at work in the third quarter, rising to 53 per cent of the ﬂeet or 424 rigs in the fourth quarter. CAODC is basing its outlook for 2011 on a

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2010 Util. 43%

The Canadian Association of Oilwell Drilling Contractors (CAODC) is forecasting a total of 11,587 wells in 2010 and 11,811 wells in 2011 in Western Canada. Graphic courtesy CAODC

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2011 Total Number of Wells (Western Canada): 11,811

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crude oil price of $US80 per barrel and a natural gas price of $US4 per million cubic feet. Drilling contractors were busy during the first three quarters of 2010 with 83,359 operating days with the year-end total expected to reach 119,339. The number of operating days in 2011 is forecast at 128,00 0 with the expected carry over of oil focused drilling from 2010. For the first eight months of this year, 6,748 wells were drilled in total, including dry and service wells. Of the number completed, 3,295 were oil wells and 2,946 were gas (53 per cent). The association is not expecting any change in the size of the fleet but it expects some rigs will be removed and replaced with more sophisticated equipment through construction programs underway by a number of contractors.

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PIPELINE NEWS December 2010

SaskEnergy cuts rates

to 9.2 per cent depending on their higher natural gas consumption. “Natural gas rates are a direct pass-through, as SaskEnergy only collects from customers what it pays to suppliers for natural gas on the open market,” Duncan said. On the web: http://www.saskratereview.ca/index. php

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40242872•06/25/10

age levels and weather. After some modest price support during the past winter, natural gas prices have drifted lower throughout 2010. Demand for natural gas has had some improvement in North America; however, growing natural gas production from nonconventional shale natural gas plays has hindered any considerable resurgence in natural gas prices.” “In order to balance the market, either demand must increase or prices need to move low enough so new natural gas production is not economical. New investment in power generation is now predominantly natural gas ﬁred and any future changes in government policy relating to greenhouse gas emissions may also impact the demand for natural gas as a choice fuel.” The application added, “SaskEnergy’s various market analysts views are that the new long-term trend will be in near or somewhat below the 2003 2009 average price of $6.52/GJ.” “This is the third decline in SaskEnergy’s commodity rate in the past two years, and comes prior to the start of the winter heating season, a time when homes and most businesses use 70 per cent of their annual natural gas consumption,” Minister responsible for SaskEnergy Dustin Duncan said. “Commodity markets can be extremely volatile, which is why it’s important this new rate is price-protected through the coldest winter months.” The average residential customer’s bill will decline by seven per cent or $66 annually and commercial customers’ bills will decline by 8.3 per cent

Carson Energy Services workers measure out joints of pipe for a TransGas pipeline project along Highway 9 south of Carlyle in late September. TransGas is the pipeline subsidiary of SaskEnergy Photo by Brian Zinchuk

40242872•03/06/09

Regina - SaskEnergy’s recent rate adjustment may be good news to consumers, but it doesn’t do any favours to producers who are suffering through a down market. The Government of Saskatchewan has approved a 12.7 per cent decrease to SaskEnergy’s natural gas commodity rate, effective Nov. 1, 2010. The new rate of $4.55/gigajoule (GJ) is the lowest rate offered by SaskEnergy to Saskatchewan consumers in nearly a decade, and reflects lower anticipated natural gas costs over the coming year. Following a public review process, the Saskatchewan Rate Review Panel recommended the government accept SaskEnergy’s September 9, 2010 application to lower its commodity rate from $5.21/GJ to $4.55/GJ, a rate comparable to the rate of $4.52/GJ implemented for the winter of 2000/2001. In October 2005, the rate had reached a peak of $9.50/GJ. It fell to $6.57 by November 2007, then peaked again later in November 2008, at $8.51 /GJ. The Crown’s rate has been on a continual slide ever since, dropping to $5.96/GJ in April 2009 and again to $5.21 in November 2009. The dropping rates have been reflected in Saskatchewan’s natural gas drilling this year, which has been almost non-existent, with only 81 wells drilled by early September. In its rate review application, SaskEnergy stated, “Natural gas prices are set in an open market and are influenced by a number of variables, such as production levels, economic activity, power generation, stor-

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PIPELINE NEWS December 2010

100 Mile House Realty 100 Mile New & Used Auto Parts 1st Choice Auto Detailing/ Crackmasters/ Scorpion Truck Liners 3D Maintenance 3J Welding & Rentals 3twenty Solutions A&S Oilfield Operating AB Auto Detailing Absolute Daylighting Absolute Locating AC Power Acklands Grainger Action Towing & Recovery Service Acutec Systems Ltd. Adoil Advance Engineered Products Ltd. Advantage Oil & Gas Ltd. Advantage Products Inc. Aero Advertising AGG AGI Envirotank Aircomm Instrumentation All Star Ventures All Weather Shelters Inc. Altus Geomatics Am Inspection Amik Oilfield Equip. & Rentals Annugas Compression Consulting Inc. Anytime Hot Shot Apex Advanced Solutions Apex Distribution Apex Oilfield Ar-Tech Coating Ltd. Asher Engineering Aspen Custom Trailer Astro Boiler ATCO Structures & Logistics Auto Gallery Automated Tank Manufacturing Inc. Badger Daylighting Inc. Baker Hughs Bandit Pipeline Bar Engineering Barber Motors Bear Claw Casino Bear Slashing Beretta Pipeline Construction Ltd. Bert Baxter Transport Big Bore Directional Drilling Big Country Energy Services CP

Big Sky Drilling Ltd. BJ Services Company Blythman Agencies Bob Nixon Bobcat of Regina Border Bike Rally Border City Dental Centre Border Drilling Ltd. Border Tank Rentals Borets Weatherford Boyd Excavating BPC Services Group Brad Polson Brady Oilfield Brake & Drive Systems Ltd. Brent Gedak Welding Brightling Equipment Ltd. Brothers Coating Brutus Truck Bodies Bucyrus Bully Blast & Paint Services Ltd. C & B Oilfield Services C&N Oilfield Caltech Surveys Ltd. Cameron - NATCO Can West Propane Canadian Advanced ESP Canadian Custom Carts Canadian Natural Resources Canadian Western Bank Canalta Hotels Can-Am Canasonics Inc. Cara Dawn Transport Ltd. Carlyle RV & Leisure Carnduff Electric Carson Energy Services CD Oilwell CE Franklin Ltd. CEDA Champion Technologies Chemicals by Sterling Choice Office Products Cinlor Industrial Circle ‘D’ Transport City of Lloydminster Clarence Campeau Development Fund Clariant (Canada) Inc. Classic Jewelers Classic Oilfield Service Ltd. Classic Vacuum Truck Clean Harbors Engery & Industrial Services Cliff Nankivell Trucking College Park Motors Conn Pumps Connor Kirby Trucking

Con’s Energy Continential Engine Rebuilders Control Technology Co-op Petroleum Core Lab Core Master Courage Oilfield Crazy Eye Safety Crescent Point Energy Crown Advertising Products Inc. C’s Oilfield Cummins Western Canada Curly’s Picker Service Custom Truck Sales D&D Oilfield Rentals Dana Construction Dana Fire Trucks Ltd. Danatec Educational Services Ltd. DanD Trucking Dart Service Darwin Fox Dash Tools David Joyce Davies Park Day Construction Dayman Trucking Days Inn DB Safety Solutions Demby Trailers Desert Sales Design 9 Dex Sandblasting & Painting Diamond B Transport Ltd. Direct Way Power Solutions DJ Truck Sales Do-All Metal Fabricating Dominion Lending Centre Don Fichter Don’s Tire Shop Ltd. Doreen Eagles, MLA Double Barrel Hotshot Doug Brownridge Downey & Crowe Auction DPS Microbial Solutions Inc. DT Sprayfoam Insulating Dustin Duncan, MLA Great West LifeDwight Blomander Eagle Drilling Services Eagle Oilfield Service Eagle Well Servicing Edge Oilfield Safety Services Edge Safety & Supply Eltek Supply Enbridge Pipelines Endeavor Machining Solutions Energy Auctions

Energy Training Institute Ener-Test Enform Engineered Portable Shelters Ensign Big Sky Drilling Ensign Rockwell Entegra Controls Envirotrap EOG Resources Equal Transport Essential Coil Tubing Esso Universal Logistics Estevan Meter Estevan Plastic Products Estevan Telephone Answering Service Estevan Trophy & Engraving EUROPUMP Systems Inc. Everette Jones Ex-Cel Well Servicing Ltd. Exhaust Masters- Lloydmister Extreeeme Limousine Fast Trucking Ltd. FAVA Oilfield Tech Ltd. Fiberglass Solutions Fiberspar Corp. Fieldtek Holdings Flare Solutions Flint Energy Services FloDraulic The Floor Store Fort Garry Industries Frank Schiller Frontier Peterbilt Frozen Topsoil Fugro Full-Tilt Field Services Fusion Industries G Force Diesel Service Garon Coach Line Ltd. Garrison Oilwell Servicing Genesis Cleaners Gescan Gibson Energy Gibson Weldingzz Girard Bulk Glen Peterson Construction GLM Industries Global Steel Ltd. GNS Industrial Trailer Services Ltd. Goodon Industries Gosselin Pipe & Steel Great Plains College Greg Cousins Construction Lt.d Grenco Grimes Well Service Grit Industries Inc.

GT & H Holdings Inc. Guardian Guest Controls (2001) Ltd. Guthrie Group of Companies GW Trenching & Hauling H&L Repair Hanks Maintenance Hard Shak Structures Harley Davidson Yorkton Harold Trew Heat Hawg Heating Solutions International Inc. Hei Bro Tech Petroleum Services HHM Builders High Card Pump & Mechanical High Energy Holden Colony Home Building Center Home Suites Hotel Hornoi Leasing Hot Tools How 2 Energy Hurricane Industries Hutt’s Trucking Ltd. Hydratec Hydraulics I.T.S. Inc. Independent Pump Service Independent Well Servicing Industrial Communications Industrial Electric Investors Group - Jim Pratt J&V Nielson Jensen’s Tank Manufacturing Jerry Mainil JJ Trucking John Davies Johnstone Tank Trucking Ltd. Jonmac Holdings Just For You, Health & Wellness K & D Truck Parts K&S Power Tongs Ltd. Kandrea Insulation Kash Downhole Anchors KBY Hot Shot Keith Raynard Kelly Lafrentz Trucking Kelly Panteluk Kelly’s Hot Shot Kelro Pump & Mechancial Kendall’s Auto Electric Kenilworth Combustion KenLar Insulations Kennedy Welding Kenneth Blair Hair Salon Kenneth L. Austin Kenworth Lloydminster

We wo uld like to than k

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PIPELINE NEWS December 2010

Ketro Pump and Mechanical Kings Water Kisbey Rink Klaws Trucking Koba Holdings Kobes Welding Kohaly & Elash Law Firm Korpan Tractor Kramer Ltd KRJ Custom Fabricating L&C Trucking Lafrentz Oilfield Construction Lampman Electric Land Solutions Lane Land Service Langbank Co-op Lawrence Lemieux L-Con Transit LD Allan Leading Manufacturing Group Inc. Leclair Transport Len Grant Level Best Technologies Linda Boxall Lloydminster Chamber of Commerce Lloydminster Oilfield Technical Society Lloydminster Paint & Supplies M.E.T. Oilfield Construction Magna Fab Inc. Magnum Gun Outfitters Manitou Flushby Mark Leisle Welding Marshall’s Safety Maverick Construction Maverick Oilfield Services Maxxam Analytics Mayco Well Servicing McDiarmid Lumber McDougall Auction McGillicky Oilfield Services Meridian Surveys Ltd. Metaltek Machining Metra Equipment Inc. Michael Chisholm, MLA Michelle Jones Midwest Bulk Fuel Sales MidWest Truck Center Millennium Directional Service Ltd. Minard’s Leisure Mission Hot Shot Mitra Oilfield Mobile Data Tech Moody’s Equipment Moose Mountain Mud

Morley Muldoon Transport Ltd. MRC - Midfield MTM Energy Services Mullers Mudders Murray GM National Oilwell Varco National Trailer Parts Nelson Motors New Age Electronics Newco Tank Corp. Nodaco Nootka Island lodge North American Lumber North Dakota Petroleum North West Regional College Northwell Rentals NuEra Oilfield Service Nothern Factory Workwear NSWB Oil City Diesel Oilflow Solutions Inc. Outlaw Oilfield Hauling Ltd. Oxbow Tire Oyen Welding & Machining P.S. Electric Packers Plus Palko Environmental Ltd. Parkside Oilfield PE Fusion Peddler Consignments Penn West Energy Penta Completions Percy Davis Custom Brokers Petrobakken Petroleum Society SPE Lloydminster Phil’s Oilfield Contracting Phoenix Technology Pioneer Professional Services Group Pipe Hustlers Pipemaster Oilfield Services Plains Environmental Platinum Energy Services Corp. Polycore Tubular Linings Pongo Holdings Poplar Tree Inn Power Tech Industries Prairie Breeze Limousine Service Prairie Land Investment Service Ltd. Prairie Mud and Chemical Prairie PetroChem Prairie Rat Hole Prairie Western Reclamation Precision Well Servicing Pritchard Dieseltech

Prodahl Environmental Services Prowell Stimulation Services PTI Group Inc. Pukas Welding Pure Energy Services Purrfect Drycleaners PWM Steel Quantum Downhole R. French Transport Ltd. R. J. Hoffman R. L. Electric Racken Enterprises Radville & Dist. Health Foundation Rapid Rod Service Rec-Tech Power Products Red Hawk Well Servicing Red Head Equipment Redriver Lumber Ltd. Redvers Oilshow Regens Disposal Reliance Safety & Supply Re-Max - Lorna Pylychaty Re-Max - Wally Lorenz Richardson’s Jewellery Ridgid Oilfield Services Rigmanager Rising Sun Phoenix Robert Bevan Rocky Pine Oilfield Services Rogers Oil and Gas Inc. Ronin Fushion Welding Ron’s The Workwear Store Room by Room Furniture Rotex Energy Royal LePage - Leslie Smith Royal LePage Wheat Country Roy’s Transmission RSC Equipment Rentals Sabre Machining Safe-Tee Management Sam’s Trucking Sandi Zenter Equip. Sandpiper Truck Services Ltd. Sanjel SaskTel Savannah Well Servicing Schindel Ironworks Schlumberger Scope Production Developments Scott Land & Lease Ltd Senchuk Ford Sakes Ltd. Serenity Yoga Shellshock Oilfield Services Ltd. SIAST/Cansafe

Silver King Lodge Silver Spur Silverback Hydrovac Services Skinny Fish Media Smoke Em Diesel Sonar Inspection Sonic Oilfield Service Ltd. Source Energy Tool Services Inc. South East Electric Ltd. South Sask Builders Southeast Regional College Southeast Tree Care Souther Pressure Testers Southern Bolt Supply Southern Range Well Servicing Southern Spur Ent. Ltd. Spartan Trucking Spearing Service LP Spectra Financial Spectrum Land Services Spiral Lift Tools Ltd. SRI Homes SSEER Stage Oilfield Steam-Est Industries Ltd. Steel Energy Eagle Stellar Signs Stimtech Tubing Inspection Stoney Mountain Rentals Ltd Stuart Wright Ltd. Sun Country Well Servicing Sun Valley Land Sunbelt Sunset Embroidery Superior Propane Supreme Oilfield Construction Ltd. Sure Flow Oilfield Services Inc. Sure Tuf Svein Bryeide Construction Ltd. Swayzes Concrete T&T Oilfield T&C Oilfield Maintenance Ltd T.K. Trailers Tall Rig International Tam International Tanner Trucking Target Safety Services Tarpon Energy Techmation Electric& Controls TekSavvy Terry Wanner The Container Guy The Co-operators The Rig Store Three Star Environmental Three Star Trucking Tierra Alta Production

0. 1 f the abov 0 2 e companies for their continued support in

Systems Titan Logix Titanium Tubing Technology Ltd. Titus Tools/Conquest TNT Tank and Trailer TOP Tanks Total Oilfield Rentals Town of Arcola Town of Oxbow Town of Radville TransCanada Truck Wash Transco Energy Services Tremcar West Inc. Trenouth Family Holdings Ltd. Trican Trimount Developments Trophy & Engraving True Torq TSB Oilfield TSL Industries Turnbull RediMix United Centrifuge Village of Kitscoty Warren Steeves Waterflood Services Weatherford Artificial Lift Systems Weatherford Wireline Webb’s Office Equipment Westeel Western Star Trucks North Ltd. Weyburn Oil Show Wise Guys Oilfield Services Wood Country Work Source Solutions Wrangler Tanker Service Xtreme Oilfield

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PIPELINE NEWS December 2010

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Chamber leads ¿rst oil and gas show in Bonnyville Bonnyville –The first days of summer in 2011 will kick off the inaugural Bonnyville & District Oil and Gas Show to be held on June 22-23. Interest from oil and gas companies is beginning to heat up with the start of winter just weeks away. The show is the brainchild of the Bonnyville & District Chamber of Commerce that is organizing the event with the slogan, Fueling the Future. Robyn Ducharme, vice-president of the chamber, is the event chair while Tanya Van Buskirk, executive director, is the event committee director and spokesperson. “We are right in the heart of the oilsands, and we have a lot of service companies who have their operations out of Bonnyville,” said Van Buskirk. “We wanted to do more for that part of our community. Our community is thriving, and it’s largely due to the oil and gas industry. “As far as the chamber goes, in the past we have done a lot for our retail merchants who are thriving because of the oil and gas, but nothing has really been done for the oil and gas sector specifically. “The No. 1 driver of the economy is oil and

gas.” Bonnyville is home to the largest in-situ thermal oilsands projects in North America and boasts more than 60 national and international businesses pursuing a piece of the 210 billion barrels of oil resources in the Cold Lake deposit. The area has also one of the largest conventional heavy oil deposits in Canada. Bonnyville is an ideal location for an oil and gas show as it borders the Athabasca oilsands to the north, and sits upon a large natural gas field that was discovered in 1947. Imperial Oil, CNRL, Husky, Shell, Devon and Cenovus are among the major producers in the area where in-situ production is predominant. One of the newer players, Osum Oilsands Corp., plans to launch a pilot at Saleski in the first quarter of 2011 to test the application of SAGD in the Grosmont carbonate fairway. Osum also expects to receive regulatory approval for its Taiga thermal project in the Cold Lake area later in the year. Bonnyville oil companies can boast that in-situ operations result in much less land disturbance and eliminate the need for tailings ponds. Land reclamation also takes significantly less time than it does for sur-

face mining operations. “The local community is very excited to showcase what our area has to oﬀer,” said Van Buskirk, who notes the reaction to the show has been positive. “We ﬁrst did research at the Fort McMurray and Lloydminster shows to see what they do and also made some contacts, and let people know what we are doing. “A lot of people are saying ‘it’s about time someone did this here’ and ‘I can’t believe no one has done this sooner’ – that means a lot of work, but it’s totally worth it. ɸ Page B20

40249211•06/25/10

By Geoﬀ Lee

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PIPELINE NEWS December 2010

Not a trade show, but an oil & gas show ɺ Page B19 “We also want to increase our “People have tried to do it in chamber membership as well. We the past, and it’s turned into a genfigure we can’t expect oil and gas eral trade show. We are being very companies to be members if we particular about who we let in the don’t do anything specifically for show. We don’t want it to be a trade them.” show – it’s an oil and gas show.” Van Buskirk says if there is any The event will take place at the money left over from the show, it Bonnyville & District Centennial will go toward organizing the next Centre locally called the C2 Censhow already planned for 2013, and tre with two hockey rinks and a every two years after that on alfield house as the main venues. ternate years to the Lloydminster “Our exhibitor capacity inside Heavy Oil Show. the C2 is 140 and we are hoping “We did a lot research to make for 50 exhibitors outside,” said Van sure our show wasn’t interfering Buskirk. with any other oil and gas show “So we will set up the exhibits happening or any other sort of conin the arenas, and the field house ference,” said Van Buskirk. is where we will have our banquet “We are not trying to compete and exhibitors’ lounge and that with those shows. We want to comkind of thing.” plement them, and this is another Exhibitors’ fees include two area of our province and country tickets for a registration night barthat needs to be highlighted.” becue, two tickets for the event banVan Buskirk says the chamber There be no better place for a summer oil and gas show in Alberta than quet and complementary breakfast, has 225 members with many new Bonnyville, which is surrounded by some of the largest energy projects in lunch, and coffee breaks or people board members elected at the last Canada. The show will be held June 22-23. manning each booth. AGM in March to bring fresh ideas Two persons per booth will also to the show. be welcome to enter the exhibitors’ “The majority are new faces, so lounge at no charge. we have a very energized new board that is very passionate about our commuVan Buskirk also wants to make it clear that the oil and gas show is not a nity,” she said. fundraiser for the chamber. “Organizing the oil show is part of my job, and we have a fantastic commit“We have a couple of objectives,” she said. “One is to showcase and highlight tee of volunteers. The amount of volunteer hours going in to this is just incredthe businesses we already have in our area and create networking opportunities ible.” for them. A subcommittee is also hard at work lining up educational presenters who “The other is to highlight the area as a place where other companies would will speak in the lecture hall. Premier Ed Stelmach and Energy Minster Ron want to come and set up shop. It is a great place to live, work and play. Liepert top the list of invited dignitaries.

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Legacyâ&#x20AC;&#x2122;s production and resources increase Calgary â&#x20AC;&#x201C; The third quarter results of Legacy Oil and Gas Inc. show it is continuing to grow by the drill bit and acquisitions. Legacy said its upside is â&#x20AC;&#x153;no longer measured strictly by the depth of our light oil development drilling inventory, but by the breadth of other opportunities including recompletion, workovers, optimization and waterďŹ&#x201A;ood potential.â&#x20AC;? This is reďŹ&#x201A;ected in the main news of the quarter about Legacyâ&#x20AC;&#x2122;s completion of the acquisition of CanEra Resources Inc. in consideration of $233 million in cash and 20.5 million Legacy common shares, while assuming a net debt of $107.5 million. Legacy also boosted its production 503 per cent to 11,131 barrels of oil equivalent a day from 1,848 boepd compared to the same period in 2009. Production in the third quarter consisted of 80 per cent oil and natural gas liquids, and 20 per cent natural gas. Legacy also drilled 31 (20.3 net) wells in the quarter with 100 per cent drilling success. Of the total, the company drilled 10 (6.2 net) Bakken wells â&#x20AC;&#x201C; three (2.2 net) at Taylorton, four (3.9 net) at Heward/Stoughton and three at Kisbey/Star Valley. The company also drilled eight (2.8 net) will in the Torquay formation at Frys/Antler near the Manitoba border and 13 (11.4 net) into the Mississippian formation. The purchase of CanEra gives Legacy access to untapped resources in the historical Turner Valley OilďŹ eld in Alberta. The Energy Resources Conservation Board of Alberta estimates the original oil in place at 1.3 billion barrels with 1. 6 trillion cubic feet of gas in place since the ďŹ eld was discovered in 1913. The main Rundle producing zone was discovered in 1924. Legacy is encouraged by the fact

21 horizontal wells were drilled in the ďŹ eld between 1995 and 2005. The company believes the use of modern reservoir management techniques, and newly developed completion techniques including multi-stage fracturing, could lead to higher recovery factors. Early indications suggest a light sweet Cardium pool more than 11 miles in length and up to 1.5 miles wide. Legacy has recently completed and fracked the Cardium in an older Rundle vertical well and is in the process of recovering load oil and formation hydrocarbons. The company also has also cased the ďŹ rst of a three well vertical drilling program in Turner Valley targeting light oil. During the third quarter, Legacy also added to its land position in its two emerging light oil resource plays in Bottineau County, North Dakota, and Maxhamish, British Columbia. In North Dakota, Legacy is moving a drilling rig to spud the ďŹ rst of an initial three well program targeting the SpearďŹ sh formation and expects to have results by the end of the year along with three follow-up locations prepared. Legacy continues to work on evaluating the Chinkeh formation at Maxhamish B.C. during the winter drilling season. Plans are afoot to construct an all weather access road and multiwell pad to drill three or four horizontal wells. Legacyâ&#x20AC;&#x2122;s extensive light oil resource base is suited to enhanced oil recovery through waterďŹ&#x201A;oods and the company is continuing to assess pilot waterďŹ&#x201A;ood projects in the Bakken at Heward and Taylorton. Regulatory approval has been granted for the Taylorton waterďŹ&#x201A;ood. Meanwhile a â&#x20AC;&#x153;core ďŹ&#x201A;ooding studyâ&#x20AC;? of the Torquay zone at Antler/

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B22

PIPELINE NEWS December 2010

PTAC shows innovators where opportunities lie

Bruce Peachey, president and senior consultant of New Paradigm Engineering Ltd. in Edmonton delivered the bulk of a PTAC course at Lakeland College in Lloydminster. The presentation as on Heavy Oil Futures and opportunities for small to medium companies seeking to sell new products and technology to heavy oil producers such as Husky Energy. Photos by Geoff Lee

Lloydminster – Walking in your customers’ shoes may be the hardest step for entrepreneurs to take en route to getting a new product or technology implemented by the oil and gas sector. Petroleum Technology Alliance Canada knows that, and hosted a seminar/webinar at Lakeland College in Lloydminster on Oct. 21 to help innovative thinkers understand and meet the technology needs of the heavy oil industry. The PTAC Heavy Oil Futures session on oil and gas fundamentals for small- and medium-sized businesses was a primer on how to connect good ideas and people with the right end users. “The purpose of the course is to really help to educate and provide information to small to medium enterprises (SMEs) that are trying to supply technology to the oil and gas industry,” said instructor Bruce Peachey, one of the founding directors of PTAC. PTAC can help SMEs to eﬃciently get their new products developed, and supported through eﬀective technology demonstrations and pilots.

“We are trying to give them information that they normally not might know so it will help them sell their products easier to industry or help to engage industry to develop the products,” said Peachey. “PTAC plays a role as a facilitator, so we don’t directly fund projects. We try to bring people together that have ideas with people that have a need, and have funds to solve those needs. “Once the technology is ready to go into commercial application, we help companies find the funds or find a sponsor or find a test site to go and make it happen.” The Lloydminster event was the sixth in a series of webinars hosted by PTAC for SMEs, and the first one held outside of Calgary targeting innovators of heavy oil technology. “A lot of the oil companies are in Calgary, but a lot of the innovators are out in the field,” said Peachey. “Lloydminster is a logical place to go. There has been a lot of innovation here – a lot more than other areas. This is the first session outside of Calgary to get a broader audience. ɸ Page B23

PIPELINE NEWS December 2010

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Entrepreneurs and members of PTAC listen attentively to presentations from PTAC instructor, Bruce Peachey and Darrly Greening, operations superintendent for Husky Oil and Gas in Lloydminster, on how to present new ideas and technology to heavy oil producers.

Narrowing the gap for small entrepreneurs ɺ Page B22 “One of the reasons we are doing these courses is that often the small entrepreneurs may hear something about a problem, but they don’t really see it from the business side of the oil and gas producers. “We are trying to close that gap and help them understand what the drivers of the business are so they can do a better job of supplying technology to the businesses.” Registering for the course was a no-brainer for Heine Westergaard, who leads the business development and marketing for Kenilworth Combustion in the Lloydminster area and its innovative CSA 149.3 compliant burner packages. “I wanted to see the opportunities that were available,” said Westergaard. “I’ve been looking at doing quite a bit of research and development, and I thought this might an avenue to take and pursue.” Kenilworth has the only low NOx natural draft burner available on the market, according to Westergaard. “The acceptance of our product has been phenomenal,” said Westergaard. “We have seen a lot of development and growth on the emissions side. “It’s more emissions driven now. With the acceptance of the CSA 149.3 code, there is a lot more understanding that’s come to industry, and it’s basically due the awareness put out by PTAC and other organizations that are putting information out to people. “We have been involved with PTAC a little bit through Calgary and some of their eco-eﬃciency studies that they have been working on. “This is just another opportunity that they can do

something local.” When it comes to research, Westergaard said, “We have done everything pretty much on our own, but with the way industry is developing and changing and we are looking to expand. This is part of our expansion plan to look into what’s available on the other side.” Asked if he’s looking for money or contacts, Westergaard says he is open to both. Money is, in fact, what small companies usually lack to get their ideas oﬀ the ground, according to Ed Polukoshko, an industrial technology adviser from the National Research Council who was in attendance. “They obviously need technical people – engineers, scientists and technologists – they obviously cost money for salaries,” said Polukoshko. “They have to run pilot plants. It costs a lot of money to develop these technologies.” The NRC has been helping all types of Canadian companies to develop technology and new products for over 60 years. “We have been providing funding for about 25 years, and we were given a signiﬁcant increase in funding the last two years as part of the Harper government’s economic stimulus fund,” said Polukoshko. “We have worked with small businesses in Lloyd for quite a number of years like Universal industries, Corlac and Grit industries. These are all innovative companies in Lloyd.” Polukoshko is one of thousands of people on PTAC’s contact list to connect small organizations

with the right people. “We help them find the right people to talk with,” said Peachey. “We do that a lot through technology information sessions where someone with a new idea can put a project together and have a technology they want to introduce to the industry. “We get the right people into the room that may be collaborators or funders. They hear the presentation, and the presenter gets a list of the people who were there, and we ask for feedback if they are interested in following up and forming a project.” Networking was on the mind of Cal Broder, who is leading the development of environmentally sensitive cleaning technologies for this company, Chemviro Corp. in Wetaskiwin, Alberta. “I am looking for information on how deal with the oil companies, and be able to present our new technology to them,” he said prior to the start of the course. “We have a hydrocarbon emulsion separation technology that we can use to separate an emulsion of hydrocarbon in water and soil such as the mature fine tailings or MFTs of tailing ponds. “Today, I am looking for mostly contacts and opportunities to demonstrate the technology. The technology is in the demonstration stage right now. “The demonstration phase is very difficult to get through because most of the larger companies either don’t believe your technology will work until you get third party credentials or because they are too busy to look at it. “I am looking for the ability to open some doors with associations that have other ways of getting through those doors.”

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PIPELINE NEWS December 2010

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PIPELINE NEWS December 2010

Flowsur valve - “easy button” Lloydminster – Simplicity could be the new mother of invention. That’s the way it is for Vince Frazer’s invention of the Flowsur Valve that turns his job as a well operator for Gear Energy Ltd. into a kind of easy button. “It’s a monitoring and fail-safe device,” said Frazer, who works for Gear in the Lloydminster area. “The Flowsur Valve is a check valve that will tell you when it is closed so that you can check for any debris like pump rubbers caught in the valve. “There is also a timer that will shut the pump down if flow is stopped for any number of reasons, including if the intake is plugged or if the casing valve is closed.” If a pump goes down, fluid from an oil tank can flow back into the well, and the tank can catch fire if the fluid in the tank is lower than the burner and the fire tube. With the Flowsur Valve, if the timer doesn’t sense flow for five minutes or so, it will automatically shut the well down. “It’s more or less a cheap SCADA,” said Frazer. With some SCADA’s you have people watching the fluid in the tank. Once it stops, it could take an hour to notify you that it’s not pumping or the efficiency is low. “Even with a SCADA, you wouldn’t know there was an obstruction in the check valve until it was too late. This way, you can check it any time you want. “If they put one of these on, it will shut it down the well so it won’t burn the pump out.” Frazer got the idea after burning out a pump himself at work by “shooting the fluid level and shutting the casing gas in” which can lead to trouble. “When you do that, it builds up gas pressure in the casing and pushes the fluid level down and basically your pump is spinning dry,” he said. Frazer grew up in Tisdale, Sask., and has lived in Lloydminster since 1980. He launched his career as a welding

engineer, but decided that wasn’t his cup of tea. He tried his hand in oilfield work and water well drilling before choosing to specialize as a well operator – with an entrepreneurial mindset. “I am always looking at ways to make something that’s easier,” he said. “I have a few ideas that I am trying to get going. “Currently, I am testing out a two-inch check valve for gas. You can put it on a gas line and check that too.” Frazer formed his own company, FAVA Oilfield Technologies, to build a better check valve that involved modifying the level switch by changing the rod inside and attaching it to the flapper. Frazer machined a new top for the check valve that uses a standard two-inch level switch and fits a threeinch flow line. “Metaltek is the making the level switch, and I assemble them myself,” said Frazer, who caught a break with Gear Energy as his first buyer. “I have a couple in service now and on one of the wells it prolonged the life of the pump before the timers shut off and the pump burned out. One of the pumps went down, so I checked it to see why the valve was not closing. “I had the flowline pushed with fluid to try and clear any obstruction

• • •

in the check valve, and it still would not close. I took the top off the check valve and found a two-inch by one-inch piece of pump rubber wedged in the valve.” The applications for the Flowsur include heavy oil, light oil, gas and even water – anything that has a check valve and flow to it. The Flowsur is sold at the Rig Store in Estevan and by Frazer through his FAVA Oilfield company. On his days off, he travels to

places like Drayton Valley in Alberta to hand out brochures and drum up sales. Frazer hopes his product will morph into a full-time business, and he says the potential for sales is good. “I am trying to keep the costs down. If I can get bulk orders, everybody’s costs and my cost will be down,” he said. Frazer uses a 2,000-pound rated check valve and switch as his stock parts, and a patent is pending.

B25

Well operator and entrepreneur Vince Frazer is marketing a new Flowsur check valve he invented that allows operators to pump safer and check for debris in the valve.

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PIPELINE NEWS December 2010

Bonavista manager helps girls chase hockey dreams Lloydminster – The Alberta Major Bantam Female Hockey League is on an early growth rush in its second year of play in a 10-team league that includes the Lloydminster Europump IceCats. Helping to lead a breakaway season for the IceCats is assistant coach and area program director Steve Hughes who works as a regional production manager for Bonavista Energy Trust Ltd. Hughes is at the rink in Lloydminster four days a week, and that’s where he was eager to share his passion for the game and coaching as the IceCats laced up a for a mid-November weekend game against the Sherwood Park Royals.

Steve Hughes, one of three assistant coaches of the IceCats, gives some last minute instruction to a player in Lloydminster.

“It was a very positive year last year as the inaugural year,” said Hughes. “I think there was a lot of skepticism on what kind of product would be out there.

“We found out quickly that it is the best female athletes at bantam age in the province that have come together to play competitively all winter long.

“I think we are really proud of the fact the league had a successful year last year. We are working to build on that foundation. “Our league is the

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highest level that girls can play in at the bantam division. The league winner will be the provincial champion.” Players from the IceCats can move up to play for the local TripleA midget PWM Steelers, and from there, apply for scholarships or try out for the national team. The IceCats beat the Royals 4-0 and nipped the visiting Edmonton Lightning 3-2 the following day to boost their record to 6-6-1, and were tied for second in division standings. Although winning is fun, Hughes says the team’s coaching staﬀ puts the development of hockey and character skills on an equal footing for the players including Hughes’ 13 year-old daughter Kimberly who

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plays defence. “You get a huge satisfaction seeing the girls develop and become better players and understanding the game,” said Hughes. “The team sport – the team atmosphere – is a great quality to go through for all kinds of life lessons. “A huge part of the game is about moulding good people out of the process.” Hockey also had the same effect on Hughes who grew up playing minor hockey in his home town of Midale, Sask., and some AAA Midget hockey in Weyburn. In fact, he has been involved in the game for more than 40 years as a player, coach, manager and executive and says hockey is also in the blood of many managers at the Bonavista head office in Calgary. “I get all kinds of support,” said Hughes. “All of the management group in Calgary has a large degree of hockey in their background as well. They support community involvement. “I would have to say that through all my years in hockey and the oilpatch, that a large degree of people have come from a hockey background. “In the oilfield, you come across a lot of people in management positions because of maybe their background in hockey, and the involvement in that team aspect. They become very good people in the oilfield as well.” Hughes has been stick handling his way in the oilpatch for 32 years and has worked with Bonavista since the company was launched in Calgary in 1997. He moved to Lloydminster in 2001 after working a few years in northern Alberta. Bonavista is expected to average about 70,000 boepd in 2010 with a weighting of about 60 per cent in natural gas and 40 per cent in oil and liquids. Hughes manages all of the company’s heavy oil and gas producing properties on the eastern side of Alberta and the western edge of Saskatchewan. ɸ Page B27

PIPELINE NEWS December 2010

B27

" I get all kinds of support," says Hughes Éş Page B26 He also oversees about 30 operations personnel from Cold Lake and Lloydminster. He could easily draw up oďŹ&#x20AC;ensive and defensive plays for a Bonavista employee hockey team. He and his wife Joanne could also ice a family hockey team with their four daughters and two sons although only two daughters still live at home. â&#x20AC;&#x153;Hockey has been a part of my life for a long time, and my youngest daughter Kimberly wanted to play hockey at seven, so I got involved then with female hockey,â&#x20AC;? said Hughes â&#x20AC;&#x153;I got involved as a coach and a volunteer. I coached my boys in the â&#x20AC;&#x2122;90s, so I have been involved in hockey for a long time.â&#x20AC;? Asked if he noted any diďŹ&#x20AC;erences coaching girls and boys, Hughes said, â&#x20AC;&#x153;I think the girls from my perspective, seem to be more attentive. â&#x20AC;&#x153;They are actually eager to learn. From that perspective, itâ&#x20AC;&#x2122;s been really enjoyable, and you can see the development in the process. â&#x20AC;&#x153;The girls have to work hard at trying to get a better shot. Obviously, strength is the diďŹ&#x20AC;erence between the female and the male game, but I think thatâ&#x20AC;&#x2122;s coming, and itâ&#x20AC;&#x2122;s just time. I think before long, you will see girls at a younger age shooting the puck better,â&#x20AC;? he said. Hughes views his role as one of three assistant coaches as an opportunity to pick up bench skills from experienced head coach Derrick Howard. Howard has an advanced Level 1 National Coaching CertiďŹ cate and experience coaching the University of Alberta Pandas womenâ&#x20AC;&#x2122;s hockey team and the Lloydminster Triple A midget girlsâ&#x20AC;&#x2122; team in 2004-05. â&#x20AC;&#x153;I am just excited to have someone like that to learn from as well, and bring what I can bring from all my experiences in the game,â&#x20AC;? said Hughes. In his new IceCatsâ&#x20AC;&#x2122; program guide message as a director, Hughes thanks Europump Systems Inc. for their involvement as the teamâ&#x20AC;&#x2122;s major sponsor, and

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thanks a list of secondary sponsors who are named in the guide. â&#x20AC;&#x153;We approached Europump last year to become the major sponsor of the IceCats, and they were more than willing to,â&#x20AC;? said Hughes. â&#x20AC;&#x153;There are some really good hockey guys over there as well.â&#x20AC;? In fact, Dave Addie, one of the principle owners at Europump was a member of the Edmonton Investors Group that sold the Edmonton Oilers National Hockey League team to current owner Darly Katz. â&#x20AC;&#x153;Dave has always been excited about being involved in hockey, and had no problem helping us out as a sponsor,â&#x20AC;? said Hughes.

Steve Hughes, assistant coach of the Lloydminster IceCats, is excited about the teamâ&#x20AC;&#x2122;s prospects in the second season of the Alberta Major Bantam Female Hockey League.

B28

PIPELINE NEWS December 2010

B29

Petrobank to ramp up THAI production Calgary –Since predicting U.S. production would peak in 1970, those who fear the world is running out of oil as peak oil theorists have for decades can relax knowing heavy oil is going to be the key supplier of oil to the world. One of the major players in that global supply chain is Petrobank Energy and Resources Ltd. which estimates there are nine trillion barrels of heavy oil in place in the world. The Calgary-based company is expanding the use of its proven THAI (toe to heel air injection) technology to recover more oil from in its Kerrobert, Sask., and Dawson, Alta. heavy oil project lands. The company announced the $15 million cash purchase of the respective 50 per cent working interests in Kerrobert and Dawson THAI project properties from Baytex Energy Ltd. and Shell Canada on Oct. 19. The acquisition adds a combined 41 million barrels of conventional heavy oil in-place to Petrobank’s resources bank. The Kerrobert deal gives Petrobank a 100 per cent working interest in 38 million barrels of heavy conventional oil in-place, and maintains Petrobank’s joint venture with Baytex on their Phase-2 lands, discretionary lands, and the area of mutual interest. Baytex retains a gross overriding royalty on their working interest beginning 12 months after the first production from the Kerrobert Phase-1 expansion project using the THAI process. The Phase-1 expansion will include a further 10 THAI well pairs and surface facilities, following its two-well project using the THAI in-situ combustion process to recover heavy oil from the Waseca formation, 16 km southwest of Kerrobert. The target production for all 12 wells is approximately 7,200 bopd using THAI. In its news release, Petrobank says it is now able to “aggressively exploit its sizeable domestic resource base with its ground-breaking” THAI technology. With THAI, the zone around the horizontal wells is heated, conditioning the reservoir prior to air injection. Air is injected continuously initiating combustion in a formation such as an oilsands formation. As the burning front progresses, the mobile heavy oil and combustion gases including light hydrocarbons, drain to the zone around the horizontal production well by gravity and the pressure differential between the reservoir and the horizontal well. The production well collects heavy mobilized oil and vapourized reservoir water. These are carried to the surface with the combusted air where they are separated and treated. For larger reservoirs, progress can continue by drilling new wells at the heels of the old wells. Petrobank is targeting the start-up pre-heat ignition cycle during the first quarter of 2011 in the Phase 1 Kerrobert project. Air injection and production are expected to begin during the second quarter of 2011. The buyout of Shell’s interest in the Dawson project in northwest Alberta includes a100 per cent working interest in an addition 27 sections of land adjacent to Dawson, with prospective heavy oil resources from the Bluesky formation. The Bluesky formation has a resource potential of 70 billion barrels.

The acquisition adds a combined 41 million barrels of conventional heavy oil in-place to Petrobank’s resources bank

The transaction gives Petrobank a 100 per cent working interest in 44 mmbbls of conventional heavy oil in place. Petrobank will proceed with a two well THAI Dawson project following regulatory approval (application submitted in April 2009) with plans to target a minimal 10 additional well pairs in an expansion of the Dawson project. There is potential to scale up to a 25 well project at Dawson. There are numerous large, cold-producing projects in this area of the Peace River, and a growing industry interest in switching to conventional thermal recovery projects to improve production rates and resource recovery. ɸ Page B30

B30

PIPELINE NEWS December 2010

THAIâ&#x201E;˘ Process

Petrobank has demonstrated the success of its THAI heavy oil recovery technology at its Kerrobert, Saskatchewan and Dawson, Alberta lands, and plans to rapidly expand both projects with recent cash acquisitions. This graphic is from the November 2010 Petrobank corporate presentation.

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Éş Page B29 Existing conventional cold production techniques typically recover less than 10 per cent of the original-oilin-place but with THAI, Petrobank expects a

recovery potential of between 70 and 80 per cent. Petrobank says THAIâ&#x20AC;&#x2122;s demonstrated beneďŹ ts include lower capital costs with no steam and water handling facilities required. The technology comes at a lower operating cost with minimal consumption of natural gas and minimal water handling needs. The THAI process also has no net impact on water resources, and oil is partially upgraded during the recovery process. There is a reported 50 per cent reduction in greenhouse gas emissions from production to reďŹ ning and the technology comes with CO2 capture ready technology. In addition to Kerrobert and Dawson, Petrobank owns 100 per cent in 62 sections of oilsands leases with proved and probable reserves and best estimate of contingent resources of 669.1 mmbbls of oil.

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C-Section December 2010

Saskatchewan’s peak oil date still in question By Geoﬀ Lee Regina – Peak oil theory is based on the belief that oil production will eventually peak, as it did in the United States in the early 1970s, but that is not the case in Saskatchewan just yet. The point of no return in this province keeps getting pushed back due to new discoveries, and exploration, production and completion technologies. “Production out of Saskatchewan has tripled in the last 25 years,” said Ed Dancsok, assistant deputy minister of the Ministry of Energy and Resources’ petroleum and natural gas division. “When I started here in 1982, production was around 50 million barrels per year. In 2008, we set a record of 161 million barrels. “In 1982, the productive life index for the province – how many more years we have until the oil runs out – was 10 or 11 years. Of course, we are still producing oil, and we are producing more than ever.” Dancsok notes that exploration picked up substantially after the 1982 prediction at a rate that continues to allow new-found oil to replace what is produced in the past year. “In the past 10 years, oil production has been relatively ﬂat,” said Dancsok, who noted 2008 was a record year due to a lot of drilling and a lot of new wells coming on production. “We dropped a bit in 2009, and we’ll likely drop again in 2010, but that’s mainly because of the economic downturn,” he said. “There hasn’t been as much drilling going on, but as oil prices recover, there will be more drilling going on, and we will see our production numbers bounce back.” Saskatchewan is Canada’s second largest producer of oil and ranks third in natural gas production. The industry generated $9.6 billion in sales in 2009, with 70 per cent of produced oil exported to eastern Canada and the U.S. “I did an interview on peak oil in 2006, and at that time, the oil in-place number we had for Saskatchewan was 37.8 billion barrels with remaining re-

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Well counts and oil production have soared in the Upper and Lower Shaunavon formation in the southwest part of the province.

Ed Dancsok is assistant deputy minister of the Saskatchewan Ministry of Energy and Resources’ petroleum and natural gas division. File photo

serves sitting at 1.2 billion barrels,” said Dancsok. “Today, the oil in-place number is 45.6 billion barrels and our remaining reserves are still calculated at 1.2 billion barrels. Over that last four years, we have maintained the level of our remaining reserves. Dancsok was questioned why oil and gas companies need to spend millions of dollars for new enhanced oil recovery (EOR) techniques and technologies given the substantial reserves in the ground. “We have 45.6 billion barrels of oil in the ground, but only six billion barrels of that is recoverable through present technology,” he explained. “That leaves about 39 billion barrels of oil in the ground that we can’t get at yet.” Heavy oil represents 50 per cent of the resource base in the province, but of the 22.9 billion bbls of heavy oil found, over 20 billion barrels of that is still in the ground. “We really don’t have to go out and explore for oil in Saskatchewan,” said Dancsok. “All we have to do is find and improve upon present technologies, and just get at the oil that’s at our feet right now.” Dancsok says research and development is “hugely” important to achieve that goal. “Our premier (Brad Wall) and our minister (Bill Boyd) are keenly interested in Saskatchewan being a leader and coming up with new technologies and new ways to get at the oil.” The recent increase in oil activity in Saskatchewan has been technology driven through horizontal wells drilled into tight oil reservoirs and innovations in staged hydraulic fracturing techniques. The Petroleum Technology Research Centre (PTRC) in Regina continues to lead research in the Weyburn and Midale areas on the effectiveness of storing CO2 underground. Cenovus and Apache Canada are also using CO2 floods to recover medium oil from reservoirs from their Weyburn and Midale production units and extend their operational life by 25 years. ɸ Page C2

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PIPELINE NEWS December 2010

New technologies and techniques change the way everything is done

“

When I started here in 1982, production was around 50 million barrels per year. In 2008, we set a record of 161 million barrels

ɺ Page C1 The PTRC is also leading a $9.6 million research project on vapour extraction using solvent gas to extract heavy oil, and new methods of recovering all types of oil are popping up all the time. “Infill drilling is seen to be not just a method to accelerate the production from the reservoir, but infill drilling actually recovers more oil at the end of the day,” said Dancsok. “All of this is revitalizing oil fields. The Viking area near Kindersley was thought to be a depleted field and now has new life with dozens and dozens of horizontal wells going in there.” Horizontal wells in the Viking produced around 460,000 barrels of oil in 2009. “The Bakken play was discovered 50 years ago, but the technology wasn’t there to get it out of the ground,” added Dancsok. “The horizontal wells got that going. Where we were sitting at least than 1,000 barrels a day of Bakken production, we are now over 60,000 barrels of oil per day in about five years.” A similar story of success is being played out with technology in the Shaunavon play in southwest Saskatchewan where over 30 horizontal wells were drilled into the Lower Shaunavon in 2009 with production totalling over 840,000 barrels. There is also potential for technology to economically develop Saskatchewan’s oils sands which will add more reserves and push back the peak oil deadline further than expected. “There are going to be in-situ techniques that are going to be needed. There are a lot of challenges there,” said Dancsok. Danscok says the peak oil date also gets pushed by newer exploration techniques.

“The 3D seismic wasn’t around 20 years ago, and now it’s being used to ﬁnd these pools that perhaps these older exploration techniques were missing. “All of those technological things all add the fact we are moving out that date they call the peak oil,” he said. “It was ﬁrst proposed that peak would occur sometime between 1965 and the 1970s. That has been pushed back and they said it was occurring in 2004. It’s been pushed back all the time.” If the world does run into peak oil ahead of Saskatchewan, Dancsok says the province won’t become the world supplier of oil by any means. “We only have 45 billion barrels. That’s really a small number when you compare it to the oilsands (Alberta) that is sitting at 2.7 trillion barrels,” he

”

- Ed Dancsok

noted. “I have heard that peak oil, when it comes, is not going to be a point at which everything topples over and quickly declines. “I think there will be decades of what you might call horizontal movement in production where it will plateau for quite awhile – an undulating plateau I think is the word that I’ve heard. It will reach a certain point and go up and down, and that will be based on technological advances. “As the price goes up demand will fall. Those things have to be counted and I don’t think they have been in the peak oil theory. When the price goes up industry will ﬁnd new ways – they will use natural gas rather than oil to ﬁre their furnaces. “I have heard the best cure for high oil prices, is high oil prices,” Dancsok said in conclusion.

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PIPELINE NEWS December 2010

Peak oil theory not valid to heavy oil supply

By Geoff Lee Edmonton – The peak oil theory that suggests oil production will follow a bell-shaped curve with peak production rates at discovery, followed by a steady decline as the resource depletes, doesn’t yet apply to heavy oil. That’s the opinion of Bruce Peachey, president of New Paradigm Engineering Ltd. in Edmonton, who offered some proof during a follow-up interview to his seminar presentation on Heavy Oil Futures in Lloydminster on Oct. 21. Peachey delivered that presentation for the Petroleum Technology Alliance of Canada (PTAC) with a series of well-researched charts and graphs of heavy oil production that fit well into the topic of peak oil. “I think with heavy oil, there is a lot more of it. We’ve still only started to produce it,” said Peachey, who is also a sessional instructor for oil and gas property evaluation at the University of Alberta. “There is still a lot more of it out there worldwide. Some countries don’t even consider heavy oil to be a resource yet. It’s going to be a matter of what can be brought on reliably at the lowest cost,” he said. Although most production forecast charts for Western Canada assume a steady decline in heavy oil over time, Peachey says a steadying factor is that nearly nine per cent of Alberta’s oilsands are really heavy oil resources. ɸ Page C4

This chart of convention heavy oil (CHO) volumes shows the initial reserves in Saskatchewan and Alberta at 631 million cubic metres and 401 m3 in Alberta. The main methods of production are primary, cold heavy oil production with sand (CHOPS) and waterÁoods. Image submitted

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Industry has supplied anything that's demanded except during short blips ɺ Page C3 The Alberta Energy and Utilities Board estimates that surface mining production currently accounts for only 3.5 per cent of the total initial resource in place in the oilsands. This compares to 31 per cent which is found in deposits suitable for steam assisted gravity drainage (SAGD) and cyclic steam stimulation (CSS) production, and nine per cent for primary cold production. “The producers have an incentive because of the royalty treatment in the oilsands to develop more there than in conventional heavy oil areas,” said Peachey. Provincial royalty incentives don’t often apply in heavy oil regions outside the oilsands.

“Also, there is more to develop since there is a lot more acreage that can be produced from primary cold production in oilsands designated areas,” said Peachey. At three million barrels of oil per day using existing surface mining, thermal and primary cold production techniques, there may be enough heavy oil there for up to 190 years. The timeframe drops to between 30 and 72 years at eight million boepd for the oilsands, but Peachey is conﬁdent we won’t run out of heavy oil soon. “We’ve got lots of supply,” he said. “I think the whole peak oil thing is that, so far, the industry has been able to supply anything that’s demanded except

for short blips because of a war or something like that. The rest of the time, the industry has been able to deliver everything that’s demanded of it. “The peak in oil production is really a peak in demand that nobody is really demanding any more. “We had a big rise in demand in the U.S. because of the growth in numbers of people who commute, resulting in more gasoline being consumed. Eventually, you get to the point where people don’t want to spend more than four hours a day in their car, so demand levels off. “So the peak is more of a peak in demand than a peak in supply.” Peachey says the big question is what will happen in China and India, but he doesn’t believe these countries will follow the same demand-driven model of the U.S., where gasoline is king of the road. “They can’t afford to go the same route,” he said. “They have to invest in more public transportation and move more materials by rail than by road.” Peachey believes heavy oil production in Western Canada will be controlled more by market factors such as competition from cheaper producers. “I am more worried about Venezuela and Mexico all of a sudden getting their act together and producing more oil, and we will have to cut back just as we are cutting back on gas production,” he said. “Operating in Canada is more expensive than other places where heavy oil is produced. Venezuela – if it weren’t for their government being in such bad shape – if they were trying to produce to the maximum, they could produce it a lot cheaper than we could. It’s the same with Mexico.” Adding to Canada’s potential problems is the fact that most heavy oil upgraders are located in the U.S. Gulf Coast or the Caribbean, and many of them are party owned by Venezuela’s national oil company. “The capacity of those upgraders is what sets demand for heavy oil,” said Peachey. “If we try to produce more than those upgraders can take, the price goes down, which puts heavy oil at a disadvantage.” In his PTAC presentation, Peachey noted that some other challenges specific to heavy oil are low productivity per well compared to thermal and light oil wells, and the need to inform markets that not all heavy oil is mined. Also Alberta’s focus is on thermal oilsands production and mining, not heavy oil, while Saskatchewan’s focus is on light oil, enhanced oil recovery (EOR), and Bakken shale oil. Developing new economic EOR methods is essential to the conventional heavy oil industry in Saskatchewan and Alberta to get beyond their initial five to 10 per cent recovery rates. “The emphasis has always been on technology to increase recovery,” said Peachey. “Unfortunately, there is not much collaboration on production technology. Most of the collaboration is on environmental technology. “Production will continue if we get the technology, but it has to be economic.” He says new EOR methods such as solvents, SAGD, or VAPEX, or a hot water vapour process being developed through PTAC, are needed to boost cold heavy oil production in the Cold Lake/Elk Point/ Lindburgh regions of Alberta beyond the five to 10 per recovery rate. “That’s really the challenge for technology, that once you start producing you need to keep on producing,” he said. “The first production you get is the easiest to produce. After that, to increase recovery and get beyond the initial five to 10 per cent recovery, you have to do something else to get it out. It starts costing more to get more and more to get out. “The price of oil is the main regulator of what gets done. There is a limited amount you can produce at $30 a barrel, but as you get up to $80 a barrel, there is a lot more you can produce,” Peachey said.

PIPELINE NEWS December 2010

Husky opens doors to its innovative processes By Geoff Lee Lloydminster – Darryl Greening, operations superintendent for heavy oil and gas at Husky in Lloydminster, cracked the code for entrepreneurs seeking to present new ideas and technology to decision makers at Husky. The reveal took place at an innovation seminar for small businesses hosted by Petroleum Technology Alliance Canada at Lakeland College on Oct. 21. “At Husky we are always looking for new ideas and inventions,” said Greening near the end of his presentation on heavy oil challenges and opportunities. “If you have an enabler that would allow us to produce more oil and produce it more economically, we are certainly more receptive to your ideas. “If you know someone in Husky, and you think your idea has some merit, don’t be afraid. Bring it forward to them. Any individual can move it forward. “Just to put into perspective, the importance of innovation – the PC pump really was a game changer for us.” Greening, in fact, began his presentation on how a decision to implement a PC pump on an unproductive well in 1997 turned Husky’s fortunes around. That same well that produced just one cubic metre of oil per day from 1982 to 1986 when oil was just $8 per barrel, yielded 10 to 11 metres a day with the PC pump when that technology was relatively new. “Just to give perspective on the impact that change in technology – the PC pump had – in the first four years, it produced about 1,200 metres of oil,” said Greening. “From 1997 to 2010, it produced 60,000 metres of oil. A significant step change occurred with that technology change.” Greening says innovation is just as important now since production levelled off in 2004

and is in decline. “We are struggling to keep ahead of that decline no matter what we are doing with it – with the PC and CHOPS (cold heavy oil production with sand) approach,” he said. “The problem we have is declining production, fewer drilling location opportunities, fewer quality drilling locations, increasing capital costs, increased regulatory requirements, and increased public pressure.” Unlike 1986, when industry layoﬀs and bankruptcies were preva-

lent and Husky was in the red, today’s strong oil high prices are helping to oﬀset some production problems. “Consistently we are up in the $65 range for heavy oil,” said Greening. “It is a very lucrative business to be in. As a result of that, it’s made the short-term and the longterm look very good for us. “The short term is important to us to make it economical to produce these marginal wells.” Greening provided representatives from

small- and medium-sized businesses in the crowd with a look at some the short-term enablers and production opportunities Husky seek solutions for to stay productive and be ﬁnancially healthy. “We need pumping systems that do not require a service rig to remediate,” said Greening. “We need to improve our onsite energy utilization and our vent gas capture. “One area where we have done a good job on is to improve our onsite equipment reliability, but there is still room for im-

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provement.” Due to gases associated with heavy oil production, Greening noted Husky also needs cost effective oil production metering. “We have to get better at fluid handling efficiencies,” he added. “We need to be innovative because that is our single biggest cost driver today.” Ironically, Husky is going back to the use of the reciprocating pump on its low producing wells to minimize risk of pump damage due to

pump oﬀ. Some of its more innovative production enablers are three new steam assisted gravity drainage (SAGD) and cyclic steam stimulation (CSS) thermal projects due to kick oﬀ and cold enhanced oil recovery (EOR) projects using CO2 with propane and methane injection. “We have two pilots operating today,” said Greening. “In addition to that, we have two other pilots that we will start up in 2011.” ɸ Page C7

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PIPELINE NEWS December 2010

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PIPELINE NEWS December 2010

Keep capital costs down Éş Page C5 Husky is also using high volume lifts to produce heavy oil at high volume rates, but more innovative technology is needed to keep capital costs down. â&#x20AC;&#x153;If you have wells that have watered out, you stick a big pump in there and just â&#x20AC;&#x2DC;giddy up and go,â&#x20AC;&#x2122;â&#x20AC;? said Greening. â&#x20AC;&#x153;The trick behind that is how do you keep the capital costs down and manage your water?â&#x20AC;? Husky also uses waterďŹ&#x201A;oods and microbes for EOR as part of its commitment to innovation that Greening deďŹ nes as the implementation of an idea or product. The implementation of more internal and external ideas is assured thanks to an innovation process that Husky set up a couple of years ago. â&#x20AC;&#x153;It was really about improving all aspects of the heavy oil business for us,â&#x20AC;? said Greening. â&#x20AC;&#x153;We agreed to tap into our employeesâ&#x20AC;&#x2122; ideas so they have the ability to implement their ideas. â&#x20AC;&#x153;Everyone who works for the company wants to make a diďŹ&#x20AC;erence. We do need to have an innovative culture. If you are not looking for the next breakthrough, the chances of ďŹ nding it are pretty slim.â&#x20AC;? â&#x20AC;&#x153;We have reviewed about 375 ideas to date. There are far more good ideas than poor ones.â&#x20AC;? Greeningâ&#x20AC;&#x2122;s advice for small- and medium-sized businesses is to understand who the stakeholders are, and to understand what their needs are to solve a problem. He says itâ&#x20AC;&#x2122;s also important to communicate an idea or a new technology simply and clearly. â&#x20AC;&#x153;Donâ&#x20AC;&#x2122;t make an assumption the receiver will understand what you are selling,â&#x20AC;? said Greening. He also noted the importance of prototyping inventions and ideas. Greening detailed several cost-eďŹ&#x20AC;ective ideas or inventions that Husky has implemented before making a ďŹ nal reference to the importance that an innovation like the PC pump can mean to Husky and the communities the work in. â&#x20AC;&#x153;We were clearly in the red in the mid â&#x20AC;&#x2122;80â&#x20AC;&#x2122;s and into the â&#x20AC;&#x2122;90â&#x20AC;&#x2122;s,â&#x20AC;? said Greening. â&#x20AC;&#x153;It was not a very pretty picture. â&#x20AC;&#x153;When we look at 2008 when the price of oil was very high, we were the ďŹ&#x201A;agship for Husky Energy. We made tremendous proďŹ ts. â&#x20AC;&#x153;The impact on Lloydminster and other communities â&#x20AC;&#x201C; I donâ&#x20AC;&#x2122;t think people realize how big an impact that has. A large chunk of that cash goes into capital expenditures. â&#x20AC;&#x153;A large chunk of cash is spent on op ex every day. The bulk of that money is going right back into the community. It is a very lucrative business, and we want to keep it that way. Your innovative spirit is certainly welcome.â&#x20AC;?

Cal Broder, left, from Chemviro Corp., talks with presenter Darryl Greening, Huskyâ&#x20AC;&#x2122;s from Husky Heavy oil and gas in Lloydminster at the conclusion of a seminar for small- and medium- sized businesses that want to present new ideas and technology to heavy oil companies such as Husky.

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Potash spillover not likely By Geoﬀ Lee Lloydminster – Fog prevented Saskatchewan Premier Brad Wall from attending his own North West Regional fundraising dinner for the Saskatchewan Party in Lloydminster Oct. 28, but his message on the sale of the province’s potash resources came through loud and clear. Lloydminster MLA Tim McMillan stepped in for the premier to deliver a keynote speech on the government’s opposition to the sale of Potash Corp. to BHP Billiton Ltd. of Australia. The deal was killed by the federal government in early November, and BHP Billiton has withdrawn its oﬀer.

McMillan’s comments to the Pipeline News however, focused on the potential eﬀects of the issue on investment in the oil and gas sector in the province. “That was a consideration when we made this decision that we have,” said McMillan. “We have been very proactive to say to the oil and gas industry, by no means is Saskatchewan not a great place to invest. “Immediately after the premier’s speech at the Saskatchewan Chamber of Commerce last week, we sent e-mails out to every oil and gas company we do business with to ensure they knew our position and why we took it.” That speech by Premier Wall outlined a clear

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Michael Chisholm, MLA for Cutknife-Turtleford, took to the podium at the premier’s dinner for the Saskatchewan Party in Lloydminster. The next day Chisholm ofÀcially retired from the party during a nomination meeting in Maidstone for his replacement.

“No” from the province on the proposed PCS takeover. “I am sure oil and gas will look at the reason behind it, and I hope they feel comfortable with it,” McMillan said. In his speech, McMillan reported that the Conference Board of Canada studied the impact of the $38.6- billion U.S. hostile bid for Potash Corp., and concluded it would cost the province at least $3-billion in lost revenue over 10 years. As for the local reaction in his riding on the issue, McMillan notes it’s been very positive. “The people of Saskatchewan own the resource,” he said. “If a private company in Australia wants to buy one in Saskatchewan, it has to be a benefit to the people of Saskatchewan. That’s the criteria of the national review process. “When we had the Conference Board of Canada look at it, it wasn’t. It was about a $3 billion problem for the people of Saskatchewan.” When asked how potash compares with oil and gas revenues to the province, McMillan said, “Both are extremely important. “Two years ago, potash was very dominant in our provincial budget. Then last year it dropped off substantially while oil and gas has been very steady and growing for the last several years. “On any given year, they add up differently, but both are extremely important – revenues as well as employment.” McMillan says the premier’s short-term and long-term message to oil and gas investment in the province is that Saskatchewan is open to business regardless of the potash decision. The morning after the dinner, Wall flew to Toronto and New York to assure investors that they can continue to have confidence in investing in the province. Asked what his government would do if Husky Energy were taken over by a foreign company, McMillan paused and said, “I don’t want to get into hypotheticals.” ɸ Page C9

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PIPELINE NEWS December 2010

to dampen oil investment

Lloydminster MLA Tim McMillan delivered the keynote speech on behalf of Premier Brad Wall at the North West Regional premier’s dinner and fundraiser for the Saskatchewan Party in Lloydminster. Fog prevented Wall’s plane from landing.

in Canada is within the boundaries of one province,” he said. “So there’s a diﬀerence there, whereas, we know there is oil and gas in a number of provinces. The oil and gas industry has a long history, is pretty stable, and we feel pretty comfortable about it.” Among the people in attendance was Herb Cox, the new Saskatchewan Party candidate for The Battlefords. Cox won the nomination last April and continues to knock on doors in the riding to learn what’s important to local constituents. He reports the potash issue,

and its possible impact on the energy sector is not on the radar locally, “I can’t see that’s going to have an impact at this point in time from what I am hearing in The Battlefords,” he said. “I haven’t heard any backlash to that eﬀect. “The main thing on our minds in The Battlefords is we have the two power plants on the go which is great news. There is almost a billion dollars worth of infrastructure being built in The Battlefords.” Cox says the riding is also waiting for the expected approval to build a new psychological hospital in the city.

“We are hoping that comes to fruition. We are seeing an attitude and optimism in The Battlefords that we haven’t seen for years,” he said. If Cox gets elected in the next province election, he says the Saskatchewan Party will “continue to do the things we are doing. We

are upgrading infrastructure. “Brad (Wall) has been reducing taxes in diﬀerent sectors. We sent the signals out that we are open for business. We want people to come as they have for the past two and a half years. We think that’s going to continue even more so after the next election.”

ɺ Page C8 Lloydminster Mayor Jeff Mulligan jumped into that question, saying the nationality of the corporate ownership is not what counts. “It’s about their focus, what their values are and what are they committed to more so than where their head office may be located,” he said. Mulligan doesn’t think the potash issue will have an immediate impact on investment in the oil and gas industry in Saskatchewan, but he cautioned “I think the proof will be in the pudding in the next 24 months.” As for the fog that prevented the premier’s plane from landing in Lloydminster Mulligan said, “Twice a year for two weeks we get this fog issue. “I had it with my corporate plane with my last company (Common Wealth Credit Union) and we did run into this every once in awhile this time of the year. It’s a shame.” Among the 600 people who arrived on time was Cut Knife-Turtleford MLA Michael Chisholm who downplayed the potential impact of the potash decision on the oil and industry with one day left to go before he officially retired from the party. “Probably the biggest difference between oil and gas and the potash industry, is that virtually all of the potash

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PIPELINE NEWS December 2010

Wavefront creates publicity Lloydminster – Wavefront Technology Solutions Inc. is generating a wake of interest in its patented Primawave technology for the cleanup of contaminated groundwater at commercial, industrial and oilﬁeld sites. Primawave works the same way as Wavefront’s better known Powerwave technology used extensively for well stimulation and secondary or tertiary oil recovery. Powerwave increases oil recovery by optimizing the performance of existing methods such as chemical enhanced oil recovery technologies, liquid

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CO2 injection, water injection, and surfactant/polymer flooding. Both systems use powerful fluid pulses to momentarily expand the pore structure in rock and soil formations which improves liquid flow in the ground. Pipeline News caught up with Wavefront’s vicepresident, Tor Meling, at the Lloydminster Heavy Oil Show Sept 15-16 to ask him about the reaction of the market to Primawave. “We have had reasonably rapid growth in both the environmental sector and also in the oil sector with new projects all over North America and we are also looking at international projects,” said Meling. “In the last few years, we’ve done projects in North America, Europe and Australia, so I would say yes, it’s definitely growing in usage in the industry. Wavefront is based in Edmonton and specializes in developing and designing leading-edge techniques and tools for oil well stimulation, improved oil production and environmental groundwater remediation. The company also has a Sand Pumps and Rentals Ltd. division in Lloydminster and offices in Calgary; Cambridge, Ontario; Houston, Texas and Raleigh, North Carolina to market its main Powerwave and Primawave technologies. “The difference between the oil sector and the environmental business when it comes to recovery is that the environmental business has only one result that’s acceptable and that’s 100 per cent recovery,” explained Meling. “That’s because the site will still be contaminated if you’ve got 15 per cent of oil left.”

A press kit of case studies proves Primawave is an eﬀective solution for environmental remediation projects recovering contaminants or doing in-situ remediation work. Contaminants such as dry cleaning ﬂuids, oil, creosote, or gasoline that have leaked from a fuel tank are harmful if they enter the drinking water supply. ɸ Page C11

Tyler Scott, manager of Wavefront’s Sand Pumps and Rentals Ltd. division in Lloydminster, Àelded questions about pumps during the Lloydminster Heavy Oil Show.

PIPELINE NEWS December 2010

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wake with Primawave ɺ Page C10 Primawave can treat contaminated underground sites even in locations that are difficult to access. “There are mainly two methods of removing ground water contamination,” said Meling. “One is injecting an in-situ remediation, i.e. something that will react with the contaminant and destroy it, and basically render it harmless. “The second is very similar to what we do in the oilfield with Powerwave which is a waterflood. You inject water into the formation and you sweep the contaminants towards your production wells. “You produce the groundwater plus the contaminants, and then you clean up the contaminants out of the water and re-inject the process until you have cleaned the site up,” he said. “The Primawave process is the same fundamental pulse injection process that we use in the oil industry. “Wavefront is using this to improve the sweep efficiency. It basically optimizes the process of recovering or injecting fluids,” Meling said. Primawave is normally used at or just below the water table and generates fluid pulses at a lower pressure for environmental applications compared to 250 psi differentials for waterfloods in the oil industry. “The whole objective is to divert fluids away from the path of least resistance without damaging the formation that the contaminates are in,” said Meling. Recovery of contaminants such as creosote can be optimized by injecting specific chemicals which lowers what’s called the interfacial tension and greatly enhances the recovery. Wavefront will use one of several injection tools at its disposal that is best suited to the application

Tor Meling, vice-president of Wavefront Technology Solutions Inc. who works in Calgary, explains the working of the company’s Primawave technology for treating contaminated ground water at the Lloydminster Heavy Oil Show. Photo by Geoff Lee

that they are working at the time. Meling says Powerwave and Primawave are effective at doing their respective tasks of increasing oilﬁeld production and enhancing the treatment of contaminated groundwater while boosting the bottom line for clients. “If you look at the value proposition of Powerwave and Primawave that Wavefront supplies to the oil industry and the environmental industry, it’s a diﬀerent value proposition,” said Meling.

“In the oil sector, we basically increase production; we increase revenue ﬂow and increase the balance sheet by adding reserves. “In the environmental business, the company that has the contaminated site has an environmental liability. What we do is minimize the cost of remediating, and basically get rid of that liability. “It’s a cost minimization and an optimization of the project to clean the site up – not necessarily making more money,” he said.

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PIPELINE NEWS December 2010

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SIAST/Cansafe eager to expand Aboriginal oil¿eld training Prince Albert – SIAST students enrolled in a fall Oil and Gas Production Operator certificate course at the Woodland Campus in Prince Albert will be workboot-ready for employment before Christmas. The course, now into its second offering from Oct. 18 to Dec. 10, is taught by Cansafe Safety Services from Lloydminster, with most of the students having an aboriginal heritage. The course is the result of SIAST partnering with NAIT for the right to run the program in Saskatchewan, with Cansafe onboard to deliver the core program along with a bundle of 10 safety tickets and job readiness courses. “They have been an excellent partner,” said Les Erikson, continuing education consultant at SIAST. “They provide a good range of occupational health and safety courses, and have excellent knowledge of the industry.” The initial program ran successfully from May 3 to June 25, and the college wants industry to know another batch of oilfield graduates is ready for hire. “The first course went very well,” said Erikson. “We had a pretty good uptake by industry of the grads. I know from talking to a number of the grads, they are continuing to work in the industry and doing well. “We are hoping to get more feedback from industry with an ad we are placing in the Pipeline News. The ad is really targeted on the

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employers to let them know the course is on and grads will be coming on stream soon. “We just want to let industry know the program is going on, and if they are looking for employees to give us a call. We want to establish a presence in the industry. “People need industry speciﬁc knowledge and skills to be able to work safely and productively. “We are very proud of the partnerships we have established to bring high-quality training courses and expertise to Saskatchewan,” Erikson said. SIAST is currently talking with other colleges throughout Saskatchewan to test the demand for additional courses to be delivered by Cansafe in the coming months. “The course particularly helps those individuals with no experience in the industry, but who need a good base knowledge combined with the proper type of safety tickets to make them employable, and be able to go to work,” said Brian Norwood, Cansafe owner and a course instructor. ɸ Page C14 Brian Norwood, owner of Cansafe Safety Services, demonstrates the workings of a self-retracting life line at a safety course in Lloydminster. During a break, Norwood was pleased to talk about his company’s role with SIAST delivering an oilÀeld training course that prepares workers mainly from the Aboriginal labour pool for jobs.

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PIPELINE NEWS December 2010

Painted Pony’s ¿rst horizontal Bakken well Painted Pony Petroleum Ltd. says its first Bakken horizontal well in the Flat Lake area of southeast Saskatchewan has tested at 208 bbls of oil per day and the company has entered into an agreement to acquire 5.25 net sections of land within its Midale core area. The Bakken discovery well, CPEC et al Flat Lake HZ 3B5-10-4B5-9-1-16 W2M (35 per cent working interest) flowed at an average restricted rate of 208 bpd for a 24 hour period following five days of continuous testing. The well was shut-in tempo-

rarily in order to prepare it for production. This is the first well drilled in the company's new Flat Lake core area, which was acquired through a farm-in arrangement. Through participation in the well, Painted Pony now has a contiguous block of 6,000 net acres (9.4 sections), all of which is Crown land that will receive Saskatchewan's deep horizontal royalty incentive on the first 100,680 bbls produced per horizontal well. The Flat Lake asset provides a significant increase to the company's Bakken drilling inventory.

In the company's Midale core producing area, an agreement has been reached to acquire 3,349 net acres (5.25 sections) of 100 per cent working interest lands with Bakken rights for $1.8 million. These Crown lands will receive Saskatchewan's deep horizontal royalty incentive on the ﬁrst 100,680 bbls produced per horizontal well. The lands are contiguous to Painted Pony's existing producing assets. The additional acreage provides signiﬁcant development opportunities and synergies with the company's existing infrastructure.

Opportunities are being created in sector ɺ Page C13 “It will teach them the basics of how oil rigs work; the basic concepts of petroleum geology; how service rigs work, and a basic understanding of how battery and gas plant operations work. “The course is eight weeks, and there is a considerable amount of home study to get the marks you need to get through.” “We do courses throughout Western Canada, and we did a project in the Middle East a few years ago. About 80 per cent of our training is done within

300 km of Lloydminster.” “The oil and gas industry is expanding in Saskatchewan. Business and employment opportunities are being created in the exploration, drilling, service and refining sectors,” said Erikson. “People need industry specific knowledge and skills to be able to work safely and productively. We are very proud of the partnerships we have established to bring high-quality training courses and expertise to Saskatchewan.” Erikson hopes the program will be offered throughout SIAST con-

tinuing education programming by 2011-12 but there are no con-

“

”

- Les Erikson

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tion. Canada is facing – whether we like it or not – the need to bring in a tremendous amount of immigrant population as our baby boomer population retires. “Somebody has to service the community, and there are a lot of job openings happening. We think it is better that we use our own local native population. “It doesn’t mean we are against bringing in people from other countries, but why wouldn’t we use our own native population?” Cansafe also in1 certificate, OH&S cludes employment readcertificates and a SIAST iness tutorials, job search statement of attendance. techniques, resume writ“After they graduate, ing, interview skills and they can continue with communication skills self correspondence and but no job shadowing or complete the second, on the job training in the third and fourth levels to program. become fully certified,” “What we’ve found said Norwood. is, the course is so com“There is a huge un- prehensive that inditapped labour market viduals do not have any in the native popula- problem finding full-

People need industry speciﬁc knowledge and skills to be able to work safely and productively

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time permanent employment in the ﬁeld,” said Norwood, who has been working with SIAST for more than 10 years on safety training. “I have a reputation of working eﬀectively in the native community with safety training,” he said. “When they acquired the rights (from NAIT), and they needed somebody who could deliver on the oil and gas, they contacted us, and I am pleased to say we are working with them.” Cansafe is a specialized training company with a niche in accident investigation and the development of safety programs with the focus on oil and gas and related industries such as transportation and service operations. “Cansafe has a 20year reputation and I think we have earned the respect of the industry,” said Norwood.

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PIPELINE NEWS December 2010

Lakeland and employers recruit over two days Chris Thompson, left, a heavy equipment instructor, helps Kaitlin Sylvestre with a wire repair demo.

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Lloydminster â&#x20AC;&#x201C; The art of the handshake was in focus during a Lakeland College Open House and Career Fair that brought potential new students, job seekers and employers together at the Vermilion campus Oct. 19 and the Lloydminster campus Oct. 20. â&#x20AC;&#x153;The main purpose of the job fair is to bring in employers speciďŹ c to the programs that we oďŹ&#x20AC;er at Lakeland,â&#x20AC;? said Leanne GriďŹ&#x192;ths, student employment adviser. â&#x20AC;&#x153;We hold it in conjunction with our open house so we also have high schools come in and have the opportunity to network and ask the employers questions. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think itâ&#x20AC;&#x2122;s ever too early for students to start networking with employers.â&#x20AC;? The meet and greet event in Lloydminster included representatives from Lakeland programs including Allen Verbeek, chairman of agricultural and environmental sciences, from the Vermilion campus. â&#x20AC;&#x153;This is a great opportunity for us to put all the programs we do out there for the public to see, and for students to gain some interest and ask us some questions about the programs, and what the potential salary potential is,â&#x20AC;? he said. â&#x20AC;&#x153;We can tell them about our national accreditation for our bachelor of applied science in environmental management degree. We are one of four environmental programs to achieve national accreditation. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s an opportunity to talk about that, and talk about renewable energy and conservation programs. â&#x20AC;&#x153;People can come in and ďŹ nd out about the program, and also go into the gym and see a lot of the diďŹ&#x20AC;erent companies that would employ our studentsâ&#x20AC;? said Verbeek. Representatives from Tartan Construction Ltd., Husky Energy, Ensign Energy Services Inc., and Flint Fluid Hauling Services Ltd. were on hand in Lloydminster to ďŹ eld questions or accept resumes. â&#x20AC;&#x153;Why Tartan comes to these career fairs is because we are always an expanding company and we are looking for some good recruits,â&#x20AC;? said Warren Hobart, business development manager from Conklin, Alberta. É¸ Page C17

PIPELINE NEWS December 2010

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Showing the public what opportunities are available ɺ Page C16 Tartan Construction and Lloydminster Maintenance Ltd. are independently managed members of the Tartan Group of Companies that provide field and plant maintenance services, including contract maintenance and operations, turnarounds, and capital projects. It was no surprise to Hobart to see a lot of student interest in Tartan, especially from students in the in the heavy oil operations technicians program based in Lloydminster. “Interest from them working for Tartan is always good,” he said. “We are a locally-based and locally-owned company. “We have been providing good low rates and a safe environment since 1953, so most local people know us. I think that’s why a lot of them would like to work for us. “Mostly, we are looking for trades-type people, but the company is growing larger and larger each year. “When a company is growing – we also need administrative staff We are looking to increase our work pool.” Flint Fluid Hauling also put recruitment top of mind at the open house and career fair to fill some of their 32 available positions from Vermilion to Turtleford. “I guess the big thing we want to do today is get our name out there and show the public the opportunities that are available,” said Jason Oldford, senior co-ordinator of Flint’s pressure and vac division in Lashburn. “We are receiving resumes today looking for qualified operators. We are willing to train new people. “If we have some individuals with their Class 1 or Class 3 training, we are willing to take them from there and hopefully, get them into a career path that will work for them and us.” Flint provides pressure, vacuum, and fluid hauling services in British Columbia, Alberta and Saskatchewan and is recruiting for electricians, truck drivers and any kind of apprenticeship trade. “We are looking at receiving resumes, and we have been having some suc-

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cess the last couple of days,” said Oldford. “We encourage high school students to look at this kind of atmosphere and see what’s available for them.” Husky Energy was also on hand to fly the flag and inform visitors of their hiring needs and application processes. “Lakeland College provides training for different skill sets and Husky, of course, employs many different skill sets, so we are just here to show that we are a company within the LloydminAllen Verbeek, chair of agricultural and ster area,” said Connie Riess, HR environmental sciences, welcomed the service rep in Lloydminster. open house and career fair to promote “We are just letting the stuLakeland College’s environmental prodents know what kind of emgrams at the Vermilion campus. ployment is available at Husky. We are letting students know what our web address is and instructing them to go and check us online.” The event also included some try-a-trade demos and information exhibits from the School of Trades and Technology in Vermilion. “Basically, we are here to offer our program to the community,” said Owen Lakusta, one of the welding instructors on hand who reported the response was good in Vermilion where the trades classes are offered. “The response was good in Vermilion. We have seen quite a few high school students come through.” Lakeland offers pre-employment welding and one, two and three year apprenticeships.

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PIPELINE NEWS December 2010

Wainwright bonspiel an early sign of winter fun Lloydminster – In the Wainwright addition of some younger guys on the area of Alberta, there are two early 12-person organizing committee. signs of winter. “I think it will drive excitement One is the sight of birds flying for next year,” said Bishop who added south. The other is men with brooms “we just want to keep it going,” but not skipping into the Wainwright Curling just for the fun and charity causes. Club for the perennial Oilmen’s Bon“The other thing the bonspiel rd spiel that went ahead for the 33 time does is, it really kicks off the year for Nov. 5-7 while there were migrating the curling club as well. We get some birds in the sky. revenue with bar sales – we rent the “It’s always been the first full ice. weekend of November so we are plan“That’s why it’s important to keep ning for that next year as well,” said it going from one year to the next. I Bob Bishop, bonspiel organizing secthink all bonspiels are getting tougher retary, who works as a field manager Travis Smith from Harvest Energy congratulates the D & C Melin Trucking to fill. I think curling will come back. rink of Colin Tanton, Mark Rajotte, Dustin Small and Dallas Melin who were It’s in a bit of a lull right now. for Baker Petrolite. “We had 20 teams this year. We this year’s A-Event champs at this year’s Wainwright Oilmen’s Bonspiel. “Typically, this is a busy time of Photo submitted were down a couple of teams. We had the year with a lot of things going on. to compete with an out of town hockA lot of parents are involved with kids ey tournament that same weekend. That hurt us for a couple of teams.” in hockey. I think that probably hurt us a bit.” Bishop also attributed the smaller turnout to oil companies catching up on Bishop says it’s also been a busy year at Baker Petrolite, a business that services work lost to a wet September, but those who did show up kept the tournament in oil and gas customers in and around Provost, Lloydminster, Consort, Wainwright motion, and gave back to local charities. and Edgerton. “We managed to make ’er go and we kept our head above water,” said Bishop Baker Petrolite is a division of Baker Hughes, a company that provides comwho was pleased with the outcome on and off the ice. pletion, intervention and production solutions to oil and gas companies globally to “We had four events, and we had our banquet and silent auction. We had good maximize recovery. support from the community again to try to raise some money. If we make any “We sell emulsifiers, corrosion inhibitors – all specialty chemicals. It has been money on our bonspiel, it goes to a number of local charities. busy this year. It hasn’t been a bad year at all for us,” said Bishop who always finds “We added the silent auction about five years ago which allows us to raise time for the bonspiel. a little extra money and be able to put the money back into the community,” he In fact Bishop, skipped his Baker Petrolite Wainwright-1 team with Barr said. Humphreys, Ryan Humphreys and Damon Zajic on board to the B-Event title Instead of asking local businesses to donate prizes to give away to teams, the and bragging rights for a full year. tournament committee looks to solicit one item from a business for the silent aucOn the ice, each team played three draws a day with the D & C Melin Trucktion, while team prizes are purchased by the committee. ing rink of Colin Tanton, Mark Rajotte, Dustin Small, and Dallas Melin claiming This year’s event included the popular banquet hosted by the Elks’ volunteer the A-Event trophy. organization at their local hall. The Baker Petrolite Provost-3 foursome of Dale Gibb, Warren Spornitz, Jim “They look after the food, the booze, the cleanup, everything with a one stop Saubuk, and Dennis Gibb swept its way to the C-Event championship. shop,” said Bishop. “We really like supporting the Elks as well.” The Weatherford Engineered Chemistry group of Trevor Currier, Ryan HeathBishop thinks next year’s bonspiel could be back on a growth track with the er, Colin Swanson, and Eric Heather combined to capture the final D-Event title.

PIPELINE NEWS December 2010

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Husky ups capital spending in effort to pursue growth

The pipeline breakage this summer of the Enbridge 6A/6B lines in Michigan and the fall maintenance turnaround at the Lloydminster Husky Upgrader, above, cut Husky’s total North American reÀnery and upgrader throughput in the third quarter of 2010. Photo by Brian Zinchuk

Calgary – Husky Energy Inc. is stepping up its 2010 capital spending to $4 billion from its previously planned $3.1 billion outlay with current fourth operations focusing on short-term production growth as previously reported. Most of the increase in spending will advance the development of Husky’s existing assets in its upstream sector along with its acquisitions that provide short-term production gains to boost profitability. “We will continue disciplined, step-wise development of our assets as we focus on near-term production growth while advancing our rich and diverse portfolio of mid to long-term value generating assets,” said CEO Asim Ghosh in the release of third quarter results. The third quarter was notable for the impact of the Enbridge Line 6A/6B shutdown, estimated at $36 million after tax on net earnings of $257 million. The Enbridge pipeline break in Michigan last summer, and the major maintenance turnaround at the Lloydminster Husky Upgrader clipped Husky’s total U.S. and Canadian refinery and upgrader throughput to 249,700 bopd compared with 303,300 bopd in the same period of 2009. Despite those setbacks, total oil production before royalties averaged 288,000 bopd for the quarter compared to 276,200 bopd in 2009. The previously announced Foothills natural gas asset acquisition – which added 10,800 bopd equivalent a day of production and 37 million barrels of oil equivalent of proved reserves – is expected to close in the fourth quarter, pending approvals. Husky said it continues to build its portfolio of gas resource plays and acquired additional land in the Ansell area of the Alberta Deep Basin, and the Bivouac area of northeast British Columbia. “Husky is progressing development drilling in the Bivouac and Galloway areas with an additional three Bivouac and five Galloway wells to be completed by the end of 2010 with production expected in the second quarter of 2011,” said Husky. In the third quarter, four Cardium development wells were drilled in Alberta, and six exploration wells were spudded to test the deeper multi-zone potential. Drilling and completion operations are expected to continue for the remainder of 2010 and into 2011. In southwest Saskatchewan, Husky placed three Viking wells on production in the third quarter. In addition, eight Viking horizontal wells were drilled at Redwater, Alberta, and an additional seven wells are planned for the remainder of the year. Husky participated in a well in the Grizzly Valley of the B.C. foothills in the third quarter. The well successfully tested at a rate of 33 mmcf per day and a tie-in of the well is expected to be completed in early 2011. Husky also plans to continue using alkaline surfactant polymer (ASP) technology to enhance oil recovery from ongoing projects in southern Alberta and

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Saskatchewan and in future ﬂoods under development including those in Fosterton and Bone Creek, Sask. Total production from ASP projects reached 3,100 bopd in the third quarter. Husky continued to pioneer the use of drilling horizontal wells into thinner heavy oil reservoirs with 28 horizontal drilled in the third quarter, and 100 horizontal wells on tap by the end of 2010. Construction of the Pikes Peak South thermal project east of Lloydminster Sask. was approximately 37 per cent complete at the end of the third quarter. This project is progressing on schedule, with production expected to commence in the second quarter of 2012. In other news, the Husky Sunrise Energy project Phase 1, located 60 km northeast of Fort McMurray is planned for approval in late 2010 and ﬁrst oil is expected in 2014. At the Tucker Oil Sands project, 30 km northwest of Cold Lake, three newly designed well pairs commenced production Husky also received regulatory approval for a thermal recovery pilot project at the McMullen oils sands lease in the west central region of the Athabasca oil sands.

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C20

PIPELINE NEWS December 2010

Career Opportunities 3A & 1A Drivers/ Owner Operators/ Mechanics

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Please forward resume with copies of tickets to: resumes@targetsafety.ca or fax to 780-870-5359

VACANCY USED TRUCK SALES REPRESENTATIVE - ESTEVAN We have an exciting opportunity for a Used Truck Sales Person in Estevan. In this position you will be using your sales and marketing skills to forge strong relationships with customers who rely on your expertise and service for their success. You will be qualifying and serving a wide range of customers with different needs. Your approach begins with genuine care to understand the challenges faced by your customers. Your key initiatives will be to assist your customers in identifying underlying issues and to recommend viable solutions. During your Àrst year, you would develop a plan to aggressively improve performance, implement strategies to satisfy customer needs, forge relationships, and develop a quality customer database. You are an enterprising team player who enjoys healthy competition and collaboration. You are conÀdent knowing your long-term success begins with the success and satisfaction of your customers. We offer an attractive compensation package that correlates with performance. Are you up to the challenge? If you have the desire and skills to make this happen we want to speak with you. Please submit your résumé and a cover letter to:

Careers Human Resources Department Email: careers@frontierpeterbilt.com Fax: (306) 244-2879

Essential Coil & Stimulation Services is a company recognized for safety and excellence with in the oil and gas industry. We strive to provide a good working relationship with our customers. Currently we provide services throughout Alberta and Southern Saskatchewan. Essential Coil offers competitive wages, scheduled days off, group beneÀt plan and employee savings plan. If you are an energetic team player with superb attention to detail and strong communication skills, we invite you to apply for the following positions at our Weyburn location:

Coil Tubing Operators Coil Tubing Helpers Class 1 driver’s license is preferred, but all class of drivers are welcome to apply. Previous oil Àeld experience & valid tickets are an asset Email or fax your resume & a current driver’s abstract to: tschwab@essentialcoil.com Fax: 306-842-8906

Fax: (780) 872-5239 Now Hiring for the following positions:

JOURNEYMEN ELECTRICIANS APPRENTICES (no experience required)

HSE COORDINATOR Require safety certiÀcates & valid drivers licence. Competitive wages and RRSP plan & full beneÀts package offered.

Fax resume to 637-2181 or deliver to: 62 Devonian Street, Estevan, Sk.

PIPELINE NEWS December 2010

C21

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Become part of a fantastic team and work in a State-of-the-Art Manufacturing Facility Apply To:

metaltek@telus.net Fax: 780-872-5239

To submit a resume or if you have any questions please contact:

TAQA NORTH Ltd. is ranked among the top 12 largest oil and gas producers in Canada with production of approximately 90,000 boe/d. TAQA NORTH is a subsidiary of the Abu Dhabi National Energy Company (TAQA) and has a strategic role to play in helping TAQA become a best-in-class developer and operator of upstream assets. Our corporate ofÀce is located in Calgary, and Àeld operations located in Alberta, British Columbia, Saskatchewan, Ontario, Montana, North Dakota, and Wyoming. TAQA NORTH offers excellent rewards programs such as competitive base salaries, short and long term incentive programs, 100% employer paid medical and dental beneÀt premiums, an RRSP/Savings Plan, a top tier vacation and Áex day policy, a Àtness allowance and more! These, along with being committed to acting as a socially responsible player in every community we operate in and our progressive initiatives such as Student Scholarships and our Community Investment has earned us the honour of being one of Alberta’s Top 50 Employers.

Bulk Plant Personnel and Shop Hand Nitrogen Operators & Supervisors Heavy Duty Mechanics Heavy Duty Mechanics (2nd or 3rd year apprentice) Parts Person

Due to our aggressive growth strategy, TAQA NORTH currently has the following positions available for professionals based in the Estevan region:

Journeyman Instrumentation Mechanic The Journeyman Instrumentation Mechanic reports to the area Maintenance Foreman and is responsible for providing instrumentation support to the southern Saskatchewan region. The ideal candidate will have over 10 years of oil & gas industry experience, along with strong maintenance software and PLC experience. Dual ticketed tradespersons will be given preference. For additional details, please visit our website at www.taqaglobal.com. Interested candidates are welcome to apply to careers@taqa.ca referencing the “Estevan Instrumentation” in the email subject heading.

We thank you for your interest, however, only those selected for an interview will be contacted and only individual applicants will be considered at this time.

C22

PIPELINE NEWS December 2010

Resources Guide

Saskatchewan Owned & Operated

Maintenance

Cell numbers: 483-8024, 483-7024, 483-8148 Home: 486-2143 â&#x20AC;˘ Fax: 486-4855

Box 12 Frobisher, SK. S0C 0Y0 merv_and_deb@xplornet.ca

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Dale (306) 861-3635 â&#x20AC;˘ Lee (306) 577-7042 Lampman, Sask. a l t u s g e o m a t i c s . c o m

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â&#x20AC;˘ Pressure Vessels â&#x20AC;˘ Well Testers â&#x20AC;˘ Frac Recovery â&#x20AC;˘ Wellbore Bleedoff â&#x20AC;˘ Ball Catchers â&#x20AC;˘ 400 bbl Tanks â&#x20AC;˘ Rig Matting â&#x20AC;˘ Complete Trucking Services

7^aXi^]cP[ Â&#x2019; 3XaTRcX^]P[ Â&#x2019; FT[[ <^]Xc^aX]V

Specializing in well site and pipeline surveys RICK CORMIER Manager g

Box 609 Carlyle, SK S0C 0R0 www.truetorq.com

Bus: (306) 634-8084 Cell: (306) 577-8833 Fax: (306) 453-6075 ttorq@hotmail.com 25-tfn

Yorkton 306.783.4100

Swift Current 306.773.7733

Edmonton 800.465.6233

Weyburn 306.842.6060

Lloydminster 780.875.6130

Calgary 866.234.7599

Regina 800.667.3546

Medicine Hat 403.528.4215

Grande Prairie 780.532.6793

lancew@aspentrailer.com www.aspentrailer.com Aspen Custom Trailers 6017-84th Street S.E. Calgary, AB T2C 4S1

Box 208

Estevan, SK

S4A 2A3

Lance Wotherspoon Regional Sales Manager

461-8471 â&#x20AC;˘ 461-8472 â&#x20AC;˘ 461-8473

[T] 403 236 2244 [F] 403 236 8829 [C] 403 813 6319 [Toll Free] 877 236 2244

Call: Clinton Gibbons &DQDGD V OHDGLQJ GLVWULEXWRU RI LQGXVWULDO Ă HHW DQG VDIHW\ SURGXFWV

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OIL / INDUSTRIAL / AGRICULTURAL / AUTOMOTIVE

352-7668

TOLL FREE 1-877-778-7460 WEEKDAYS 7:30 A.M. - 5:30 P.M. SATURDAYS 9 A.M. - 1 P.M.

STOCKING ENGINE PARTS

1404 SCARTH ST., REGINA, SASK.

WK 6WUHHW (VWHYDQ Â&#x2021;

Bulk Agency 912 6th Street, Estevan

LECLAIR TRANSPORT Lyle Leclair - Cell: 306-421-7060 Larry - Cell: 306-421-7131 General Oilfield Hauling

website. www.continentalengine.ca FAX 525-8222

continentaleng@sasktel.net

Lloyd Lavigne â&#x20AC;˘ Kirk Clarkson Owners/Managers 6506 - 50th Avenue Lloydminster, AB

Phone: (780) 875-6880

5315 - 37th Street Provost, AB T0B 3S0

Phone: (780) 753-6449

Fax: (780) 875-7076

634-7275

24 Hour Service

Toll Free: 1-866-457-3776

Specializing in Industrial & Oilfield Motors

Dwight G. Blomander, CFP, CLU, CH.F.C., RHU

JUSTIN WAPPEL - Division Manager 401 Hwy. #4 S. Biggar, Saskatchewan PO Box 879 S0K 0M0 Ph (306) 948-5262 Fax (306) 948-5263 Cell (306) 441-4402 Toll Free 1-800-746-6646 Email: jwappel@envirotank.com www.envirotank.com

â&#x20AC;˘ Life Insurance â&#x20AC;˘ Disability Insurance â&#x20AC;˘ Critical Illness Insurance â&#x20AC;˘ Employee BeneĂ&#x20AC;t Plans Tel: (306) 359-2015 â&#x20AC;˘ Fax: (306) 359-3034 E-mail: dwight@dgbcanada.ca Toll Free: 1-855-359-2015 â&#x20AC;˘ Cellular: (306) 421-1935

Life Licence sponsored by The

Great-West Life ASSURANCE COMPANY

105, 335 Hoffer Drive, Regina, SK. S4N 6E2

Cordell Janssen District Manager Downhole

93 Panteluk Street, Kensington Avenue N Estevan, Saskatchewan PHONE: 306-634-8828 â&#x20AC;˘ FAX: 306-634-7747 cordell.janssen@nov.com â&#x20AC;˘ www.nov.com

PIPELINE NEWS December 2010

C23

The Responsible Provider of Combustion Products CSA B149 . 3 COMPLIANT

KENILWORTH COMBUSTION - COMMITTED TO YOUR SAFETY ELIMINATE BTEX EMISSIONS FROM DEHY’S BY 99.8% LOW POWER CONSUMPTION PROCESS HEATER MODULES

SOLAR POWER PROCESS HEATER MODULES

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YOUR CHOICE OF BURNER MANAGEMENT SYSTEM

ONLINE www.kenilworth.ca | MAIN OFFICE 1-780-744-3974

Wishing You a Joyous Holiday Season and a New Year of Peace and Happiness From Everyone at Kenilworth

C24

PIPELINE NEWS December 2010

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